Minimum Order Value Has Been Temporarily Set To $500. Get the Latest Update Here.

Loading...

Central Banks Gold Bullion Buying Levels Highest Since Before World War II

Last week, China posed as a peacemaker by proposing a 12-point plan to halt the ongoing conflict between Russia and Ukraine (which started one year ago).

Meanwhile, China's Foreign Ministry Spokesperson ratcheted up Anti-United States rhetoric in his press conference on Thursday, February 23rd, 2023.

With government central banks now buying more gold bullion in volumes not seen since before World War 2.

We are again left to wonder what are government central banks planning for the next financial system as this current fiat US dollar-dominated version wanes in utility and popularity. 

The global central bank of central banks, the Bank for International Settlements, published the following money flower diagram in October 2018 in Bloomberg, outlining developing plans to change the financial order of things to come.

The BIS had their Chief go on Bloomberg this week to discuss their ongoing plans. 

The silver and gold markets continued selling off this week as the spot silver price closed just under $21 oz, and the spot gold price finished just above $1,800 oz.

The spot gold-silver ratio climbed higher to close at 87.

Checking on where the respective 200-day moving averages are currently for the spot gold price, it is $1,776.27 oz, and the spot silver price's 200-day moving average has been breached below $20.97 oz.

Inflation continues to get hotter than expected, as this week's core PCE data came in higher than expected.

The financial market thus ratcheted up bets for higher interest rate hikes to come.

The US real estate market continues being clobbered with too high-interest rates and home prices, crushing homebuyer demand to levels lower now seen since before the 2008 financial crisis fallout in home buying.

Regarding how much house gold or silver bullion can buy, we are still well elevated above the respective 2011 and 1980 lows.

As I mentioned last week, the declines in spot gold and silver prices over the past month and more has mainly been relatively fiat US dollar strength driven.

Since the start of this month, you can see the inverse relationship between the spot gold price and relative fiat US dollar strength.

You can also see a similar inverse pattern in the spot silver price vs. fiat US dollar index has also formed since the start of this month.

The CFTC still has not published its weekly Commitment of Traders Report leading many market traders and onlookers to openly speculate about what is happening below in derivative trading mechanics (e.g., 1, 2, 3).

Of course, both eligible (yellow pile on the chart) and registered ounces (the red section on the chart) of combo counted London and COMEX gold ounces underlying have been rapidly diminishing over the past year.

A similar but even more dramatic story for COMEX silver futures market open interest at the moment where we would have to go back to the onset of the 2012 silver cyclical bear market to find as little open interest in silver.

No hot speculative leveraged money is yet chasing into silver or gold derivative markets.

As for the physical United States bullion market, price premiums have consistently shrunk closer to ongoing spot prices. For those looking to add to bullion positions doing so when spot prices get near their 200-day moving averages is typically well-timed.

Take advantage of this calm before the inevitable next wave of financial crisis comes about.

That is all for this week's SD Bullion Market Update.

As always, take great care of yourselves and those you love.

← Previous Next →
James Anderson
James Anderson
Senior Market Analyst & Content

A bullion buyer years before the 2008 Global Financial Crisis, James Anderson is a grounded precious metals researcher, content creator, and physical investment grade bullion professional. He has authored several Gold & Silver Guides and has been featured on the History Channel, Zero Hedge, Gold-Eagle, Silver Seek, Value Walk and many more. You can pick up Jame's most recent, comprehensive 200+ Page book here at SD Bullion.

Given that repressed commodity values are now near 100-year low level valuations versus large US stocks, James remains convinced investors and savers should buy and maintain a prudent physical bullion position now, before more unfunded promises debase away in the coming decades...

Top