Summary
- Central banks added a net positive 55 metric tonnes of official gold bullion in July 2023, with reports of steady central bank gold bullion buying in August 2023.
- Poland has purchased gold for the fifth consecutive month, accumulating a total of 88 metric tonnes of official gold bullion in 2023.
- China has been buying official gold bullion for ten months in a row, adding 217 metric tonnes since November 2022, raising their underreported official gold holdings to 2,165 metric tonnes.
- Central banks are buying gold at a record pace.
- Western investors own minimal physical gold.
- The World Gold Council (WGC) and the London Bullion Market Association (LBMA) were both founded by the Bank of England in 1987.
- There's a significant price discrepancy in gold price action between eastern and western trading hours.
- Former London gold trader Peter Hambro admitted gold price manipulation since the 1980s.
- The fiat US dollar spot silver and gold price markets traded slightly up and sideways, with spot silver closing just under $23 oz bid and spot gold finishing just under $1920 oz bid for the week.
- The spot gold-silver ratio fell slightly to close at 83, while central banks continue to accumulate gold amid uncertain economic conditions.
2023 Gold Market Trends: Central Bank Buying and the Challenge of Gold Literacy
What you see revealing right in front of your eyes is 42 stacked 400 troy ounce gold bullion bars. Just over a 1/2 metric tonne of gold bullion.
After having added a net positive 55 metric tonnes of Official Gold Bullion last July 2023, reports of more steady central bank gold bullion buying last month August 2023.
Poland bought for the 5th month in a row bringing their net official gold bullion buying to 88 metric tonnes thus far in 2023.
China bought last month as well, the 10th month in a row of official gold bullion buying, buying since November of last year 2022 a running addition 217 metric tonnes to their now underreported official gold holding of 2,165 metric tonnes. Of course it is quite likely judging from physical gold flow data and gold mining records over the last four decades that the Chinese SWF and the army also have vast holdings yet to be declared officially so.
When we look at the world of physical gold in the year 2023, a few things remain glaringly apparent to anyone who bothers to look.
Central banks are buying gold in record size and at an all time historic pace.
Yet in this world that has so leveraged paper asset values over physical gold values to the tune of never before seen historic leverage.
Modern investors especially in the west are gold illiterate by design. Westerners own next to no bullion.
Yet the self titled, supposed global gold industry spokesman body, the World Gold Council founded in 1987, the same year the Bank of England founded the London Bullion Market Association, they are spending loads of marketing capital to give their potential gold illiterate viewers a fractal story of the modern day gold market saga.
Hiring a well paid famous actor to go around the world and gawk at the size and scale of the modern day gold market is unlikely to tell the sordid story of what has happened to modern day gold price discovery under full fiat financialization run amok 1980s onwards.
To dare cover a shred of that ongoing story though, we at least look at a few data points and facts right here, right now.
In 1987, both the WGC and LBMA were founded by the Bank of England, and surely the former World Gold Council was not coincidental in its being founded in the same year.
Since then the world has increasingly seen a massive price discrepancy building in day to day intra day gold price action, where generally the price of gold goes up during eastern trading hours and the price of gold gets consistently smashed during western trading hours.
Recall back to the early 2010s when the commercial gold and silver London price fixing banks got sued for manipulating price discovery on a consistent basis.
Today, the trading hours for the Eastern London AM & PM price fix have surged to over $28,000 per troy ounce. This significant increase is, of course, greatly influenced by the current spot price of gold. Meanwhile, Western derivative trading is struggling to breach the $2,000 per ounce price threshold, which is crucial for establishing long-term support and paving the way for a potential upward movement in gold prices.
It was just over one year ago when former London gold and precious metals market trader Peter Hambro admitted in a public article and editorial that the gold price has been rigged since the 1980s.
We did a video covering the story which you can review below:
But we can go look back and simply quote from his own words what a clown show modern day gold price discovery has become.
Peter Hambro on July 4, 2022 in an article entitled "Don’t forget the golden rule: whoever has the gold makes the rules"
So yes famed actor for hire Idris Elba, that is a mere sliver of a damning body of ongoing data and circumstantial evidence of what the modern gold market has devolved into.
A world where western derivative traders with the implicit OK of the powerful western central banks that oversee them, manipulated and systemically suppressed gold values for decades compounding. In order to hide ongoing rampant price inflation all while often criminal traders in the PM markets were happy to rip off unknowing stakeholders like emerging market miners and all other shareholders in the gold market supply chain for that matter.
I am willing to bet your coming WGC gold documentary will be more like a childlike cartoon. You won't dare to try to choke down some of these ongoing spicy facts, regarding the current day canard of modern day gold price discovery.
US Dollar Spot Silver and Gold Price Market Trends
The fiat US dollar spot silver and gold price markets basically traded slightly up and sideways respectively on this holiday shortened week.
The spot silver price closed just under $23 oz bid while the spot gold price finished just under $1920 oz bid for the week.
The spot gold silver ratio fell slightly on silver's relative strength over gold to close at 83.
While unsecured shareholders have been net selling gold proxies they don't actually own from gold ETFs over the last more than one year on net, the spot gold price has remained steady thanks to aforementioned record bullion buying mostly by major eastern nations and their central banks collectively buying in record size of late.
Meanwhile, the US government has aims to continue spending savings we don't have, but more often create out of thin air producing eye water deficits consistently not seen since World War Two era.
Somehow investors are left to believe these fiat financialized markets are healthy safe havens to come.
Don't look up now, while we are turning Japanese, apparently Japan is going to front-run us again preparing economic stimulus packages for next month October 2023.
Of course we're going to blow their lead away once our inevitable return to infinite QE policies returns.
Meanwhile, I hope you too are doing like central banks are doing, and acquiring your bullion positions while they still remain systematically suppressed and still relatively cheap.
That will be all for this week's SD Bullion Market Update.
As always to you out there. Take great care of yourselves and those you love.
