Record Gold Buying in Japan, China, and Singapore

Gold bullion buying in Asia has gone to the next level, and we're about to cover many data points of evidence from this week. Backing that statement up, you don't need to take our word for it. Even government central banks and their sovereign wealth funds are increasingly showing off to their citizens, their rampant gold bullion buying as of late.

This vault belongs to the Singapore government and no media outlet has ever been granted access before. That's because it contains part of Singapore's reserves and the authorities wanted the location kept secret. Each tray you see holds up to 20 gold bars, and each bar is worth close to 800,000 US dollars.

And this vault, the size of which we can't disclose is filled with these trays. This is just some of the gold Singapore has accumulated since the nation first bought gold in 1968. Did you catch that? The tiny but wealthy island and Republic of Singapore has been buying official gold since 1968

Now, that year was the last time official gold price rigging fell apart as the London Gold Pool lost control of suppressing gold's then value, only to have it more than 24 fold in US dollar price within a dozen years that followed. Now since the start of this year, 2023 through the last month of July, Singapore has increased its official gold bullion reserve holdings by nearly half of what it had at the end of last year in 2022. In other words, they are aggressively buying gold bullion at these current persistently consolidating gold spot prices thus far in 2023.

Turning and staying still in the East with Japan. The price of gold there again, hit record price highs this week as their major fiat currency, the Japanese Yen, weakens to levels not seen since they were in a late 1980s financial bubble mania phase.

Of course, since the last major gold market mania of 1980, all fiat currencies have devalued over time versus gold bullion to recent record high levels in most places. It's just that Japan, in terms of their local gold price, has broken out and it's beginning to run away. Likely far, far away in its coming future.

Let me take this moment to remind us all that in a gold bullion bull market, the gold price leads and its silver that eventually follows and ultimately outperforms gold in a blazing catch up rally later on. Japan's current silver price still has to nearly triple just to meet its old 1980 high. Again, they are already hitting record gold price highs quarter after quarter. What do you think is going to happen to their silver price in time?

Onwards to China, where the continued offtake of Silver bullion out of Shanghai's Futures Exchange has been well larger than the net Comex silver bullion withdrawals through this year in 2023. Consistent and persistent Chinese resident fears of eventual sharp fiat Yuan devaluations recently caused their local physical gold volume premiums to spike this week to all time high levels since the available data that we have post 2008 Global financial Crisis.

On this chart, the red line shows just how dramatic this latest gold bullion price premium spike became. How about over in Australia? You can see their local gold price breakout began in 2019, but it wasn't until COVID 2020 where the Perth Mints gold bullion sales really began ramping up locally in what is often a self-reinforcing mechanism.

Buy gold. Gold price goes up repeatedly year after year. But remember here too, the same general rule applies in terms of forecasting the future for Australia where gold goes, silver eventually breaks out and follows thereafter. Silver and fiat Australian dollars are now nearing 40 per troy oz as their spot gold price locally threatens to break 3000 per ounce.

Moving out of Asia now. And hammering home points made last week about Western and larger global basis regarding gold allocations over the past near two and a half years, Western ETF Selloffs and gold bullion withdrawals from futures markets like the Comex, have bled gold bullion, mainly off to the rampant eastern buyers that we just covered.

Still, the Fiat US dollar spot price of gold has held up well, consolidating sideways and not far from record price high levels. The divergence between the blue and yellow lines on this chart tell me that this time is indeed different than any other prior in the 21st century. The longer we move sideways, the bigger the eventual next major move will likely become.

Finally, putting this into a global context regarding gold as of Q2 2022. Last year, gold at the time only represented 1% of the 266 trillion global financial asset pie. That estimate includes all publicly traded gold related stocks, the total value of gold related debt securities and gold bullion holdings under money managers.

If we are indeed looking down the double barrels of secular bear markets in both stocks and bonds globally speaking, near no one, not even rapidly buying Eastern Central banks have enough gold allocations yet.

The silver and gold spot prices have moved higher on a week of rigged job gain adjustments. The spot silver price briefly pierced 25 an ounce midweek only to sell off to close trading today at just over 24 an ounce bid. The spot gold price briefly cleared 1950 an ounce on a terrible jobs report today only to have algorithms rush in and save recessions into this US holiday weekend upcoming. The spot gold silver ratio threatened and briefly pierced the 78 support level only to close above 80 for the week. In terms of job market data rigging, today's adjustments, admitting that we've lost massive amounts of full-time jobs, yet gained part-time jobs this summer in 2023.

That's not a surprise. The government and its data massaging agencies consistently and more and more so than ever, manipulate ongoing economic numbers all the time. If they didn't continually lie to us all, it would certainly be harder to collectively dilute ourselves into the debt quagmire coming due ahead.

US consumers, the ones that supposedly drive our consumer economy, are increasingly heading back to having near no savings at all. US credit card debts have now eclipsed a trillion. While those who do not pay their bills in full in time get to enjoy usurious interest rates on average north of 20% per year on what amounts they owe.

U.S. commercial real estate inevitable comeuppance has yet to fully rectify, but you can bet with higher interest rates at the moment and likely months and years coming, record high on occupancy rates and so much debt that's coming due, that true storm is yet to arrive in full. U.S. corporations have escalating walls of debt to refinance as this decade progresses as well.

I suppose they're hoping that we turn Japanese and yield curve control, blow out the Fiat Federal Reserves balance sheets so that they can get interest rates to somehow go lower and extend to pretend and become zombie corporations instead of having a massive default cycle that we likely should have.

And then there are those upcoming student loan payment restarts, and I'm talking about next month. So 45% of student loan borrowers expect to be late or unable to pay their student loans when payments resume on October 1st. Of course, federal student loan payments have been paused since 2020, which has caused the late payments to fall all the way from around 12 to 10% to basically 0% for the last three years.

But of course, with payments slated to resume on October 1st, 45% of people who took on federal student loans expect to be late or unable to pay them, which will mean on October 1st, delinquent student loan payments will go from here all the way to here, an all time high. A spoiler alert that which can't be paid oftentimes won't ever get paid in real value terms.

I hope you listening out there have been front running the inevitable eventual western world's run to bullion and precious metal proxies. We still have a long, arduous, but rewarding road ahead. 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.

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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...