Saturday, November 20, 2010
This chart is sourced from Casey Research, Ed Steer's Gold and Silver Daily. The Russian Central Bank purchased another 600k ozs of gold in October (some is purchased on the open market, some is purchased from internal mining production). I think the message of this chart, combined with China's demure announcement about accumulating a lot more gold, is pretty clear: get ready for some kind of gold-based currency standard at some point down the road.
(click on chart to enlarge)
Year-to-date Russia has accumulated 4.6 million ounces. That's roughly 131 tonnes. That's a lot of gold, especially considering that the ECB sold barely any of the 400 tonnes permitted under the Washington Agreement. Now we know why the IMF decided to unload 404 tonnes. Think about where the price of gold might be if the IMF had not supplied the world this year.
I mentioned earlier in this week in the comment section that it was my belief that, other than France, the EU Central Banks are largely out of gold - either via leasing or outright sales. Anyone who has studied this topic thoroughly, of course, knows that it is likely that most if not all of the U.S. gold is either sold or leased. Given the aggressive and large-scale accumulation underway by China, Russia, Iran, et al, 2011 should prove to be a very interesting year for anyone who has already positioned themselves ahead of what will inevitably be a substantial move higher in the price of gold, especially as valued in U.S. dollars.
Posted by Dave in Denver at 8:56 AM