re: Physical Gold

Had two interesting conversations this week with buyer reps from a couple of the major online dealers …. both indicated they are experiencing difficulties in obtaining adequate inventories in Physical gold due to acquisitions by central banks and large international buyers (governments).

Still plenty of Silver available despite the large gap between physical supply and increased industrial demand.

China alone bought 29 tonnes of physical gold bullion, just in August (158 tonnes YTD)

To put this in perspective, the total annual global mined gold production is a little north of 3,000 tonnes….. so China acquired about 12% of the world’s annual mined supply … in a single month. They know something that the rest of us can only speculate about

Personally, I think the war drums are beating ….. they know if they seize Taiwan they will be subject to HEAVY western financial sanctions …. which won’t be nearly as painful if their gold reserves are plentiful. So IMO, China’s increased purchases are in the early stages, as they will need to rapidly build reserves to support their currency, … and to effectively lead their BRIC initiatives. That likely means rising spot prices and premiums for PHYSICAL gold on the near horizon (6-12 months)

Acquisitions by the world’s central banks have also resumed their torrid pace (see WGC tracker below). The current Lease Rates for gold bullion have now reached their highest rate since the Lehman Brothers meltdown in ‘08 ….

Just a courtesy “heads up” …. for those that have an interest in physical gold, you may want to acquire while you can because serious physical shortages are coming to a dealer near you. Still plenty of silver and platinum according to the dealer contacts I spoke with.

Just my dos centavos …..Good fortunes to all