When the IMF announced it's intention to sell the 200 t. of gold there were talks about China being interested to buy the gold at that time i poste my belief that such an event would be bullish for gold if they were to grab the price in a single move but a few days later Chinese authorities stated they did not intend to by it as they would rather buyt from Chinese producers , was that a tactic to get a deal or was that true we won't know until tne next major sale from IMF or another central bank happens, if so .
IMF is supposed to sell more eventualy to finance investments in poorer countries , if taht happens we'll see then where China stands it should prove interesting both for gold and the US dollar one of them might stand to lose following the decision if that were to happen . If China were to convert some more US $ in gold some might see it as a signal of further disingagement from the US currency .
The fact that 200 t. were snatch by a single buyer is confirmation to me of the bullish aspect of gold and bearish for the US $ . It's said that India converted US $ into gold probably figuring it was a better investment going forward .
In any case most Central Banks appear to be on the buying except maybe the US for wich no numbers seem to be available ...
Russia announced a few weeks ago it would sell 50 t. of gold to help manage it's deficit but backed off only a couple of days later stating the leak about the sale had them change their mind , was that the real reason who knows but it sounds fishy .
Hong Kong about a month ago rapatriated it's bullion from London into a new built volt they just built and at the same time they've put in place an Asian gold market of their own .
In a normal situation 200 t. of gold appearing suddenly on the market should put downward pressure on the gold market and it may have had some effect on the price looking back at the time of the announcement but looking at the actual price any downward effet was largely upset by other factors so that seems very bullish to me in just a few weeks .
Back in september the ECB announced it was reducing it's target for gold sale over the next few years for EU members from 500 t. a year to 400 t. with specific quotas for each member but so far excluding the IMF there's no words from sellers .
The big impact for gold price will come eventualy when the ECB and the Fed start the demoneytisation process , will they coordinate their strategy as they said they would over the last months ? Will they bgo their seperate ways ? Will the process work ? How will the different economies sustain the impact of it ? Will the FED be able to go at it without political intervention ? US employment is the key without jobs it should be hard to restrict acces to liquiditie and at the same time rise interest rates , it could kill any recovery in the making and if that happens in the US then the worst could come to the worst . Would gold keep on climbing in such circumstances ? Maybe !? But would gold stock gain in such an environment ? I'm not so sure .
In such conditions the stock market could be a much more dangerous environment then it appeared to be this year . I mean the markets kept climbing steadily notwithstanding fears it would correct most of the year while the economy was stimulated giving some reasons for confidence but if fears about a second economic crisis were to happen panic could very well sweep the markets once again sending everything down and even gold at least for a while .
Just reflecting out loud once again you're welcome to bring your output in this reflexion you motivated .
Regards !
Tec
