On the heels of continued volatility in the gold and silver markets, today James Turk told King World News that he is seeing shocking movements of 500 tons of physical gold each month. Turk spoke about this remarkable situation as well as other key developments taking place in the ongoing war in the gold market.
Turk: “We have recently seen one of the greatest interventions in the history of the gold market by Western central banks. Gold is one of the world’s least transparent markets, and misleading central bank accounting keeps it that way. But sometimes, by looking at different pieces of the puzzle, a picture starts emerging. So I have put together some of the pieces together….
“For example, there have been bottlenecks in moving metal, which is clearly flowing from West to East. Supply from mining in the West, excluding Russia and China which do not export their production, is about 160 tons per month. In addition, there may be another 50-to-80 tons per month of gold already in the aboveground stock which moves around as a result of normal flows among countries and changing demand for different gold products.
But I estimate that recently over 500 tons per month have been moving around. This has had the effect of creating some transportation bottlenecks. The transport providers have not been able to cope with this remarkable development. Similarly, the refiners have not been able to cope with the historic level of demand by fabricating the metal needed to meet the frantic buying, even though they are operating 24/7. So we have to ask ourselves, where is all this metal coming from?
We are talking here about physical metal, Eric, and not just selling paper-gold with futures and other derivatives. The reality is that there has simply been too much metal moving from West to East — far beyond what has been dishoarded from ETFs and other visible sources like the Comex vaults. Much of this physical metal had to come from central bank vaults. That point is clear. But an important question still remains unanswered.
Even though Western central banks killed the gold price during the last couple of months with their dishoarding, we do not yet know precisely why they killed the gold price. What did the central planners want to accomplish by dishoarding so much metal in such a short period of time?