The Savage Gold War Behind The Scenes

With global stocks, the US dollar, and gold all surging, today one of the savviest and well connected hedge fund managers in the world sent King World News the most amazing chart concerning what is happening in the gold market.  Outspoken Hong Kong hedge fund manager William Kaye also spoke with KWN about what is really going on behind the scenes in the gold war.  Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, had this to say in part II of his remarkable interview.

Kaye:  “As you and I are talking now, we’re a little bit below $1,250 on gold which is ridiculously low.  On the numbers we are looking at that would mean that roughly half of the production of the mining community of the world is unprofitable, which is stunning when you think about it.

What is going on is unprecedented….

“It’s unsustainable, and like anything that is unsustainable it won’t be sustained.  So this is a great opportunity for people who do have an interest in possibly adding to or initiating new positions in gold or precious metals.  We are at levels that I think are extremely attractive, Eric.”

Eric King:  “Bill, what about this chart that you sent me going over the various entities out there that hold gold for retail and institutional investors?  Can you talk about that?”

Kaye:  “Yes, I’m happy to.  Pick up the Wall Street Journal, the Financial Times, watch CNBC if you want to have your brain damaged, you’ll get the same narrative (regarding gold).

And it’s a scary narrative, which is that people are panicked — there is a bear market in gold.  And they (the mainstream media) never make a distinction between the paper market in gold and the physical bullion market.  That is a very important distinction for your listeners (and readers) to make.

But the narrative is that people are panicked, and because they are panicked they are selling into the market to whoever will buy.  And this is why the gold inventories, the Spyder Gold Trust and the other major exchange traded funds (gold holdings) have been so rapidly reduced.


The Complete Story Of How Gold Is Mined And Refined

south africa gold mine

Gold prices have tumbled since their $1,900 peak in 2011. The yellow metal slumped into a bear market in April, and now prices are just above $1,200.

Investors have warned that the correction in gold prices has meant that miners are producing gold at cost or are losing money.

Last year, CNBC‘s Bob Pisani traveled to South Africa to show us how gold goes from particles to gold bars.

He followed AngloGold Ashanti’s gold mining process from start to finish. Workers there pull up 5000 metric tons of earth per day, which yields as much as 1,700 ounces in gold.

Pisani also visited the Rand Refinery, which has refined nearly a third of the gold mined since 1920.

In light of the recent sell-off in gold, we decided to revisit Pisani’s tour of the gold mine and see just how complicated and dangerous the process is.\


There Is A Tremendous Shortage Of Physical Gold Out There

Today a legend in the business told King World News that right now there is a tremendous shortage of physical gold. Keith Barron, who consults with major companies around the world and is responsible for one of the largest gold discoveries in the last quarter century, also spoke about what is really taking place behind the scenes during this gold raid. Below is what Barron had to say in this powerful interview.

Barron: “The gold price got hammered, down over $30 today. Quite often the powers that be decide they are going to take it down on Friday. The excuse this time is that Non-Farm Payrolls are up, so the job situation is looking better in the US.

We seem to be rotating from one bearish gold news story in the mainstream media to another, with comments from the Fed and people asking, is there going to be continued QE? There is all of this noise on almost a half hourly basis which is moving the gold market. But demand for physical gold is still incredibly strong and when gold plunges $32 in one day, a lot of people do view this as a buying opportunity. I certainly do.

When gold was taken down roughly $200 on a Friday and Monday, and we saw massive movements of gold out of GLD, the interpretation by CNBC and the usual suspects was that everyone was getting out of gold….

“People even went so far as to say the bubble had burst.

There were redemptions going on in GLD as early as the second week of January. The reason is very interesting. What was really taking place was the bullion banks were taking gold out of GLD to meet the massive demand out of Asia. This was happening as the premiums in Asia for gold were sky high, up to $50 an ounce.

So bullion banks were raiding the GLD ETF for gold and pocketing up to $50 on the spread, just for shipping it to Asia. Eric Sprott has talked about this in his report. That’s a hell of a good business for these bullion banks. But that is why a tremendous amount of tonnage was moving out of GLD. It was because of massive demand for physical gold, not people selling it.