China’s gold imports remain massive

The gold price has been in a tailspin this year, but physical demand for the yellow metal remains as robust as ever in China.

New data shows that net Chinese gold imports jumped 40% in May from the month before. Total imports from Hong Kong reached their second highest level ever during the month, behind only March of this year.

To put the numbers in perspective, analysts at Stifel Nicolaus noted that China has already imported about 20 million ounces of gold in 2013, compared to 26.7 million in all of 2012 and 13.8 million in all of 2011. If these import numbers hold up through the year, they would be equivalent to 50% of global mine production, or 35% of total world supply.

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Those are huge figures, and they show that China is taking advantage of the drop in price to load up on bullion. To date, however, that buying has not been enough to stem the price decline.

“Investor selling in developed markets has continued to overwhelm the still robust physical demand in Asia and emerging markets. This will take time to play out,” the Stifel analysts wrote.

They remain bullish on gold, noting the recent unrest in emerging markets and the Middle East, sustained low interest rates, sovereign debt issues, and the fact that the U.S. monetary base is up another 18% so far this year.

Source: http://business.financialpost.com/2013/07/05/chinas-gold-imports-remain-massive/

Financial Meltdown, Back-To-Back “Stick Saves” & Gold

On the heels of more turbulence in key global markets, today 40-year veteran, Robert Fitzwilson, put together another extraordinary piece. Fitzwilson, who is founder of The Portola Group, discussed financial meltdown, back-to-back “stick saves,” and what this all means for battered traders and investors in the gold market. Below is Fitzwilson’s outstanding and exclusive piece for KWN.

Fitzwilson: “There is a term in ice hockey called a stick save. Instead of using the curved end of the hockey stick, the player uses the handle end to move the puck. It has been described as having no points for style, and often fails, but sometimes saves the day for the player and his or her team.

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Below is a chart of the Dow Jones Industrial Average from 1970 to the present. You can clearly see two stick saves early last decade and the second during the 2008 meltdown.

The first stick save was engineered largely by the policy of driving rates to zero. While it saved the stock market and thrust the real estate markets to new heights, it sowed the seeds for the horrendous crash in 2008….

“A larger stick save was required in the 2008 debacle, requiring the completion of the zero interest rate objective as well as the creation of massive amounts of money on a global and historic scale.

It is no wonder that many people are terrified of equities when one looks at this chart. The volatility has been incredible. You can barely see the Crash of 1987 on the chart, although that was a stomach churning decline on the order of 23%.

The chart below is for gold during the same period.

While the Dow Jones has increased by roughly 14 times since 1980, the price of gold has merely doubled from the peak. Despite that disparity, most people look favorably at the chart for stocks, and are adamant that gold is overvalued.

For stocks, valuation metrics are used such as price-to-earnings ratios. For gold, there is no attempt to relate the price to the forces that drives the metal’s price. What drives gold is the excessive, massive creation of fiat currency. Since 1980, the amount of debt-based money has exploded. If that simple valuation metric of comparing the price of gold to the amount of money is applied, gold is drastically undervalued.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/3_Financial_Meltdown,_Back-To-Back_Stick_Saves_%26_Gold.html

Stunning 500 Tons Of Gold Now Being Moved Each Month

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….

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“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?

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/7/2_Stunning_500_Tons_Of_Gold_Now_Being_Moved_Each_Month.html