Precious Metals “Porn”

by Dave Kranzler, Investment Research Dynamics

A nice way to start of Memorial Day Weekend is with some interesting thoughts about the precious metals.  The Shadow of Truth recorded a podcast with Craig “Turd Ferguson” Hemke yesterday  which will be released this weekend.

Craig and I both agree that the bottom is in for gold and silver and that the physical market demand from the east is just too strong for the BIS/Fed/Bullion Bank cartel to push the metals any lower than where they are now using fraudulent paper gold derivatives – at least for any meaningful duration other than intra-day paper dumps.  We also agree that Harry Dent is nothing but a snake-oil newsletter pimp.

The Scramble To Hold Physical Bullion Is On

Zerohedge has done a nice job finding an article from an Austrian paper which has reported that the Austrian Central Bank has repatriated 110 tonnes of gold from the Bank of England:  LINK

  • CENTRAL BANK TO BRING MOST GOLD RESERVES BACK TO AUSTRIA: KRONE
  • KRONEN-ZEITUNG REPORTS ON AUSTRIAN CENTRAL BANK’S GOLD PLANS
  • AUSTRIA TO TRANSPORT 110 TONNES GOLD BACK TO AUSTRIA: KRONE

Austrian central bank plans to keep 50% of its gold reserves in Austria vs 17% now, Kronen-Zeitung reports, citing governor Ewald Nowotny’s unpublished new “gold strategy.” Bloomberg adds,

  • 30% of gold reserves to be kept in U.K., down from 80% now
  • 20% to be kept in Switzerland vs ~3% now
  • Intention is “risk diversification:” Krone

I wanted to share some graphs with you that I think you’ll find interesting (click on them to enlarge). 15 year monthly silver 1This chart on the left shows 13-yr silver on a weekly basis.  You’ll note that on a weekly basis, silver has poked its ahead above the downtrend line going back to late 2011.   Many of us have been wondering why it’s so hard to get any data on China’s silver production and imports.   There’s a reason for that and I believer China has sucked most of the global supply dry.

This graph is pretty much self-explanatory.  It’s a 15-yr graph of the price of gold.  As you can see, it would appear as if gold has completed a multi-year bull market pullback and is consolidating for the start of the 2nd leg of the precious metals bull market. 15yrGold In general, the 2nd leg of a bull market tends to produce the best gains, especially on a risk-return basis.   It’s when the market goes parabolic because everyone including janitors and cab driver are jumping in to a market – like the current stock market – that a bull market becomes too risky for fundamentals-based investors. But we still have Stage 2 of the gold bull before we start assessing a “final blow-off” stage.

Finally, to circle back to the idea that there’s a scramble for physical bullion, here’s the latest graph which shows the accumulation of gold by the Russian Central Bank, which added another 300,000 ozs in April (source: Goldchartsrus.com):

Russian_Reserves

As you can see, Russian gold reserves have gone up more than 300% since 2006.  There’s a reason for this and I assume we’ll find out that reason a lot sooner than the corrupted, neo-con infested U.S. Government would like us to find out…

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