We recently reported
how the people of India has swallowed a massive 1,473 tons of silver in
the month of May 2017. Not only was this one of the largest months for
Indian silver imports it was more ounces of silver than the U.S. Mint
had sold Silver Eagles in the whole of 2015. 2015 set the new all time
high for American Silver Eagle sales and it took the U.S. Mint all year
to do what India did in one month! Impressive to say the least.
Now we learn that India also imported a massive volume of gold during
the month of May 2017, more than double any other month in the last 12
months.
Take a look at this chart. The volume of gold moved through India in
May represents close, X China, to 10% of global gold mining production.
India offloaded 220 tons of gold and the price of gold moved less
$12/ounce. Also, this has had zero short/long term impact on the price
of gold because as of July 10, 2017 gold is trading for less than
$1,212/ounce. A significant move to the downside.
So, how is the price of gold determined if India can import close to
10% of global annual gold production and within 45 days gold has moved
to the downside by more than $40/ounce?
Recently, there was a well respected voice in the gold community
stating a sovereign entity would be offloading some 250 tons of gold in
one order and this would cause gold to rise exponentially. Well, not
according to the information laid out above. If India can claim 220 tons
of gold during the month of May and within 45 days gold has moved
down
by approximately 3.5%, should we expect the same with this future
unknown sovereign acquiring 250 tons of gold? Which, by the way
represents, more than 10% of global gold production. If this does in
fact come to fruition that would mean more than 20% of global gold
production would be removed in two months. Assuming all the other
channels for gold acquisition did not shut down and continued acquiring
gold as they have in all the other months this would mean there would
need to be some real physical gold coming to market. I presume, the
market can handle it, as the physical gold market has shown little to no
signs of strain due to India’s acquisition. The Shanghai Gold Exchange
premiums have not risen dramatically, we haven’t heard about any other
gold market experiencing a massive increase in premium to the LBMA
rigged price of gold.
The real question is will India follow through in June and July?
If the pattern above plays out, and I hope this sovereign does in
fact acquire 250 tons of gold, that would mean gold would be down close
to $1,175/ounce by the end of August, which would make for a great
opportunity for all us little guys to stack, stack, stack!!
And this brings me back to the same question I have been asking since at least 2013 – where is the gold coming from?
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Rory Hall, Editor-in-Chief of The Daily Coin, has written over 700 articles and produced more than 200 videos about the precious metals market, economic and monetary policies as well as geopolitical events since 1987. His articles have been published by Zerohedge, SHTFPlan, Sprott Money, GoldSilver and Silver Doctors, SGTReport, just to name a few. Rory has contributed daily to SGTReport since 2012. He has interviewed experts such as Dr. Paul Craig Roberts, Dr. Marc Faber, Eric Sprott, Gerald Celente and Peter Schiff, to name but a few. Visit The Daily Coin website and The Daily Coin YouTube channels to enjoy original and some of the best economic, precious metals, geopolitical and preparedness news from around the world.
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