Relative Scarcity of Physical Gold Prompts Large Drawdowns From Funds and ETFs

It is interesting to watch the ongoing management of physical gold holdings in the West.

Physical gold has been seeing large drawdowns from inventory during this price decline, but silver does not.

This is not due to some preference or matter of taste.   Physical gold is in short supply, whereas silver is not.

Both are subject to speculative price manipulation in the paper markets.

The relentless demand from Asia is stressing the highly leveraged claims per physical ounce of gold in London and New York.

The system will be maintained— until it cannot.   No commodity pricing pool can last forever in the face of stubbornly stable supply.

Physical gold is flowing from West to East, into the markets and strong hands of Asia. 

Bye bye gold.

The eventual resolution may be quite energetic in terms of price.