Wednesday, February 13, 2013

U.S. Gold Is Being Exported To Asia, Especially Hong Kong

The US reportedly exported $4 billion in NON-MONETARY gold in December and $36 billion for the year.  That is 22 million ounces of exports or so for the year. The US produces 8 million ounces a year .

Where did the 14 million ounce difference come from?

Is the Federal Reserve giving all of our Gold away?

U.S. Gold Bars and Coins Find New Home Overseas on Asian Demand
By Frank Tang
Monday, February 11, 2013
NEW YORK -- Booming demand for gold as a store of wealth among Asian investors is driving physical gold bars and coins out of the United States and into Asia.

A growing number of gold vaults for affluent Asians and new precious metals investment products, particularly exchange-traded funds, have led to an exodus of gold owned privately from the United States into emerging economic powers such as China.

On Friday, Commerce Department data showed U.S. exports of nonmonetary gold, which excludes central bank transactions, soared by 43 percent to $4 billion in December from the previous month.

That's the highest total and the biggest month-on-month jump in U.S. private gold exports since September 2011, when gold rallied to a record high over $1,920 an ounce. Prices are currently about 14 percent below the peak at $1,643 per ounce.
Hong Kong accounted for around $2 billion, or half of the nonmonetary gold exports for the month.

Uncertainty about the U.S. fiscal situation and euro-zone debt crisis have prompted many ultra-rich gold investors to move their bullion holdings to Hong Kong and Singapore from traditional gold hubs in Switzerland, London, and New York.
"As the Asian market becomes more affluent, we are seeing more private investors looking to move their metals offshore," said Miguel Perez-Santalla, vice president of online precious-metals exchange BullionVault. "People want to have their money next to them."

A shortage of storage space has been a growing issue in Asia as vaulting companies have not kept up with the pace of inflow of physical bullion, he said.
U.S. gold exports to Hong Kong have been steadily increasing in the past several years as wealthy Asian individuals looked to diversify their portfolios into gold, said Michael George, a commodity specialist at the U.S. Geological Survey.
In November, ETF Securities launched three ETFs that are backed by physical precious metal in Hong Kong.

Some money managers cited the recent U.S. fiscal crisis for the physical gold outflow.

"The uncertainty over the debt ceiling and fiscal cliff have greatly diminished confidence in the U.S. banking system," said Jeffrey Sica, chief investment officer of SICA Wealth, which manages over $1 billion in client assets.
George said some of the gold import to Hong Kong could be transferred to China and nearby countries such as Taiwan, which has also seen an increase in U.S. gold imports in recent years.

Last Tuesday data showed Hong Kong's net gold flow to mainland China jumped 47 percent in 2012 to a record high of 557.478 tonnes, a sign of strong Chinese demand.

China, the world's second largest economy, has been vying with India to be the world's top gold consumer.

Gold demand from China is likely to grow around 10 percent in 2013, an official from the trade group World Gold Council said in a recent interview.
Hong Kong's proximity to the prosperous southern China and free capital-flow environment have benefited the former British colony as China's trading window to the world.


Sprott sees scrap gold disappearing, expects Comex default


4p ET Monday, February 11, 2013
Dear Friend of GATA and Gold:
Sprott Asset Management CEO Eric Sprott today tells King World News that scrap gold supply is disappearing, that he expects the Comex gold futures market to default, and that when it does, gold "will make up for these past two years in no time." An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer

Russia, China and Turkey bought the most gold in 2012

Posted on 12 February 2013

The World Gold Council has released its latest list of the world’s biggest gold buyers. So who bought the most gold in the past year?

Russia, China and Turkey in that order, and India is out of the top three. Still that looks like the emerging markets hedging against a decline in the US dollar…
Video Link


Putin's Russia Now World's Largest Gold Bullion Buyer -- Why?

Author, 'Oil and Finance: The Epic Corruption Continues'
GET UPDATES FROM Raymond J. Learsy

Posted: 02/12/2013 7:48 am

On February 10 Bloomberg reported that "Putin Turns Black Gold Into Bullion as Russia Out-Buys World," advising that the world's largest oil producer's central bank has added some 570 metric tons of gold over the last several years for a total inventory of 958 tons. This while the likes of Switzerland, France and the Netherlands were selling significant quantities of their gold holdings.

According to the article, there has been a long tradition of gold-buying/hoarding in Russian history going back to the time of Tsar Alexander II who ordered the government to start amassing gold bullion in 1867. Interestingly, the timing was almost concurrent to Russia's sale of Alaska to the United States for $7.3 million.
Yet purchases of gold under Putin have intensified to the point that Russia, as a matter of national policy and strategy, has surpassed all others in its tempo of gold accumulation. All of which then raises the question of why?

When Putin tells the central bank "to buy," does he know something that the rest of us do not or can only guess? Certainly there is Putin's predilection, which he has made generally known, that he views the U.S. as endangering the global economy by abusing the dollar. Or as Putin's political ally Evgeny Federov is quoted in the article, "The more gold a country has, the more sovereignty it will have if there is a cataclysm with the dollar, the pound or any other reserve currency."

All that certainly sounds reasonable enough given the propensity of central banks throughout the world to print their way out of the current financially orchestrated economic morass.

But is there something else in play? Some two years ago, the U.S. Commodities Futures Trading Commission fined the commodities trading house Conagra $12 million because one of its traders at the time, with but a single trade, purposely pushed the price of oil to $100/bbl for no other reason than being the first to make this historic vanity trade.
Aug 16, 2010 - U.S. Commodity Futures Trading Commission ... announced the filing and simultaneous settlement of charges against ConAgra Trade Group, ...
The trader achieved this milestone by buying a single 1,000 barrel contract on the commodities exchange, requiring a deposit of but $6,500, thereby advancing the quoted price for oil by some 25 cents/bbl to reach the first fabled $100/bbl print.
Consider that if the price of oil can be moved by a single trader, needing only some $6,500 as margin, what can be achieved on our pliable Commodity Exchanges with a trading war chest holding hundreds of millions if not billions?
In this space early last year, I wrote "Oil Embargoes, Sherlock Holmes and the Russian Butler" (02.20.2012), which touched on the importance of oil and, manifestly, its price, to Russia's economy being so deeply dependent on the revenues derived from the sale of its oil and gas. It posited the following:
We have a Russia that is governed by a coven comparable to our Wall Street "ole boys network," namely the alumni of Russia's highly touted secret service, the KGB. The KGB helped form Putin and many of his associates in government. Here was an organization that was the nonpareil master of clandestine intrigue, knowing how to keep secrets. Now in a sense, it is running the country albeit with the trappings of democratic governance.
Given the stakes at hand, would it be a real surprise that with its wealth and given the economic and strategic importance of oil revenues to Russia's well being, and with the talent at hand, that Russia is doing whatever it can to keep the price of oil high and ever higher still?
Very probably, it is not the concern of the collapse of the dollar and other reserve currencies that is motivating Putin to gobble gold, but the core knowledge that the current price of oil is a manipulated mirage aided by his minions and some day, whether sooner or later, will collapse upon itself. That the trading at the Commodity Exchanges' oil derivatives casinos, where the price of crude oil is currently pegged, is a rigged game. (please also see "The Oil Market Plays Casino While the Obama Administration Acts as Croupier" 09.10,11). Now while the going is good, and the price of oil is high, is the moment to pile in the gold because the mirage will eventually implode because it has no foundation in an unencumbered and freely traded marketplace.



Gold Chart and Comments / By Dan Norcini / Wednesday, February 13, 2013
Gold continues to work lower as it moves ever closer to a region that has heretofore provided substantial buying support. Bears are attempting to take it down through this support region in the hope of picking off the rather large contingent of sell stops sitting just under the market.
It should be noted that they have strategically used the Chinese Lunar New Year holiday week to press their case. Without that strong physical offtake, speculators on the Comex have lost an important ally. It will be interesting to see what happens next week when that period in China is finished.
By then however, it may be too late for the bulls. This market looks heavy to me. Note that on the technical chart, one of the indicators that I still use ( it is dated but still a very good tool) shows that the ADX of the Directional Movement Indicator is beginning to turn up from a very low level. A rising ADX (the dark line) is a sign that a market is in a TRENDING PHASE. So far, gold has been in a sideways consolidation pattern or range trade. That is evident from both the price action which has been confined between $1695-$1700 on the top and $1640 or so on the bottom. Along with that, the ADX has been falling which is indicative of a market in such a pattern.
Givin It All Away -BTO

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