Gold buying by central banks hits its highest level in almost three years

CNBC ^ | 11-01-2018 | David Reid

[NRx]

Central banks around the world have upped their spending on gold to the highest level in almost three years, according to the World Gold Council (WGC).

More than 148 metric tons of gold were bought by the national banks in the three months to the end of September, a rise of 22 percent on the same period last year.

Using the current spot price of $1,223 per troy ounce, the gold purchases by the banks added up to a $5.82 billion spending splurge on the precious metal.

Russia’s central bank led the buying, purchasing more than 92 tons of gold. This marked the country’s biggest quarterly net purchase on records that stretch back to 1993.

In May this year, the Russian central bank’s First Deputy Governor Dmitry Tulin told lawmakers in the lower house of parliament that gold was “a 100 percent guarantee from legal and political risks.”

[ProtectOurFreedom]

Central banks buying $0.025 trillion of gold per year in a global economy of $84 trillion per year. Doesn’t seem like much to get worked up over.

[NRx]

You are looking at the wrong numbers. It’s not what percentage of the global economy it comprises but what percentage of the global supply of gold. Central banks have been in a slow but steady program of accumulation since the last financial crisis. And China has almost certainly been under-reporting their own reserves.

[al baby]

Is that 92 troy tons

[NRx]

The article does not say but I suspect that the answer is yes. Precious metals typically are weighed using the troy system.

[DesertRhino]

Now why would that do that? /s

[Ceebass]

The buying was offset by heavy selling of gold-backed funds during the same period.////

It would have been more informative if the article specified whether the central banks were buying new mine output or just what the ETF’s were selling off.

[advance_copy]

If I had gold now I’d sell it. Six months from now it won’t be worth 2/3 its price today. The markets are rough these past weeks because there’s leftist money trying to drive them down in a failed effort to manipulate the election. That stops Tuesday next week and you can count on gold to do what it did in the mid 80’s after Reagan’s first two years.

[neverevergiveup]

Personally, I think you’re absolutely correct.

[NRx]

If you think gold is going to be trading in the $800 ozt range when the entire world is drowning in debt, all I can say is I will buy whatever you have at that price. Which I might add is well below production costs in most of the world. We have over $100 Trillion in debt and unfunded future liabilities. There is not enough fiat money in the world to cover that. Abolishing the entire government except the IRS would not cover that. A 100% income tax cannot cover that. There are only two ways this can be handled. Overt default (i.e. Thank you for lending us your money or believing our promises to provide you with your golden pension and social security, but we are stiffing you. Have a nice day.) or massive money printing. Given the spineless nature of politicians, my money (literally) is on the latter.

[JudgemAll]

Makes sense. I was hoping it was conservatives boycotting Netflix trash but probably not

[JudgemAll]

Not sure if they will print that much.

The deep state does not want a deflated salary but would sell out the country to China to be paid in Yuan just as the French government is paid in DeutschMark/Euros in excchange to surrendering french industry to be replaced by German industry

[bkopto]

We have over $100 Trillion in debt and unfunded future liabilities. There is not enough fiat money in the world to cover that.

People cannot fathom these astronomical numbers. People think that this game will go on forever, like the sun always rising. It cannot.

When the music finally stops, there is going to be a huuuge transfer of wealth from one group to another.

The eternal question is WHEN will the music stop. No one knows.

[Mogger]

And China has almost certainly been under-reporting their own reserves.

You are right.

Much of China's gold is in the hands of their wealthier citizens in the form of jewelry.

One of my friends was invited to a wedding there.

It went on for 5 days.

As guests arrived they gave gold necklaces and bracelets. The weights of each and the giver were recorded. My friend saw nothing under $5000 USD.

The bride was photographed several times, wearing jewelry as it came in, because it would be too heavy to wear at one time.

[greeneyes]

Yep I’m with you. Always good to have a little gold and silver for a hedge against bad times.

Obama’s Fed printed dollars like there was no tomorrow. It didn’t work, because the economy had structural problems such as too many regulations and too high taxes. As the economy recovers, inflation will be lurking. Hard Assets is a good hedge.

The other thing they can do is devalue the dollar (import inflation). Still a good hedge.

[SunkenCiv]

The ten year high was $1889.70 (low 712.30), the five year high was $1379.00 (low 1050.80), and the two year high $1362.40 (low 1176.20). It’s not surprising that there would be buying at these levels, less downside risk.

https://goldprice.org/gold-price-history.html

[RockyTx]

world annual mine output
of gold is 3000 metric-tons plus.

148 tons per 3 months.
no big deal

[zeestephen]

From a technical point of view, it might be time to start nibbling on gold again.

After declining for 6 straight months, gold has put in a “triple bottom” at $1185 - that means traders have tested $1185 three times, but it has not broken through to the down side.

Gold broke out, almost straight up, about 3 weeks ago, to $1230, and the chart looks pretty solid at that level.

Based on my recent experience with food and rent prices, my “personal inflation rate” is about 20 percent!

[VanShuyten]

Platinum, which is much rarer than gold and has industrial uses, is much cheaper than gold. Why aren’t they all buying platinum?

[SkyPilot]

The Globalists and manipulators are going to crash the dollar and the market.

It's just a question of when?