14 May 2013

Gold Daily and Silver Weekly Charts - South Africa Imports $1 Billion In Gold Bullion From NYC?

The stories on the sidebar are interesting today. The last piece by Golem XIV about What Bankers Don't Know is a 'must read' in my opinion.

I was greatly amused to read that South Africa imported about a billion dollars in gold bullion from New York earlier this year, an amount large enough to turn their trade surplus into a deficit.

The reason given was that South Africa had problems in its mining sector because of union actions etc.

What is not stated is that it was cheaper for South Africa to ship gold all the way from New York to meet their delivery obligations than it was to acquire the bullion from their own region, or the regions where their customers reside, which are presumably in Asia.

Couple this with the news we had that bullion shortages in Hong Kong were being met by gold bullion imports from London and Switzerland.

Gold is flowing from west to east, and this is precipitated by price distortions in the paper markets of New York and London.

The pundits on Bloomberg TV met the comments from Putin about Russia's desire for a change in the reserve currency with contemptuous laughter and snide derision after the close today.

It reminded me of what Robert Johnson said about the attitude on Wall Street. 'Ok, you're mad. So what are you going to do about it?'

There are a number of May gold contracts at the Comex standing for delivery. I suspect they are wiseguys sniffing around for a premium on a cash settlement. I don't think the Comex would allow anyone to take delivery of that much of the real deal.

This is going to get interesting.