Physical Gold Drainage Backfire
Amazing what can be done when 22 million paper gold ounces is dropped on the market on a single day, the Leap Year Day of all days. Witness the leap downward in paper gold price and perceived market integrity. No need for an honest market.
The CFTC remains asleep at the wheel, or with eyes firmly fixed on their master clubhouse on Wall Street, the chain tugged hard. The end result, as described by the notorious London Trader on King World News, is that a magnificent amount of physical gold is leaving the COMEX and LBMA.
The United States remains transfixed on the paper gold price. The real action lies in the physical London gold market, where Asians are fast draining the London gold supply. Once again, a powerful dichotomy exists. The Boyz can control the paper gold price, but they are therefore gifting the Asian buyers with a hefty discount that results in truckloads of gold bullion rolling out the ramps in delivery. As desperation rises to ambush with naked gold sales devoid of metal, enabled by USGovt and UKGovt watchful eyes, the gold inventory is fast vanishing.
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The divergence will continue to play out, as the paper gold price might decline but the physical gold price will rise. The COMEX will become an irrelevant arena empty of inventory, even as London rots hollow. The gold price on the real physical honest side must continue upward, since supply is fast doing a vanishing act.
It is going from West to East and will not return in our generation, along with true power. The recent episode of vast paper gold sales without benefit of collateral metal cannot keep the gold price down. It is recovering. The rally to $2000 was not permitted. The event has merely marked the road with a support level. Nothing can keep gold down, nothing. It is real money in an era when paper masquerading as money is being revealed for its faulty makeup, subject to acid drips.