{"id":38437,"date":"2018-09-28T09:56:33","date_gmt":"2018-09-28T14:56:33","guid":{"rendered":"http:\/\/olduvai.ca\/?p=38437"},"modified":"2018-09-28T09:56:33","modified_gmt":"2018-09-28T14:56:33","slug":"global-central-bank-buying-puts-a-floor-under-the-price-of-gold","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=38437","title":{"rendered":"Global Central Bank Buying Puts A Floor Under The Price of Gold"},"content":{"rendered":"
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Global Central Bank Buying Puts A Floor Under The Price of Gold<\/a><\/h3>\n

The only reason the price of gold\u2019s down on the year is because of a strong dollar.<\/p>\n

Actually \u2013 for how much the dollar\u2019s rallied this year, gold holding around the $1,200 range is very bullish.<\/p>\n

And if gold\u2019s been able to hold its own during a stronger dollar and<\/em> aggressive Federal Reserve tightening \u2013 imagine what it will do once they decide to begin easing<\/em>. . .<\/p>\n

Putting it simply \u2013 the price will soar. . .<\/p>\n

So, who\u2019s taking advantage of this weaker gold price?<\/p>\n

The Global Central banks \u2013 but specifically the Emerging Markets.<\/p>\n

Here is the latest data showing the Q2\/2018 Central Bank gold reserves.<\/p>\n

This comes after Central Banks added 116.5 tons to their \u2018official\u2019<\/em> reserves in Q1\/2018.\u00a0 This was the highest<\/em> first quarter increase over the last four years.<\/p>\n

\"\"<\/p>\n

It\u2019s widely known that in the 1990\u2019s and first decade of the new millennium \u2013 Central Bank\u2019s were dumping their gold<\/a>.<\/em><\/p>\n

Starting in the late 1980\u2019s, gold reserves in Central Bank vaults declined from roughly 36,000 to just under 30,000. That\u2019s a huge drop.<\/p>\n

To be clear, they didn\u2019t just sell<\/em> the gold. The Central Banks also engaged in the \u2018gold carry trade\u2019. <\/em><\/p>\n

This is when Central Banks \u2018lease\u2019<\/em> their gold reserves to investment banks for a set amount of time and a bit of interest.<\/p>\n

The investment banks then sell that gold in to\u00a0the market \u2013 get dollars in return \u2013 and buy bonds or equities.<\/p>\n

After a while, they take the profits and buy the gold back\u00a0\u2013 returning it to the Central Banks.<\/p>\n

You can see how lucrative this trade is. And how it incentivizes the investment banks to keep the gold price down (since they have to buy back the gold later to return it to the Central Banks).<\/p>\n

\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"

Global Central Bank Buying Puts A Floor Under The Price of Gold The only reason the price of gold\u2019s down on the year is because of a strong dollar. Actually \u2013 for how much the dollar\u2019s rallied this year, gold holding around the $1,200 range is very bullish. And if gold\u2019s been able to hold […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[19913,124,374,3622,19915,839],"class_list":["post-38437","post","type-post","status-publish","format-standard","hentry","category-economics","tag-adem-tumerkan","tag-central-banks","tag-gold","tag-gold-price","tag-palisade-research","tag-us-dollar"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38437","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=38437"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38437\/revisions"}],"predecessor-version":[{"id":38439,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38437\/revisions\/38439"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=38437"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=38437"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=38437"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}