{"id":65699,"date":"2023-08-29T05:20:26","date_gmt":"2023-08-29T10:20:26","guid":{"rendered":"https:\/\/olduvai.ca\/?p=65699"},"modified":"2023-08-29T05:20:26","modified_gmt":"2023-08-29T10:20:26","slug":"the-west-is-losing-control-over-the-gold-price","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=65699","title":{"rendered":"The West Is Losing Control Over the Gold Price"},"content":{"rendered":"

The West Is Losing Control Over the Gold Price<\/a><\/h3>\n
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TABLE OF CONTENTS:<\/strong><\/div>\n
Introduction<\/a>The West is Losing its Gold Pricing Power<\/a>The East on a Gold Buying Spree<\/a>Conclusion<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n
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An important change has unfolded in the global gold market. The East has been driving up the gold price, predominantly in late 2022 and the first months of 2023, breaking the West\u2019s long standing pricing power.<\/p>\n

\"turkeyGold bazaar in Turkey. Pricing power in the gold market has recently shifted to the East.<\/em><\/span><\/p>\n<\/div>\n

Until recently, Western institutional money was driving the\u00a0price of gold<\/a>\u00a0in wholesale markets such as London, mainly based on real interest rates. Gold was bought when real rates fell and vice versa. However, from late 2022 until June 2023 gold was up 17% while real rates were more or less flat, and Western institutions were net\u00a0sellers<\/em>. Most likely, Eastern central banks, and Turkish and Chinese private demand, lifted the price of gold.<\/p>\n

Introduction<\/h2>\n

For about ninety years, up until 2022, there was a pattern of above-ground gold moving from West to East and back, in sync with the gold price falling and rising.\u00a0Western institutions set the price of gold<\/a>\u00a0and bought from the East in bull markets. In bear markets the West sold to the East. For more information read my article:\u00a0The West\u2013East Ebb and Flood of Gold Revisited<\/a>.<\/p>\n

If we zoom in on the period from 2006 through 2021 the main reason for Western institutions to buy or sell gold was\u00a0the 10-year TIPS rate<\/a>, which reflects the 10-year expected real interest rate (\u201creal rate,\u201d in short) of US government bonds.<\/p>\n

The physical gold price was predominantly set in the London Bullion Market and to a lesser extent Switzerland. Gold trade in London can be divided in three categories:<\/p>\n

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

The West Is Losing Control Over the Gold Price TABLE OF CONTENTS: IntroductionThe West is Losing its Gold Pricing PowerThe East on a Gold Buying SpreeConclusion An important change has unfolded in the global gold market. The East has been driving up the gold price, predominantly in late 2022 and the first months of 2023, […]<\/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":[124,32801,374,27826,647,11108],"class_list":["post-65699","post","type-post","status-publish","format-standard","hentry","category-economics","tag-central-banks","tag-gainsville-coins","tag-gold","tag-jan-nieuwenhuijs","tag-precious-metals","tag-west-vs-east"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65699","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=65699"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65699\/revisions"}],"predecessor-version":[{"id":65700,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/65699\/revisions\/65700"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=65699"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=65699"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=65699"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}