Where Is All The Gold Going?

Where the gold is going is certainly no secret. Whilst the West has not got a clue of the strategic significance of physical gold, the East’s accumulation of the yellow metal continues unabated.

Since 2008 just China and India have accumulated 26,000 tonnes of gold. That is a remarkable figure and virtually the total mine production for that period. There are many other Eastern countries which also continue to buy major quantities of gold such as Russia, Turkey, Iran, and Thailand.

CHINA AND INDIA HAVE BOUGHT 26,000 TONNES SINCE 2008

For decades most Western central banks have been reducing their holdings either by official selling, leasing or covertly disposing of their gold. The top 20 central bank holders of gold have officially a total of 29,000 tonnes. But it is doubtful that they even hold as much as 50% of that in physical form in their possession.

REAL PHYSICAL GOLD RESERVES WELL BELOW THESE OFFICIAL FIGURES

NO CENTRAL BANK PUBLISHES A PHYSICAL GOLD AUDIT

The US, for example, haven’t had a physical full audit since Eisenhower’s time in the 1950s. Therefore it is impossible to ascertain what the true holding is. But it would be surprising if the US actually has half of the 8,100 in an unencumbered physical form. If they haven’t sold it covertly, they have most likely leased a major percentage to the market through the bullion banks. That gold no longer stays in London and New York but is bought by China and India and shipped to these countries via Switzerland. The bullion banks then issue an IOU to the central banks which is only backed by paper since the physical will never return from Asia.

CENTRAL BANK GOLD COMING OUT OF LONDON AND NEW YORK

Last month Switzerland imported 92 tonnes of gold from the UK. We know of course that the UK is not a gold producing country. So these are 400 oz bars from UK bullion banks that are bought by Swiss refiners to break down into 1 kg bars and ship to China and India. The majority of the 33 tonnes that came from the US in September is also 400 oz bars from US bullion banks. Most of this UK and US gold is likely to come from central banks.