BARRON'S: There Were Two Gigantic, Suspicious Sales Of Gold On Friday That Caused The Price To Plunge

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Gold went down the toilet again on Friday, and is now close to revisiting its April lows.

This gold weakness is causing a lot of consternation to fans of it who don't understand how the precious metal can keep falling, when central banks around the world continue to press down on the gas pedal.

A lot of gold bugs think the price is being manipulated somehow, or that there's some divergence between what's going on in "paper" gold (gold prices that are tied to ETFs) and what's going on in physical gold (people buying ingots or jewelery)

Randall W. Forsyth at Barron's fans the flames of goldbug conspiracy theorists a bit this weekend, arguing that there have been suspicious sales in gold seen on the exchanges (probably driven by the ETFs).

He writes:

These improbable moves have made gold bugs suspicious, which isn't unusual. Folks who own gold do so because they don't trust the status quo, especially when it comes to government-issued paper money. But just because you're paranoid doesn't mean somebody isn't out to get you. They point to bursts of selling on Friday, April 12, which resulted in prices plunging by more than 5%, and to dumping that resumed the following Monday in Asia, early in the day when markets are illiquid. That culminated in a 9% collapse by the time the New York market had settled. But a seller who wanted to unload a large position at the optimal price would have done precisely the opposite—liquidate as discreetly as possible. Instead, sellers dumped the equivalent of more than 300 tons of the metal in staccato-like blasts during those sessions.

THE SUSPICIOUS SELLING resumed this Friday, with the equivalent of 17 tons sold on the New York Comex in two bursts in the morning, according to market sources. And the declines continued after the settlement of futures trading in the early afternoon as the SPDR Gold Trust ETF slumped a total of 2.25% on the day, to close at 131.07, below the April 15 close of 131.31. (The ETF represents a bit less than 1/10th of an ounce of gold.) The current-month May futures contract plunged 1.6%, or $22.20, to $1,364.90 an ounce on the Comex.

Read the full thing here --->

Read more: http://www.businessinsider.com/barrons-two-big-gold-sales-on-friday-2013-5#ixzz2Tq3xoG26

Russia emerges as world's top gold buyer, adding 570 metric tons in last decade

End Of Days News

 

Over the last decade Russia’s Central Bank acquired 570 metric tonnes of gold. The amount is almost triple the weight of the American Statue of Liberty and makes Russia the world’s biggest buyer of gold.

The amount is a qurter more than runner-up China, Bloomberg reported on Monday.

Countries like Russia and China use such stockpiles as an economic buffer against another wave of economic crisis or US dollar devaluation, as both remain weary of the US Federal Reserve’s stability and prefer to edge their bets on gold.

It’s also proven a sound investment and opportunity for the Russian state to make money, with gold prices crawling upwards over the past 12 years, gaining 12% in 2012 alone.  On Monday gold traded at $1650 per ounce and analysts expect the price to keep growing in 2013 to reach $1825 by the end of the year. However French investment bank Natixis dampened the outlook by forecasting a drop in price to $1500 by 2014, Finmarket.ru reports.

But the link between high gold prices and falling crude has plagued Russia in the past. In 1998, when Russia defaulted on $40 billion of domestic debt, it took 28 barrels of crude to buy an ounce of gold, according to Bloomberg research. Two years later, when Vladimir Putin came to power, an ounce was worth 11.5 barrels. By 2005 the ratio had dropped to 6.5 and that is when President Putin ordered his Central Bank to buy. In just a month the proportion of gold in Russia’s total reserve rose from 2.2% to 3.5%.

In 2000 Vladimir Putin inherited a country with 384 metric tons of gold and more than doubled its gold reserve in 12 years – according to official data from World Gold Council, in October 2012 gold made up 9.6% of Russia’s national forex reserve and stood at 936.7 metric tons.

However it is still far from its historic high – in 1941 Russia held a record 2800 tons of the precious metal and thanks to these reserves successfully recovered after World War II.

Russia’s gold rush still doesn’t mean it tops the list of global gold owners. The United States holds the leading position with 8133.5 tons of gold which make 75.4% of country’s total reserve. Germany runs second with 3391.3 tons and the IMF third with 2814 tons. China and Russia are sitting in sixth and eighth place respectively.

China however is suspected of downplaying its actual volume of gold by 3-4 times, Zerohedge news website reports, and prepares to introduce Yuan as world’s reserve currency. Back in 2009 China set a goal to overtake the US in the rankings. When the Chinese Central bank is ready to officially declare its actual gold reserve volume, world markets will experience serious problems, Zerohedge.com believes.

Major global investor and consulting adviser to the Obama administration, George Soros also appears to have a golden investment streak. In August 2012 it was reported, Mr. Soros offloaded over a million shares in financial companies and banks and purchased $130 million in gold. His move to sell stocks and beef up on gold, is being interpreted by some as a sign of changing investment strategy in the world market.

http://rt.com/business/news/russia-biggest-gold-buyer-946/



AGAIN: US banks shaken by biggest fund withdrawals since 9/11

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US Federal Reserve is reporting a major deposit withdrawal from the nation’s bank accounts. The financial system has not seen such a massive fund outflow since 9/11 attacks.
­The first week of January 2013 has seen $114 billion withdrawn from 25 of the US’ biggest banks, pushing deposits down to $5.37 trillion, according to the US Fed. Financial analysts suggest it could be down to the Transaction Account Guarantee insurance program coming to an end on December 31 last year and clients moving their money that is no longer insured by the government.
The program was introduced in the wake of the 2008 crisis in order to support the banking system. It provided insurance for around $1.5 trillion in non-interest-bearing accounts with a limit of $250,000. It was aimed at medium and small banks as the creators of the program believed bigger banks would cope with the crisis themselves.
So the current “fast pace” of withdrawal comes as a surprise to financial analysts because the deposits are slipping away from those banks which supposedly were safe. Experts expected savers in small and medium banks would turn to bigger players come December 31.
There are a number of reasons behind this unpredicted fund outflow. Some experts believe it has to do with the beginning of the year when the money is randomly needed here and there. Others have concluded the funds are getting down to business and being invested.
Another set of data from the US Federal Reserve shows some deposits may have moved within the banking system from one type of account to another.

http://rt.com/business/news/us-major-deposit-withdrawal-740/