When it comes to tracking the nuances at the all important margin of the gold market, few are as observant as ADMISI's Paul Mylchreest, whose December 2014 analysis showed the stunning role gold holds in the new normal as a funding "currency" for BOJ interventions in the form of a long Nikkei/short gold (and vice versa) pair trade, indicating that central banks directly intervene in gold pricing (by selling, of course) when seeking to push paper asset prices higher.
In his latest report he follows up with an even more disturbing analysis on the state of the gold market. Specifically, he looks at what historically has been the hub of gold trading, the London bullion market, and finds that it "is running into a problem and is facing the biggest challenge since it collapsed from an insufficient supply of physical gold in March 1968."
We suggest readers set aside at least an hour, and two coffees for this "must read" report. For those pressed for time, the executive summary is as follows: using data from the LBMA and Bank of England on gold stored in London vaults and net UK gold export data from HM Revenue & Customs, Mylchreest calculates that the “float” of physical gold in London (excluding gold owned by ETFs and central banks) has recently declined to +/- zero.
If you would like to know which stocks we are buying and selling please join us at ‘Stock Trader’ our premium investment service.
Subscribe for 12 months with recurring billing - $199
Buy 12 months of subscription time - $199
If you are new to investment in the precious metals sector then you can subscribe of our FREE newsletters regarding gold stocks, silver stocks and uranium stocks, just click on the links and enter your email address and we will email you our articles along with other interesting posts.
Please remember to check your spam folder once you have subscribed to ensure that our verification email has not gone astray and you are getting our emails.
Follow us on Twitter @goldprices