Sunday, October 12, 2014

GOLD PRICE WILL INCREASE---DEPENDS ON US-US HAS NO GOLD


In continuation to my previous research articles I have found that over the next 2 to 3 years the  recession of the World Economy WILL COME BACK AGAIN. Well today’s article might ask you to two things to do either to believe or not believe the facts, factual and analysis. Many of my readers must be aware that whenever there is any form of QE particularly to printing of money into the system, a country has to pledge and balance its Gold Reserves.  Now let reminded of one of the incidents of last year’s where Germany the economy struggling with growth and employment requested US to give back its pledged gold of 674 tons gold from the New York Fed and the French Central Bank. Germany got only 5%of the Gold of 37 tons and US said that they will pay back the rest over the next 8 years. This means that US don’t have the gold which have been pledged to them and they will take 8 years to pay back the same. The below two videos are sufficient enough to disclose the rest of the story.



Now the irony of the story is that suddenly In June 2014, however, according to a Bloomberg news report, Germany suddenly dropped its gold repatriation request. “The Americans are taking good care of our gold,” said Norbert Barthle, the budget spokesman for Germany’s Christian Democratic Party. Now I request my readers to find out the rationales behind the same action.

While doing my research I find that Gold prices came down last year and their was a dramatic fall of the price during H1 of 2013(calendar year). Indian government –UPA II raised the voice that import of Gold was happening more and hence the country is facing the problem of high fiscal deficit. The Indian government banned import of Gold and the prices also came down. Well all these were planned by US since if the prices came down due to demand control then for US it would be easy to buy the Gold at low prices and build the reserves and payback the same. Further Fed doesn’t like rising gold prices as they have a psychological impact that undermines the value of and confidence in the dollar. Hence its well clear that for some other economy India and its political system played the game with Economy and market. Its also increased the smuggled gold market during that time.

GOLD import part in Indian import % is very low as compared to other products particularly through the window of reverse taxation where as individual spare parts import has taxation where as import of the final product don’t have any such high taxation. Now just imagine the electronic and mobile phone market which has grown in India and the import of the same. Coal and other raw material import have been on the highest slab after the ban of coal blocks. Now this also validates the economic data which was manipulated by the Indian Government under the UPA-II regime in order to satisfy the US economy.

US did naked short selling and made double profits during H1 2013 when gold prices went for a wild toss. I would like to give few of the examples of Naked short selling which were executed by the US and its top players which I also covered briefly in my last year article http://www.ianalysis.co.in/2013/04/goldbillions-made.html.

H1 2013 story of Gold Price fall

A couple of short news being spread are as follows In February, Credit Suisse ‘predicted’ that the gold market had peaked, SocGen acclaimed the end of the gold era was upon us, and recently Goldman Sachs told everyone to short the metal. The big father George Soros sold down his GLD position by about 55% as of the end of 2012 and had just 600,000 shares remaining. Well this "smartest guy in the room" locking in a profit after a 12 year bull market.
Well the gold price fall was something beyond creativity. The following instances would make my testimony and research very productive.

1. The gold futures markets opened in New York on Friday 12th April to a monumental 3.4 million ounces (100 tonnes) of gold selling of the June futures contract (see below) in what proved to be only an opening shot.

2. Two hours later the initial selling rumored to have been routed through Merrill Lynch's hit the market by a further 10 million ounces of selling (300 tonnes) over the following 30 minutes of trading.

Naked short selling of gold contracts that occurred on January 6, 2014: more than 12,000 contracts traded – equal to more than 10% of the day’s entire volume during the 23 hour trading period in which gold futures trade. No news to support the same. At the same time, no other securities market (other than silver) experienced any unusual price or volume movement. 12,000 contracts represents 1.2 million ounces of gold, an amount that exceeds by a factor of three the total amount of gold in Comex vaults that could be delivered to the buyers of these contracts.

Well the above points are sufficient enough to proof the story that US is buy in buying Gold at low prices. US don’t like China for its policy of converting and shifting its Dollar reserves to Gold. But it can’t take any wild action with china since majority of US manufacturing base is in China.

Now when the Gold Prices would increase depends less of demand and supply and more on QE since if there is any QE required in Future then price of Gold Have to increase so that valuation of the same and equivalent amount of dollar is printed. The London Bullion Marketing Association (LBMA) physical gold market plays a pivotal role in Gold Market. The LBMA is comprised of several large bullion banks who make a market in physical gold. The reason behind asking India to curb gold import is that US fears that their dollar might be replaced and diversification of investments from dollar to Gold-this will replace dollar as the reserve currency. Well a currency with high fiscal deficit would be risky for trade in the next 6 years from now hence every economy would try to save himself.

Further in my research and in continuation to my previous article I find that US will replace the entire middle east from crude protection by 2020 since by that time US deficit would create havoc pressure on the dollar which will force many economies to stop using dollar as the currency and in order to protect the green back crude production and trade is the best option.So enjoy the low price of crude till then.

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