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February 26, 2010 / Hal (GT)

China, India, IMF and COMEX (CRIMEX)


If you follow my twitter stream then the likelihood is you’ve already seen these stories across the internet. I tweeted them as I discovered and read them. Of course there a few more that I sent out in the stream then I’m going to list here. These I think are the ones that you should take note of when it comes to the precious metals markets today.

First off, a quick check at Lear Capital’s free application for tracking gold, silver, and platinum reveals that gold as I type is $1,113.50. Silver is $16.39. Platinum $1,543.30. Of those three silver to me has been the one to really watch.  Of course I’m happy to see gold back above $1,100.

The best comes first today from Peter Grandich’s blog and is an absolute must read:

COMEX INVENTORY DATA REVEAL AN ALARMING TREND

…the data reveals a very shocking trend. That is that the registered (dealer) inventory is being drawn down at a phenomenal rate. In silver the inventory has dropped by 24% in 6 months while in gold it has dropped an eye-popping 41% in 6 months! The withdrawal to deposit ratio for registered silver is 14:1 and in gold it is 5:1. If this rate of drawdown continues the registered inventory of silver will be exhausted in 18.8 months and in just 8.5 months for gold!

Second is this article on Seeking Alpha:

Why China’s Rumored IMF Gold Purchase, If True, Would Be Highly Significant

A yet to be verified story from Rough & Polished, a Moscow based website, reported that China had “confirmed its decision to acquire 191.3 tons of gold auctioned by the International Monetary Fund.” Of course, until official confirmation comes from China, no one will really know if this story is true or not. However, if true, here’s why this story would be hugely significant to the gold market.

It’s interesting me that the focus is now on China and not India as some reports first put forth. How it will all shake out is up for speculation. If it does go to China I suspect it will be a great political statement pointed directly at the US.

Finally, and on that note, check out this short little piece:

China must be long-term gold buyer – govt researcher

China has to keep buying gold over a long period and any price fall will present a good buying opportunity, Xia Bin, head of the financial institute of the Development Research Centre, a think-tank under the Cabinet, said on Friday.

“The long-term strategy should be very clear, that is, China has to keep buying gold; but the detailed timing should be decided by the price curve,” Xia told reporters.

China had to increase its gold reserves to underpin the yuan’s international role, he said.

But he declined to give details on when China should buy.

Whatever takes place it’s going to be fun to watch. 🙂

Okay, I’m at the end and let me see… Gold spot now $1,115.10. Silver $16.46. Platinum $1,545.40.

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