From January 21st to February 4th the gold ETF GLD has lost over 50 tonnes of physical gold.
This is causing some gold analysts to say that golds run may be over.
It will never cease to amaze me how short memories are.
With copper heading toward highs right now, and industrial precious metals doing well, there seems to be confidence in global growth. Even during the turmoil in Egypt, gold did not fly, but held steady and investors actually headed to the dollar for safety instead of the precious metal.
The emerging markets may be the cause that is spurring this activity, but I can’t seem to get that purchase of 80% of the LME’s copper reserves made by JP Morgan not long ago, out of the back of my mind. Ever since that purchase was made, copper prices have been on the uptick. Some have said that part of the reason JPM went after copper was to offset losses in their infamous short on silver, which they seem to have lost control of.
With announcements out of China, that they will be increasing the countries gold reserves, India not slowing at all, more money being printed by the federal reserve, and inflation knocking on the doors of numerous economies, the shedding of money from the GLD could merely be a sign that investors are exchanging paper gold assets for the real thing, gold bullion. It has seemed lately that the gap in value of paper gold and physical gold will start to grow, time will tell.
As you head in to the week, keep in mind that the DOW is at the same level of late 07, early 08. This was when everyone had a job and didn’t mind spending money. Ask yourself how these same levels can be sustained with so many Americans unemployed at the moment.