Gold supplies questioned as price doesn’t seem to match demand

This weekend I publish a GoldMoney article with irrefutable evidence that central banks have been supplying gold into the market. Very simply, since the April price-smash gold has been supplied to satisfy the global surge in demand, otherwise the price would have bounced and a bear-squeeze ensued, rapidly taking prices higher. The fact that gold has not recovered significantly leaves three possibilities. Take your pick:

1.       Central banks are feeding gold into the market.

2.       A flying saucer loaded with gold from an extra-terrestrial source has landed.

3.       Global reports of a surge in demand for physical gold, delivery delays from refiners and price premiums from Dubai to Hong Kong are all an elaborate hoax.

Two of these options are conspiracy theories. The one that isn’t is supported by the very different performance of silver, because central banks and their western governments do not have stockpiles to ease the market shortage, while they do have a diminishing stockpile of gold. The difference between gold, where the four largest bullion banks are now net long in the futures market and silver where they are still short, has been reflected at times of quiet trading when gold has frequently been marginally down while silver has been marginally up. The market signal is clear: If there are a few buyers looking to buy on dips, let them buy gold and not silver.

The difference between the positions of the largest four traders (all bullion banks) in gold and silver is shown by comparing the two charts below.

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