The Continuing Battle Between Paper And Physical Metal

The idea that money can be conjured out of thin air, the notion that the paper traders and those who control the Anglo-American banking system can always and forever “price” assets like gold and silver with instruments trading hundreds of times the underlying physical metal, will die a slow death.

Along these lines, Dave in Denver over at truthingold.blogspot.com has some useful insider information for you about the realities of the tightness in the physical gold and silver markets worth reading:

“First, I received this comment from John Brimelow’s “Gold Jottings” report, which comes from Gerhard Schubert, head of Precious Metals at Emirates NBD, the largest banking group in the Middle East. Keep in mind that Middle Eastern buyers demand physical delivery of their gold. Here’s the quote from his latest weekly report:

I have not seen in my 35 years in precious metals such a determined and strong global physical demand for gold. The UAE physical markets have been cleared out by buyers from all walks of life. The premiums, which have been asked for and which have been paid have been the cornerstone of the gold price recovery. It is very rare that physical markets can have a serious impact on market prices, which are normally driven solely by derivatives and futures contracts…

I did speak during the week with several refineries in the world, of course including the UAE refineries, and the waiting period for 995 kilo bars is easily 2-3 weeks and goes into June in some cases. A large portion of the 995 kilo bars in the UAE goes normally into the Indian market, but a lot of the available 995 kilo bars are destined for Turkey, at this time. We heard that premiums paid in Turkey have reached anything between US $ 20 and US $ 35 per ounce.” Read more at truthingold.blogspot.com