Unknown Wall Street Entity Bought USD 5 Billion Worth of Physical Gold. Paper Gold Holders are scared.
16th February 2025
Unknown Wall Street Entity Bought USD 5 Billion Worth of Physical Gold. Paper Gold Holders are scared.
Dear Investors,
Namaste! In the month of January some unknown entity in the WALL STREET bought USD 5 Billion worth of Physical Gold in January. The Gold was transferred from London walt to the USA walt. From November onwards the USA has become the NET IMPORTER of Gold as against the exporters of the gold.
One of the reasons given is that TRUMP would increase the Taxes so before he increased the taxes – people imported the gold. But this is not an appealing reason.
The difference in the Spot and Futures prices on COMEX has gone up to USD 40. Last time it went to USD 100 in 2020 – COVID times. Ideally, with such a difference – traders should buy in SPOT and SELL in the FUTURES and pocket the USD 40 per OUNCE profit. But very few traders are doing the same – maybe they are aware that they will not get the FUTURES deliveries.
The Gold withdrawal from the LONDON walt used to take a week’s time previously. Now they are taking a month or more. It means there is a heavy shortage of the GOLD in reality. This can be one of the reasons for the Gold price shooting up.
Along these developments – China has given permission to the local insurance companies to buy gold up to 1% of their assets. Which will add USD 27 Billions demand. This is a huge demand and it will surely take the prices of the yellow metal up.
Add another source of the Demand – the Central bankers of the World – including Chinese – are also adding the GOLD.
What is happening?
Big firms like JP Morgan and BlackRock are said to be shorting the gold one side. They have sold gold multiple times than the actual physical gold. So, those who bought the paper gold contracts – will not get the deliveries of the gold. They have been doing this in the past also.
They did not face the problems as most traders settle in the CASH and not with the actual gold.
In the current situations people are asking for the actual deliveries. This has created the shortage of the gold and gold leasing rates have gone to 10-12% a year which is more than the FD rates or the other comparable income sources.
What does it mean for the investors?
At Destiny Management we always try to see the coming time in as much detail as possible and with Guru’s grace – all our calls are going ACCURATE.
On 26th March 2020 -we wrote the following post - World over Currency and Financial system are slated to change thanks to 3 Major Cycles in 2020-2021.
You can read the same. We are aware about the coming time and the challenges normal people are going to face in the coming time.
We have strictly advised not to buy GOLD ETFs / GOLD BONDS or any other kind of paper gold or silver many times in our blogs. Our preference is only for the physical, if at all those who want to buy.
What is our understanding?
De-dollarisation in the theme of the time. Those who are exporting to the USA are converting their DOLLARS into GOLD – mainly China. Trump is planning to stop the same as the USA supremacy will be lost if the DOLLAR is stopped to be accepted.
BRICS have announced to launch their own currency but with the TRUMP tariff threats – things may take some more time.
With this background – if we see the USA is buying the Physical GOLD big time – it makes sense. As such they are also thinking to monetise their GOLD reserves.
This means the GOLD prices may remain steady or elevated in the near future. However, we will advise to watch the USA moves on the GOLD in the coming months before taking a BIG JUMP in buying the GOLD. Nobody knows what they will actually do. But something unexpected will come for sure.
This is a developing story. We will keep updating over time.
Wish you all a Super Sunday.
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Learn a Lesson. Live with Passion & Invest with Reason.
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