Richard,
The market has been unwilling to "support" gold, preferring paper currencies for their liquidity and based upon what they feel are improving economic conditions (such as relatively benign OVERALL inflation... etc)
As a result, the private market has been distributing gold into the subsidized strength created by the Central Banks not selling the quantities they should be.
Of course, I'm sure the bankers are also less than willing to dump gold enmasse, thus disrupting their ability to get a decent price for their assets or causing overvaluation of their paper currencies.
The latter is probaly one of the main reasons we haven't seen the US treasuries being too keen to sell our gold reserves. The US dollar is too strong as it is.
And btw, many goldbugs are clamoring for transparency in the gold markets which would be consistent with regard to a commodity market. However, because they B&M everytime a CB sells the yellow metal, gold traders HOWL about underhanded and secret transactions which are completely consistent with how CBs handle their interventions in the currency markets.
So you face a choice... completely commoditize the gold market and get your transparency, or relegate yourselves to the fact that, as it is treated as a monetary asset, the CBs can do what they want in the gold markets.
Regards,
Ron |
