I have no idea where Zeev came up with the 20,000 tons, but I've already addressed it in terms of total above ground supply.
Message 15369299
Let me address it in terms of worldwide monetary reserve holdings, which are estimated to be somewhere in the 32,000 tons area. 85% of that falls under the Washington Agreement which curtails the amount sold to around 400 tons a year. Indeed 400 tons a year (a little over 1% of total holdings) has been the average over the last twenty years. So despite the noise about official selling capping gold, the historic facts of 400 tons supplied and the agreements for a future 400 tons, simply don't support Zeev's theory.
That leaves the 15% of monetary holdings outside the Agreement. That would be 4,800 tons (or less), not 20,000. There is now evidence that a fair chunk of those non-Agreement holdings were in fact sold to cap the 1999 gold rally. Perhaps that's the gold Zeev is concerned about? I won't deny that that amount if sold aggressively by non-Agreement participants could temporarily cap a rally in the short run. I do not believe however, it is a permanent barrier to a sustained bull move in gold. In part this is because one has to wonder how much of the 4,800 non-Agreement tons has already been leased out to so called safe AAA financial institutions like Goldman Sacs, Deutsche Bank, and J.P. Morgan for their producers hedging schemes. And if it's been leased, and in turn sold for future delivery by producers, how can it be resold without some balancing purchase down the food chain? |
