Gold or any commodity always does this. It always advances and backs off. Always. Its behaviour in the past year has been a bit out of sync. This steady upward climb behavoiur is more common. It is more like an equity than a commodity. But in this it is classically a good sign.
Tell some Honcho with his hands on the trigger of a thousands tons of metal that he was a plumb fool for buying high and selling low, and he will make himself wise again, by selling more.
The bank did not decide to sell gold. They are announcing sales of borrowed gold that cannot be returned as it was sold some time ago. This has been gone over before again and again. Why is it not announced that someone bought the gold? Only that it is sold. It has to be pointed out that most G7 countries' currencies are fairly fragile, given their money supply and balance of payments. The gold smoke a mirrors game is the only thing that keeps people's eye off the ball.
The only way the G7 beat the raw material producing nations, is by loaning them money, keeping resources priced low with cartels, and being the hogs of the IMF whereby their currency trading can keep other nations looking bad, while their currencies look good. In the end the chickens will come home to roost. The Japanese realized this and attempted to keep materials high, so production could afforded. Along comes a genius of a Montreal metals dealer and he sues the Japanese. Down goes the cartel, and the copper price tanks. Chile is in trouble but even more so, are Canada and Mexico.
Strangely the cheapest place to mine and refine copper in the world, even given that it is sulphide, is BC. This is because much of the copper is high grade sulphide (Bornite) making a high grade concentrate, and there is cheap flow-through water power. Lower grade of lower tonnages can be mined here than anywhere else. (That is also why they choose to mine aluminum in Jamaica and refine it in Canada next to water power generation.) And high grade deposits of copper in BC are actually plentiful. So what does the BC provincial government do? They wall off the largest copper resource in the world, that runs from the Stikine River to Alaska with 100,000,000 ton deposits of 1% copper, and make it into a Park. Modern thinking. A great economic advantage for Canada. If anything makes money and they didn't ask a liberal lawyer if his multi lingual nephew can be president, kill it.
What do nations like Germany offer Chile or the Congo when they finance their operations? Credit on engineering and mining machinery. Steel, pumps, ball bearings and process. If they (grs.) did not do these things themselves they could never export it. Eventually the art will die. The third world nations have the resources but cannot bootstrap, because the don't have Heidleberg University and the Ruhr. We had the equivalent in Canada, but we got smart, and threw it away. We educate foreigners, and shut down our steel industry. Nice move, Canada. Few nations fly it on their own; are independent. South Africa was one such nation. It's inordinate control of gold and diamonds gave them enormous financial power for a tiny country. This, more than anything else was why the US and Europe decided to shut them down, on the pretext of having a refined racial conscience. Sure.
A few asides, but why knot?
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