Sunday, July 1, 2018

Gold holders need to continue to ignore the manipulated paper spot price as nations and pension funds ditch ETF's for physical gold

In finance as in physics, there is always an equal and opposite reaction anytime natural forces are corrupted by either 'acts of God' or human engineered manipulation.  And perhaps no current market is showing this truth better than with the gold market.

With the Comex having to ship their paper contracts over to the UK at an ever increasing and alarming rate because their price manipulation has far exceeded the physical stock backing these contracts, the decline in spot prices has allowed nations, central banks, and now even pension funds to find it more lucrative to ditch ETF's in favor of acquiring physical gold.

Another country is betting on physical gold. Switzerland's pension fund has boosted its investments in bullion, switching from the paper-backed securities in US dollars.  
“The Swiss government Pension System decided to change from paper gold in the amount of 700 million CHF into physical gold and store it in Switzerland. The 700 million only stands for 2 percent of the total assets, but it is quite a surprise that they do this,” Claudio Grass, an independent precious metals advisor and Mises Ambassador told 
According to Grass, it is a strong signal that people should take seriously, since a pension fund is an investment vehicle that has a long-term strategy. 
“Physical gold is the best way to hedge as well as to accumulate wealth over decades. If you would have purchased for $100,000 gold in mid 70ties the holding without doing anything would be worth more than $2 million,” the analyst said. Another factor why the pension fund demanded physical gold was that they understand that paper gold just represents a claim on gold in a highly paper-leveraged gold market, Grass explained. - Russia Today
Ironically very few individuals or institutions are actually selling their physical gold back into the markets, but what is saving the gold paper scheme is the combination of contract holders not demanding widescale delivery, and the public not getting in at these depressed prices due to their price momentum over value mentality.  However this may soon change since the fundamentals for another financial and liquidity crisis are rearing their heads even now, and the amount of contracts the U.S. must offshore to sustain their own paper markets is quickly reaching dire proportions.


Post a Comment