Where are the nations buying the gold from?

tneig

Almost daily there is some article or mention of China or some other country buying gold.

I assume its bullion and assume its in bulk ($$$$$$) buys, so I wonder where its all physically coming from.

Are they actually buying the real stuff?
Or are they foolish enough to be buying the paper ownership transfer stuff....

roadrunner

Some of the nations buying are indeed buying paper promises on gold stored far away from them. When Mexico bought 100 tonnes of gold a few years back that's
what they got, an IOU. China and Russia are buying physical gold to bring to the homeland. The gold is coming from the Comex, LBMA, other central banks and bullion banks,
gold mining companies where they have long term contracts in play, and maybe even from $Cash4gold operations set up around the world. China hasn't reported any increases
in gold inventory in years, and won't anytime soon. They've probably already at least doubled their official 1,054 tonnes. China is the world's leading gold mining nation with
360 tonnes mind per year. I would suspect nearly all of that goes to the Chinese central bank. China/Hong Kong import hundreds of tonnes of gold per year from sources all
around the world. Joe Six Pack's wedding bands eventually find their way to China, India, and Russia. China also has contracts with Australian and African mining companies. Next
time we get an update on China's gold holdings, it will be 3,000 to 5,000 tonnes. China is buying the real stuff. Some of the smaller nations may be getting just paper promises.
This is why a number of nations are now considering repatriating their gold from NY and London vaults.

LochNESS

Anyone find it ironic that the world's leading exporter of counterfeit coins / bullion coins is also the world's leading importer of the real stuff?

roadrunner

<< <i>Anyone find it ironic that the world's leading exporter of counterfeit coins / bullion coins is also the world's leading importer of the real stuff? >>



Don't really see the irony. They are the world's most populous nation. Maybe the most industrious one as well on an individual basis.

China, being a nation that truly values gold and silver coins, I'm not surprised that the notion of plentiful fake silver and gold coins would also come from there.
Such a thing was certainly not going to happen in the USA where silver and gold coins are basically shunned by >95% of the population. China not having particularly
tight or uniformly enforced laws and plenty of graft certainly helps. There's no other large, industrialized nation in the world that could pull it off....not USA, Russia,
Canada, UK, Australia, etc.

tneig

So yeah, the nations buying the virtual gold now are just playing into the current temporary system, not really securing their long term with the real stuff.
You would think they would know this stuff?

LochNESS

Wonder how much actual gold is left in Fort Knox ... I'm speaking more of the idea then the actual building ...