Shocking News - 7.1 Tons of Physical Gold Purchased by HSBC and Goldman Sachs
Last week, i.e. on 6th August, Goldman Sachs and HSBC purchased 7.1 metric tons of physical gold bars for their own use. This piece of news is definitely shocking as this humongous amount of gold was not in electronic paper claim form but rather in its physical, tangible form. Out of the total 7.1 tons of physical gold, 3.2 tons was obtained by Goldman Sachs alone. The firm however, advises its clients not to follow its footsteps. Jeffrey Currie of Goldman Sachs states that the long term outlook for this yellow precious metal is not very promising. Currie also points out that the commodity market, which includes gold, is currently a structural bear one since individual commodity stores are banking on one another to create a negative feedback loop.
Irrespective of what the paper-gold market is looking like currently, there's no denying the fact that the physical market is doing quite good currently. It is estimated that the demand would exceed the supplies by about 1350 tons during this year. In 2015 the figure is expected to increase even more! However, efforts to set up paper market for the purpose of getting cheap gold prices would definitely be prevalent. It does not matter how high the demand for physical gold is and how low its supplies are, people would turn to COMEX, the 'supplier of last resort’ in order to fulfil their requirements for physical gold.
The strategists at HSBC also stated that the market is bearish because of the weak demand for gold from China and India and also the low global inflationary pressure. Shortly after this statement was released, statistics show that there has been an increase in percentage of gold bars imports to India during April and May, i.e. 61% to be precise. A lot of people have criticized HSBC for making this statement because it is one of the biggest players in the Indian import market, therefore people pointed out that this was an intentional misstatement by HSBC strategists.
It is also rumored that HSBC purchased 3.9 tons of gold bars at rock bottom gold prices from COMEX. Just like in case of Goldman Sachs, this huge amount of gold was not meant for the customers but rather the house account of the bank. Thus, despite of releasing statements deterring customers from buying gold, the two reputed organizations are purchasing large quantities of this seemingly 'bad’ investment for themselves!
This sudden long-term investment made by Goldman Sachs and HSBC have triggered rumors that there is a 'Big Long’ on the way, which is just the opposite of the 'Big Short’ taken by Goldman Sachs in 2006-2007 period. Just as how the real estate values collapsed all over the world suddenly during this period, one can anticipate a sudden global collapse of the bond bubble. Thus, people are under the impression that the banks are definitely anticipating something, they just are not willing to reveal the same to their customers or the world! Thus, investors are not following what the banks are saying, but rather what they are doing!
Last week, i.e. on 6th August, Goldman Sachs and HSBC purchased 7.1 metric tons of physical gold bars for their own use. This piece of news is definitely shocking as this humongous amount of gold was not in electronic paper claim form but rather in its physical, tangible form. Out of the total 7.1 tons of physical gold, 3.2 tons was obtained by Goldman Sachs alone. The firm however, advises its clients not to follow its footsteps. Jeffrey Currie of Goldman Sachs states that the long term outlook for this yellow precious metal is not very promising. Currie also points out that the commodity market, which includes gold, is currently a structural bear one since individual commodity stores are banking on one another to create a negative feedback loop.
Irrespective of what the paper-gold market is looking like currently, there's no denying the fact that the physical market is doing quite good currently. It is estimated that the demand would exceed the supplies by about 1350 tons during this year. In 2015 the figure is expected to increase even more! However, efforts to set up paper market for the purpose of getting cheap gold prices would definitely be prevalent. It does not matter how high the demand for physical gold is and how low its supplies are, people would turn to COMEX, the 'supplier of last resort’ in order to fulfil their requirements for physical gold.
The strategists at HSBC also stated that the market is bearish because of the weak demand for gold from China and India and also the low global inflationary pressure. Shortly after this statement was released, statistics show that there has been an increase in percentage of gold bars imports to India during April and May, i.e. 61% to be precise. A lot of people have criticized HSBC for making this statement because it is one of the biggest players in the Indian import market, therefore people pointed out that this was an intentional misstatement by HSBC strategists.
It is also rumored that HSBC purchased 3.9 tons of gold bars at rock bottom gold prices from COMEX. Just like in case of Goldman Sachs, this huge amount of gold was not meant for the customers but rather the house account of the bank. Thus, despite of releasing statements deterring customers from buying gold, the two reputed organizations are purchasing large quantities of this seemingly 'bad’ investment for themselves!
This sudden long-term investment made by Goldman Sachs and HSBC have triggered rumors that there is a 'Big Long’ on the way, which is just the opposite of the 'Big Short’ taken by Goldman Sachs in 2006-2007 period. Just as how the real estate values collapsed all over the world suddenly during this period, one can anticipate a sudden global collapse of the bond bubble. Thus, people are under the impression that the banks are definitely anticipating something, they just are not willing to reveal the same to their customers or the world! Thus, investors are not following what the banks are saying, but rather what they are doing!
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