Yesterday, I published my post, 'Is 2023 the year silver finally breaches its 1980 $50 high?' in which I noted that the World Gold Council had estimated that 31 tonnes of gold were purchased by central banks including those of Kazakhstan, China and Turkey in January. Within hours of publishing my post, Kitco News published an article in which the WGC revised its January numbers after it was discovered that Singapore's central bank added a jaw dropping 45 tonnes of gold, its first gold purchase since June, 2021 and bringing their total gold reserves to 198.4 tonnes.
Now, the WGC estimates that 77 tonnes of gold in total were purchased by these central banks in the first month of 2023. In the last quarter of 2022, a record 400 tonnes of gold were purchased by central banks around the world, led by China and Turkey. In total, central banks purchased a record setting 1,136 tonnes of gold in 2022.
Are we on track for another record setting year for gold purchasing by central banks? Gold is supposed to be a barbarous relic! It was the central bankers themselves that pushed this narrative for several decades, at least 50 years, since gold was decoupled from the USD on August 15, 1971.
What are they up to? They claim to be independent of each other yet they all act in lock step. Why are they buying such huge amounts of gold all of a sudden, so huge in fact that the numbers are record setting.
Now, tiny little Singapore has 198.4 tonnes more gold than the Bank of Canada. That's right, the BoC sold off all their gold at measly prices and in early 2016, were down to zero ounces. As a Canadian, this scares me a bit. Of the G7 countries, Canada is the only one with less than 100 tonnes. Since the BoC has no gold at all, it ranks at 100th place, after 99th place Albania!
Mind you, we do have a lot of gold here in Canada. The problem is, it's still in the ground. According to the WGC, Canada stands in 4th place (192.9 tonnes in 2021)as biggest producer of gold, with China, Russian Federation and Australia in the top three.
I'm going to put my foot in my mouth and make a silly prediction and that is to expect news one day soon that the Bank of Canada will have made a surprise gold purchase to add to their presently non-existent reserves. Once they do so, it'll probably become a monthly occurrence until they catch up with their other central banking buddies.
Canada used to have a healthy 1,000 tonne hoard back in the 1960s and little by little, it was sold off until there was nothing left. It's a similar story to that of the Bank of England, which under Prime Minister Gordon Brown, sold more than half the bank's gold holdings in the early 2000s when the market hit bottom and just before gold began its meteoric rise to almost $2000 in 2011. The gold was sold for less than $300 per ounce. They are ridiculed about that to this day.
Something's going on which means something's going to happen. My guess is, they are getting ready to reprice gold. I think it's inevitable. Even the gold held at Fort Knox is still priced in their books at just $42.22 per ounce. That alone tells me the U.S. Gov has the option to reprice their gold holdings closer to today's market value to infuse some extra cash into their treasury. Having hit their debt ceiling with still no resolve, I won't be surprised if they try this move to keep things going, albeit for a few more months only, as it is still not enough.
I expect fireworks this summer. I hope it's a beautiful, clear evening when it occurs because I really enjoy fireworks, don't you? Consider investing in precious metals (see OwnX link below). Central bankers are jumping over each other to scoop up as much gold as there is available, but what about silver?
Did you know there was a 194 million ounce silver deficit in 2022? This deficit has been carried over into 2023. I expect the deficit to grow even more this year. For us poor folks, silver is the way to go and the way things are going, there's clearly not enough silver for everyone. Somebody's going to get left behind in the dust. I have a bit of silver. I am ready!
Are you ready?
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