Sorry, No Gold Today…We Sent It to China

The central banks' gold is likely gone, and the bullion banks that sold it have no realistic chance of getting it back,' Eric Sprott tells us.

He also says that these 'bullion bank' intermediaries are probably turning around and selling their gold to China.

China, by the way, is the mostly likely catalyst to set off the 'zero hour' scenario we told you about yesterday.

We've chronicled China's ongoing gold grab here at Agora Financial - going all the way back to April 24, 2009, when the People's Bank of China announced its gold reserves had grown to 1,054 tonnes - up from 600 in 2003. And that's the last official word.

Then there's private-sector demand in China. The government is equally opaque on this score. But we do get regular figures on Chinese imports via Hong Kong. Last year, they totaled a staggering 834.5 tonnes. And remember, that's in a market that produces only 3,700 tonnes a year!
Couple those imports with Chinese mine production - and the total amount of gold known to be inside China has doubled in a mere three years.

Then there are the voluminous statements by Chinese public officials best taken at face value...

• China's gold reserve is 'too small', says the Department of International Economic Affairs of Ministry
• 'No asset is safe now,' says the head of the People's Bank of China's research bureau. 'The only choice to hedge risks is to hold hard currency - gold.'
• And maybe most telling for our purposes: 'The U.S. and Europe have always suppressed the rising price of gold,' according to a commentary in the Shijie Xinwenbao newspaper, duly noted by U.S. diplomats in cables exposed by WikiLeaks.  (more)

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