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LAWRIE WILLIAMS: GLD's been buying far more gold than Russia and China combined

GLD buying far more gold than Russia and China combined

Totally inaccurate media headlines never cease to amaze me with their often apparent ignorance of the real situation.  We have suddenly had a succession of media reports from outlets telling us that Russia is now the world’s top gold buyer.  These are all presumably based on an article which appeared on the Russia Today website a couple of days ago with the headline Russia becomes world’s top gold buyer.  To be fair to RT, the article did say that the figures related to central bank gold purchases, although the headline did not, and the article certainly did not take into account that the Russian central bank had been buying more gold on an average month-by-month basis than China , the other major central bank gold buyer, for some time.

Thus, in terms of central bank purchases the Russian central bank is perhaps indeed the biggest gold buyer among its peers– and has been for some little time.  It’s certainly not news.  Month in month out Russia has frequently bought more gold than the second biggest official buyer – China – ever since the latter started releasing its monthly official central bank purchasing statistics in the middle of last year. Between them these two nations’ purchases account for the vast bulk of all officially reported central bank purchases over the past nine months – probably for far longer as China has only been reporting its monthly figures since July last year.

OK - whether the Chinese statistics are indeed an accurate representation of the real amount of gold moving into government hands remains open to question.  Many believe that these official statistics substantially understate the true level of Chinese gold purchases.  But this is purely speculative and thus irrelevant in the context of this article.

But in reality the World’s biggest gold purchaser over the past three months is neither Russia nor China – at least in terms of officially released data.  The SPDR Gold Shares ETF (GLD) in the U.S.A. has added far more gold into its vaults than either of these gold buying nations combined.  So far this year it has added 178 tonnes of gold.  That’s around 59 tonnes a month.  Far more than either China or Russia have officially taken into their reserves between them over the same period!  Indeed on a monthly basis GLD has probably added well over double the amount of gold flowing into all central banks as officially reported.

Lies, damn lies and statistics!  Take media headlines with a very big pinch of salt.

30 Mar 2016 | Categories: Gold, China, Russia

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