London to COMEX gold movement driven by tariff fears and geopolitical shifts, with banks reshuffling reserves into the US for potential future use or resale in Asia.
JP Morgan and other bullion banks engage in arbitrage by buying gold in London, shorting futures, and making delivery on COMEX contracts, preferring kilobars for convenience in the US and Asia.
China actively accumulating 50-70 tons of gold per month (not officially reported 5 tons) to diversify away from dollar risk post-Ukraine war and reduce US sanctions vulnerability.
Lack of transparency in US gold audits, particularly at Fort Knox, with compartments reopened multiple times without proper justification, raising questions about audit integrity.
A proper audit of the 8,000 tons of gold at Fort Knox would take years, as the small vault can only accommodate a few people at a time to inspect thousands of bars compartment by compartment.
US values its gold at $42/oz to demonetize it, but revaluing to current market price of $2,600/oz could free up $700-800 billion for spending or debt relief, though it would be highly inflationary.
China developing alternative payment systems like BRICS mBridge and digital yuan to challenge dollar dominance, enabling trade with surplus countries and converting excess yuan to gold at the Shanghai International Gold Exchange.
The LBMA states that buying unallocated gold makes you an unsecured creditor, meaning there’s no fraud if multiple people own the same bar, as the paper gold market operates on this basis.
In 2011, Ron Paul learned from the OIG that 450 tons of gold at the Federal Reserve had never been audited since 1974-75, raising concerns about audit integrity.
The US Treasury holds gold certificates valued at $42 per ounce, exchanged for physical gold from the Fed in 1934, but the Fed itself doesn’t own any gold today.
China’s gold accumulation aims to reduce reliance on the dollar for trade and reserves, as the US is sometimes labeled the consumer of last resort, critical for export-driven economies like China.
The S&P 500 and Nasdaq are showing weakness, with the S&P 500 breaking below its January 13th low and the Nasdaq well below that level, indicating a bearish short-term trend.
The FOMO indicator, based on New York Stock Exchange volume, is spiking as uneducated emotional traders chase price, signaling a potential short-term top and market bounce.
Gold is surging in a chaotic market environment, targeting $2750-$2800 in the long-term chart, with potential to reach $3,500 in the short term as fearful investors buy in.
The GDX mining index has a strong chart pattern with a 38% retracement pullback from its high, finding support at the 50% retracement level, potentially setting up for a stronger impulse move up.
The energy sector is diverging from oil prices, with stocks rising while oil falls, suggesting a potential sharp decline in oil could lead to a huge selloff in energy stocks.
Magnificent 7 and biotech stocks, including Nvidia, are leading the Nasdaq’s decline, with the Magnificent 7 ETF breaking down from a bull flag and becoming oversold.
The stock market is primed for an oversold bounce and a major top, potentially leading to a prime reversal in gold miners and a rally in the stock market for the next week or so.
An inverse energy sector ETF with 2X leverage could spike if oil breaks down, but requires smaller position sizes and constant monitoring due to high volatility.
A run on the paper gold market could cause gold prices to quadruple overnight due to insufficient physical gold backing paper transactions.
The US Treasury leases gold from Fort Knox to banks, creating a chain of “unallocated gold sales” where multiple parties claim ownership of the same physical gold.
Central banks have been net buyers of gold since 2010, with Russia increasing its reserves fivefold from 600 to 3,000 tons.
Russia’s gold buying strategy has resulted in a $100 billion net profit due to price increases caused by US actions in Ukraine.
Gold’s value remains constant; it’s the dollar that’s depreciating, now requiring $2,900 to buy an ounce compared to $700 in the past.
Russia and China settle their trade balances using gold, demonstrating its feasibility as a practical currency for their needs.
Zelensky’s strategy involves seeking US security guarantees and troops in Ukraine, potentially leading to a World War III scenario.
Futures exchanges can halt physical gold delivery if too many longs request delivery, preventing a gold run but potentially causing a crisis in the physical market.
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