Central Banks Gold Buying Slows Down but is still positive

Central Banks Gold Buying Slows Down but is still positive


Welcome to illuminati silver we tell you the
truth about silver. Today is Thursday 24th November 2016 and we
are looking at Central Bank purchases of gold, its trends and what it means for precious
metal buyers. We are all aware of the statement – ‘don’t
listen to what they say just watch what they do’ or ‘never mind the rhetoric watch
the action.’ Well this certainly applies to the Central Banks purchases of gold.
Those of you who have been involved in our channel know that we generally base our gold
and silver price assessments on fundamentals long term, and political or economic results
short-term. Generally we get it right, but of course no-one has a 100% record and the
post Trump victory reaction though we were ‘on the money’ for the first 24-36 hours,
the situation then reversed as dealers began to think, hold on, Trump is going to stimulate
the economy, this is good for stock-markets and therefore bad for gold and silver.
Very quickly though, appreciating this new reality, we predicted that again short term,
gold prices were going to fall below $1200, certainly before the second week in December
and yes yesterday they closed some $15 below that figure and currently rest at $1185 oz.
Now when we mention gold, generally the same applies to silver. It’s rare for them to
move in opposing directions, though it does happen sometimes. So when gold goes up in
price so does silver and vice versa, it’s just generally the percentages that differ
depending upon what has caused the price movement. Coming back to the topic of this video, one
of the ‘keys’ or ‘statistics’ we look at is the action of Central Banks. Generally
there is no greater insider than the Nation’s Central Bank. What actions they take is of
considerable longer term importance than many other metrics, not least with regards to their
gold purchases. So when we see gold prices fall, and investors
who hold gold fear that perhaps they have made the wrong decision in holding it, they
should pay attention to the fact that those central banks that hold gold are not selling
it. Before the collapse of Lehman Brothers, central banks had been net sellers of gold.
However, a Central Bank Gold Agreement between the European Central Bank (ECB) and 20 other
central banks had been set up stating that the signing central banks do not have any
plans to sell significant amounts of gold. As a whole, the per-year limit is set at 400
tonnes. This agreement has been signed four times since 2000.
Between 2000 and 2007, the central banks sold the amount agreed upon. Since 2008, this amount
has substantially declined. For example, between September 2014 and September 2015, these central
banks sold less than three tonnes of gold. On the other side of the coin, we also have
to look at their gold purchases. In 2012, gold-buying from central banks rose
17% year-over-year to 534.6 tonnes. As the price of gold fell in 2013, central banks
hoarded an additional 409.4 tonnes. By the end of 2013, central banks held approximately
30,500 tonnes of gold, or around one-fifth of all the gold ever mined.
This again increased in 2014 as Central banks around the world purchased 584.9 tonnes of
gold. In 2015, their reserves increased by another
566.7 tonnes and up until the first half of this year, that trend continued. In the first
quarter of 2016, they bought 108.2 tonnes of gold. In the second quarter, they added
another 76.9 tonnes. Now we must be mindful that such purchases
are quite small compared to the debt issued by many of the countries these Central Banks
belong to. However, what it tells us is that despite the anti-gold rhetoric of the FED
and others, in practice these banks believe that it is important to hold some of their
reserves in gold – in other words they are hedging the value of their currency and supporting
to some degree the level of their debt. So as they have been buying, it suggests to us
that either: they believed gold was cheap, or that their debt levels were increasing
and needed to be supported or that their currencies could come under a threat of devaluation,
or a mixture of all 3. From this we can conclude that regardless
of what happens to the gold price short term, holding a certain percentage of our portfolio
in gold is the sensible thing to do. The World Gold Council has recently reported
that in the third quarter of 2016; “Central Bank net purchases fell 56% year-on-year
to 81.7t, from 168t. Year-to-date, central banks have purchased 271.1t, lagging the 407.7t
for the same period in 2015. Nonetheless, gold remains a significant – and gradually
rising – part of total central bank reserves, currently accounting for more than 13%.”
Now whilst we are confident from our analysis that gold and silver prices have further to
fall, it makes sense to utilise any such reduction in price as an opportunity to ‘top up’
any deficit you may have in your portfolio. This does not mean ‘fill the cart’ or
‘fill your boots’ but just take a measured approach. Please try and remember that you
are buying for the long term, otherwise you may as well join the other speculators and
trade the paper. The one thing we certainly appreciate and that is, if its good enough
for the Central Banks, then it should be good enough for us.
For those who are celebrating today Happy Thanksgiving.
We hope you have found this video interesting and informative and if so, please give it
a thumb up and share it on twitter. Also kindly visit our website at illuminatisilver.com
and if you haven’t already done so please subscribe as a free member for regular email
updates and offers. Our Facebook page which is updated daily can be found at facebook.com/illuminatisilver Disclaimer: Illuminati Silver owners come from a background
of Banking, International Wealth Management and Economics. Having now retired from these
worlds we are not qualified to give investment advice. Therefore, this and other productions
must not be deemed to be giving such advice and merely represent the personal views of
its owners.

19 Comments

  1. if you buy gold do you hold on to it and sell it in a few years when the price has gone up? or do you buy it and hold onto it for 15yrs plus and keep aquiring gold over time? I'm new to this so my question might seem like a rookie question.

  2. Good evening .. what will happen to price of gold if the American president got an accident?! or certain catastrophe happened in America led to presidential unexpected crisis .. kindly can I hear your feedback .. Will it pop up or shout price down ..

  3. Why do central banks even bother to buy cold? It has no value in relation to fiat currency. To me, A country's wealth is tied to GDP and trade surplus. While I agree with you on one level, on another I'm suffering a serious disconnect. 13% gold seems like an affectation, an unnecessary burden. But, as always, food for thought. Thanks!

  4. fascinating statistics. worth doing some comparative analysis with the currency and stock markets for sure.. the 2000 period seems to show a similar stall in selling as it does over 2015 and 2016 buying..well at first glance anyways. as always..interesting and informative..thumbs up

  5. Happy Thanksgiving (even though today is just a normal day for you English). It was reported that Russia's purchases of gold the last 2 months have been the highest in a "millennium". So, if the Russians are buying on this price take-down by Wall Street traders (and the obvious players too lol), can't we assume that the Chinese just backed up the Brinks truck as well?
    Finally, I read that when Chair Yellen's time is up next January, Trump will replace her, and that's when we will see a huge fiscal stimulus, accompanied by negative interest rates by the Fed. Trump said he is the "king of debt". It's a well known fact that Yellen is a democrat, and she has a huge dislike for Trump. She will not be accommodative of his policies. So Trump will just wait her out.

  6. Thanks for all your info ! ………..Im buying 1180 gold cautiously ,waiting to see the downward pressure ……..holding reserves ,just in case. Happy Thanksgiving! To All the crew at illuminate silver !

  7. Central Banks Gold Buying Slows Down but is still positive true!! but watch what happens in the next 6 months russia just bought a bunch china will be adding big time here on this dip!! great video!!

  8. Sorry I missed this yesterday… was with the inlaws celebrating the holiday. So I currently believe I had a solid lock that PM's have more room to drop in price. How do I "know" this? The seller of choice for me is currently selling gold at less then about 2% premuim (~$18) . There is only ONE way a seller that normally demand 6% to 12%… offers 2%… they can get more for less.
    Provident metals 1oz is currently $1203. Happy hunting all!

  9. It seems like there is a lot of gold and silver buying going on around the world. Is there a possibility we could see a temporary shortage some time in the future… With the dollar on a sugar high, it only seems like gold and silver can only go up from here…

  10. The Obvious is very obvious; central banks are always ahead of the game; but with gold you have a redistribution of wealth and they offer nothing but the paper dollar and bureaucracy. The problem lies in how much gold they've bought using worthless dollars we agreed they can use to purchase with…because we CHOOSE to use them too. Those with skills and knowledge could be the new kings and the people would likely rejoice with fairness and equal measures

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