Russia’s second largest bank, VTB Bank, announced a deal to supply Russia with 12-15 tonnes of gold in the next 12 months. The amount supplied will increase over time and eventually reach 80-100 tonnes annually: Reuters Link.
Perhaps the most interesting aspect of this will be to see if the World Gold Council acknowledges this gold as “Chinese imports.” The WGC and other entities which purport to track global gold “consumption” have been reporting declining demand for gold in China, based on declining imports from Hong Kong. Of course, these “official” sources completely ignore the fact that China imports an unknown amount of gold through the ports of Beijing and Shanghai…move along, nothing to see there…
The unarguable scheme by western Central Banks to suppress the price of gold with paper gold is contingent on the ability to deliver actual physical gold into China and India. In this blog’s educated opinion, the supply of gold available to make this happen is running low: Central Bank gold stock plus investor custodial gold that has been hypothecated.
This report out of Russia supports the thesis that China’s Central Bank is accumulating, and has accumulated, significantly more gold than it is willing to disclose. As reported in the South China Morning Post when China announced opening Beijing, after also opening Shanghai, for gold imports:
Opening the capital as the third shipment point will help the PBOC keep purchases discreet as it is believed to be adding to its bullion reserves…The mainland has begun allowing gold imports through the capital, sources familiar with the matter said, in a move that would help keep purchases by the world’s top bullion buyer discreet at a time when it might be boosting official reserves. South China Morning News
This is likely why the Fed/ECB/BOE are collectively having a difficult time pushing the price of gold lower after its big move starting in mid-December. At some point, gold is going launch out its current lateral consolidation and move much higher by the end of the year. Especially once the market fully understands that the ONLY policy choice left for the Fed is to keep printing money at an accelerating rate or risk complete financial collapse.