Some good points in the SH article:Selling gold goes against everything Putin stands for. Russia has been buying gold aggressively for years and Putin has never shied away saying why: he wants to dethrone the US dollar as the world reserve currency and believes gold will play a key role in that shift.
Moreover, Russia’s debt load is a very manageable $350 billion, completely payable from its reserves, and this sure ain’t the first time the ruble has collapsed. There is no way Putin would get rattled by a little thing like a free-falling currency.
Shortly after these stories appeared, the Russian Central Bank revealed it bought no less than 18 tonnes of gold in November, bringing Russia’s official gold reserve count to 1,188 tonnes. That count has doubled in four years and is not about to reverse trend.
Turns out the whole Russia-selling-gold rumor stemmed from someone mixing up total reserves and gold reserves. Indeed: Russia still loves gold.
Gold is also selling like hotcakes in India. The country imported 150 tonnes of the yellow metal in November, a 571% increase in imports year-over-year. And the surge happened even though import restrictions were not eased until the beginning of December.
Finally, China continues to buy gold. Wholesale gold demand in China will likely best 2,000 tonnes before the year draws to a close, met by domestic production, recycling, and imports.
On the supply side, now that massive write downs, asset sales, project deferrals, production cutbacks, debt repayments, and management changes have addressed many of the massive mistakes miners made in the previous bull run, focus is shifting to the future…where consensus is solidifying that a gold supply crunch is pending.
Across the sector majors have been cutting back on exploration and development and reducing higher-cost mine output for several years. As a result, output is down and new sources of supply are few and far between.
Since it takes years to permit, fund, and build a new mine, the supply gap will likely last for several years…lifting gold all the while.
There are no guarantees in investing, but when it comes to gold we have massive demand (China, India, and Russia, plus other central banks), geopolitical anxiety, currency questions, and chart-based analyses all suggesting a lasting bottom has been formed and it’s onwards and upwards from here, in the short and long term.