A Brief Note on CENTRAL BANK GOLD

Gold is a now seen as a bargain by some central-bank reserve managers who are buying more at low price levels — but don’t expect central-bank gold demand to quickly send the price sharply higher.

Russia and China have very likely been scale-down buyers in recent days. Both have been buying with some regularity for the past few years. It’s now in their best interest to acquire as much as they can at low price levels but avoiding quantities large enough to send prices quickly higher.

Buying to hold for and bequeath to future generations — and, importantly, to advance their own strategic geopolitical objectives — none of the metal acquired by these two central banks will come back to the market just because sentiment turns positive and investors want more, as they sooner or later surely will.

I’ll have more to say about Central Bank gold policies in future posts.