Gold Price Warning Signals: Top Sovereign Gold Buyer Starts Selling

Wed, Apr 4, 2012

Sovereign Gold Buyer Starts Selling

A major investor in gold may be signaling a sharp shift in demand for gold from it’s largest buyer over the last decades, central banks.

Gold Price Warning: Top Sovereign Gold Buyer Starts Selling

Russia’s central bank recently announced it was selling gold. Gold Buyer Starts Selling gold

The Financial Times reported Russia made its first sale of gold in five years.

The news, passed over by the mainstream financial press, could signal more headwinds ahead for the Price Of Gold.

The reason…Russia has been the Best Gold Investor among all sovereign buyers.

The following chart form World Gold Council shows Russia’s astute gold market timing and its steadily growing appetite for physical gold:

The chart shows Russia may have been selling gold at the bottom. It, however, changed its buying practice and started buying aggressively.

Russia started buying gold in 2006 and didn’t stop…until now.

In 2008 Russia bought gold directly from gold miners.

In 2009 Russia announced it will buy an additional 30 tonnes of gold.

Sovereign Gold Buyer Starts Selling

Then in early 2011 Russia entered the market for an additional 100 tonnes of gold.

The whole process took Russia’s gold reserves from 387 tonnes of gold to 833 tonnes of gold.

The recent news could be a major turn for gold.

Although Russia sold $200 million worth of gold in February, the total sale was for a mere 0.00456 of its reserves.

If the trend continues and other central banks jump on board, this could be another major headwind for gold.

Which isn’t good in the short-term. But over the long run for gold bulls like us, it will create some great buying opportunities in the months and years ahead.

Contrarian Insights: Gold Investing Stratagies

A major investor in gold may be signaling a sharp shift in demand for gold from it’s largest buyer over the last decades, central banks.

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Gold Buyer Starts Selling

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