Articles & Blogs - Gold Commentary

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It goes without saying that the price of gold is under continual assault from the Manipulators (generally meaning the banksters' cabal, along with assorted government and regulatory puppets). It must also be noted that gold is also under continual assault from the propaganda machine (centered in the U.S.) which is under the firm control of the same nefarious actors.

That propaganda has centered on two key “fronts” in recent months. The first source of anti-gold propaganda is talk of “the IMF selling gold”. To be blunt, if IMF gold was sold as often as the propagandists talk about selling it, the IMF would have sold its last ounce many years ago.

For well over a year, the propagandists have been “pumping” a single announcement: that the IMF had “approved” the sale of roughly 400 tons of its bullion holdings. In fact, nothing has been “approved” - since final (and real) approval must come from an act of the U.S. Congress. Currently, the sleazy members of that corrupt body are much too busy looting the U.S. Treasury – to fill up bankster vaults with taxpayer dollars.

The sale of IMF gold has never even been put on their agenda, and there is NO indication it ever will. End of story. A new story (which the Manipulators have been delighted to circulate) is that China and India are “proposing” the sale of all IMF gold – supposedly to provide funding to help the IMF reduce poverty.

It is hard to find one iota of validity in this rumor. If the IMF can't even manage to sell off a tiny portion of its gold, it obviously will not dump it all in “one fell swoop”.

The second branch of propaganda intended to discourage and misinform “gold bugs” is that slipping jewelry demand will prevent any significant rise in the price of gold. This is more nonsense.

It is true that jewelry represents the single largest component in gold demand (for the moment), and that demand was slightly lower last year: down by 6% (measured in tonnage) or 4% (measured by dollar-amounts). Contrast that with the second biggest component: investment demand.

Total investment demand was up more than 180% last year, measured by tonnages or dollar amounts. Much MORE stunning was that “retail investment demand” increased by roughly 400% !!

With investment demand already equal to 80% of jewelry demand by the end of 2008, investment demand is set to SURPASS jewelry demand this year – with the strong likelihood that investment demand will “rule” gold demand permanently. Even so, it is NOT a matter of jewelry demand collapsing. The fact that we saw only a 6% decline in demand last year, despite the global economic carnage, proves that point.

Jewelry demand is relatively inelastic. Can anyone picture a man about to propose marriage saying to his fiance, “My dear, gold jewelry is simply too expensive, so how about marrying me without an engagement ring?” Obviously, this gentleman would never make that mistake again – as he hunted for a new fiance.