Tuesday, April 28, 2015

Gold surges: World's 'biggest pawnbroker' makes deal

Even though analysts assess the gold swap from Venezuela to Citicorp as the reason for gold's recent surge, I believe it will be bearish mid-term for gold.  Now Citi has the physical gold to rehypothecate to manipulate prices lower via the paper COMEX exchange.  This should give accumulators more opportunities to buy the dip in gold prices.  Have some dry powder.

As an aside, the late Hugo Chavez must be rolling over in his grave.  He worked hard to become the first leader to repatriate his country's sovereign gold, and now his successors are pawning it away.

On a more insidious note, bankrupt oil-exporting countries have been forced to sell their family jewels at discounted prices, whether these assets are drilling rigs or gold bullion.  There is destructive price suppression in the energy markets as well as the precious metals mining markets.  Extraction companies and state governments are either going out of business or panic selling their treasured assets in order to keep the lights on.


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