Gold Bugs: We Told You So...

Source:

...Gold has been removed from U.S. Treasury vaults and placed on deposit, presumably in the couple of bullion banks the Treasury has selected to assist with its gold price-capping efforts. Gold placed on deposit gets loaned out by these bullion banks, and then sold into the spot market to try capping the gold price...

Gold froths, but the gold bugs think they have new reason to be confident...

Throughout gold's post-2000 bull market, the much-maligned gold bug services, scarred by 20 years of losses, have been confident but cautious...

Reason for rejoicing: The discovery by James Turk of the Freemarket Gold & Money Report that, as Turk puts it: "the U.S. Treasury quietly made a subtle change to its weekly reports of the U.S. International Reserve Position, which includes the U.S. Gold Reserve. This change was first made May 14 ... It says the U.S. Gold Reserve is 261.499 million ounces and importantly, that the gold is now reported 'INCLUDING GOLD DEPOSITS AND, IF APPROPRIATE, GOLD SWAPPED' (emphasis added).

"This description provides clear evidence that the U.S. Gold Reserve is in play. Gold has been removed from U.S. Treasury vaults and placed on deposit, presumably in the couple of bullion banks the Treasury has selected to assist with its gold price-capping efforts. Gold placed on deposit gets loaned out by these bullion banks, and then sold into the spot market to try capping the gold price."...

It may seem like an arcane point. But I remember when the idea that central banks were systematically selling gold at all was dismissed as crankishness. Yet it's now universally acknowledged.

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