by Julian D. W. Phillips, Gold Seek:
The prime cause of the gold price falling so much in the last few months, has been the over 100 tonnes of sales from the SPDR gold Exchange Traded Fund, an amount that triggered a considerable amount of stop loss selling.
While central banks have been buying, their way of buying is to target available volumes of gold sitting in the market. Dealers with gold contact central banks and make an offer, which is accepted. Central banks don’t chase prices and find their stock as prices fall. This takes gold off the market leaving smaller amounts for buyers once the gold price turns up.
A negative fundamental that has surprised many is the fall off in Indian demand as the government there raised duties on gold and have required “know your client” documentation on large retail purchases of gold.
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