This is the last vestiges of the tail wagging the dog, though, as each time they do this physical buyers take the spot price. They (then) step up into the (London) fix demanding to convert these paper purchases into real bullion. Speaking of London, Eric, the physical market is where the rubber actually meets the road.
Converting so much paper gold into bullion is stressing out (the existing) between 90 – 1 and 100 – 1 leverage of available supplies. This was never, ever anticipated to happen (by the bullion banks or the Fed). The bulk of all LBMA bank accounts are held in unallocated form. It’s amazing how few institutions even realize this.
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