The Golden Truth: More On Vietnamese Gold Demand

Monday, November 16, 2009

More On Vietnamese Gold Demand

The comment below is sourced from JB's daily commentary on gold trading in India/Asia/London/NYC, posted every night in Midas at http://www.lemetropolecafe.com/:

"Reuters amiably published two Vietnam golds today again. In the morning, local gold stood at a $44.04 premium to world gold of $1,123.30 and in the afternoon $32.21/$1,129.76 (Friday PM $27.31/$1,102.80). Clearly gold hunger in Vietnam is real and actual imports will be needed to assuage it."

I wanted to highlight this because most people are not aware that Vietnam is one of the more substantial gold importers in the world. Note the high import premiums described above. I can not recall a period of time when the premiums in Vietnam have persisted like this for several days. This is indicative of both voracious demand for physical bullion globally AND the fact that the physical market is getting very tight. We have now had several reports and anectdotal indications of bullion shortatages on the LME (that is, bullion which meets LBMA commercial delivery standards). Moreover, it now looks like India will take the remaining IMF gold for sale if the other Central Banks to whom the gold has been offered do not take it. I don't think anyone figured on the IMF gold clearing the market in this short of time period. To be sure, the gold market bears certainly expected that the IMF gold sales announcement would depress market price and they severely underestimated Central Bank demand for gold.

This is all very bad news for the large banks that are short gold in paper form. Got physical custody of YOUR gold?

3 comments:

BillMonday, 16 November, 2009
If the Vietnamese mainly trade in gold, it sounds probable they'd go on a gold standard. Since their currency is called the "dong" would that mean they would then have a "hard dong?"

It must be quite a site to walk around and see everyone flashing their hard dongs.
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MontyHighMonday, 16 November, 2009
Might be worth investigating the Vietnamese government policies that make importing gold such an attractive thing and see if any other major economies are trending in that direction. If there are major economies trending in that direction it could mean a major increase in the demand (and thus price) of gold.
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Bron SucheckiMonday, 16 November, 2009
Small point - LME does not trade gold, gold is only traded in London on an over-the-counter basis.
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

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Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

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http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

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