Weak to strong hands – Pt1

Most of the headlines over the price drop in gold this year have talked of the large outflows from ETF’s, and to a lesser extent the COMEX as well.  Far less has been written about where all this gold is going (every sale must have a buyer!).  Generally those who trade in ETF’s are short term speculative traders, as with commercial traders using the COMEX warehouse.  The outflows from these depositories has been staggering.  COMEX has gone from a 3 year average of over 11m Oz to just over 7m Oz, and ETF’s from around 83m Oz to 63m Oz.  With a lot of this going to eastern central banks and long term (and predominately eastern) private holders of physical metal, when the squeeze comes there will be far less traded gold and an inevitable amplification of price rises.