Central Banks Buy Gold Bullion Hand Over Fist, Most Bought Since 1967 - Nathan McDonald (14/02/2019)

February 14, 2019

Cryptocurrencies have been crushed, the stock market looks poised for a slowdown and the world stands on the edge of a cliff, as geopolitical tensions flare across the globe, waiting for a spark to ignite the flames.

The smart money knows it, and they are starting to move. This includes Central Bankers, which are buying the king of metals, gold bullion, hand over fist.

As I stated at the start of this year, I believe 2019 will see significant accumulation in the precious metals market, which will finally break out of the horrible sideways trading pattern we have been in for years.

As many of you know, gold has been stuck in an abysmal trading pattern, moving slightly above $1300 only to be crushed back down toward the $1100 mark.

This comes in spite of the fact that we now face the most geopolitical uncertainty we have seen in decades.

However, not everyone has been unaware of these dangers.

Central Banks spent 2018 accumulating precious metals in a monumental way, increasing their holdings by the most in one year since 1967. Quietly accumulating while the rest of the financial world happily ignores the alarm bells going off all around them.

Recently, the World Gold Council stated that the world consumed 4,345.1 tonnes of gold throughout 2018, up from 4,159.9 tonnes in 2017.

The chief driver of this move higher was Central Banks, which bought 651.5 tonnes throughout 2018, a staggering 74 percent increase over 2017, and as previously stated, the largest increase since 1967.

Sadly, Western Central Bankers are still asleep at the wheel and were not the main contributors to this increase.

As I have been reporting on for years, countries such as Russia, India, China, Poland, Kazakhstan and Turkey were the main purchasers of gold bullion throughout 2018.

As the vaults in the West continue to be drained, the vaults in the East continue to fill to the brim with real, honest money that is unlikely to ever return.

These countries are happily buying gold bullion in vast quantities, diversifying out of their USD holdings as they do so.

Gold net accumulators know that the winds of change are coming and precious metals are likely to once again play a vital role in the future, as the dominance of the U.S. dollar continues to erode.

I believe both Russia and China are more aware of this than any others, and are actively planning the day in the future in which one of them, most likely China, can replace the USD as the reserve currency of the world.

Gold will play a vital role, and this is just one of the many reasons why they are so eager to accumulate precious metals.

I strongly believe this trend is just the beginning and we haven't seen anything yet.

A major crash in the global economy lays just over the horizon, and it is only a matter of time before precious metals are once again called upon to play the vital protection role they have always filled throughout history.

Global supply of gold is increasing at a snail’s pace, increasing by only 1% last year.

If retail investors finally wake up and begin to move into precious metals, as they did in the last bull market, then we will have an explosive scenario on our hands.

Gold and silver bullion vaults will be drained at a staggering pace, and a runaway move higher in prices will finally break the shackles that have kept it contained for years.

Smart Central Bankers know this, and it is exactly why they are making their move before the masses wake up, accumulating gold bullion while it is on sale, before the inevitable move higher.