There Is A Tremendous Shortage Of Physical Gold Out There

There is a tremendous shortage of physical gold.  Keith Barron, who consults with major companies around the world and is responsible for one of the largest gold discoveries in the last quarter century, also spoke about what is really taking place behind the scenes during this gold raid.  Below is what Barron had to say in this powerful interview.

Barron:  “The gold price got hammered, down over $30 today.  Quite often the powers that be decide they are going to take it down on Friday.  The excuse this time is that Non-Farm Payrolls are up, so the job situation is looking better in the US.

We seem to be rotating from one bearish gold news story in the mainstream media to another, with comments from the Fed and people asking, is there going to be continued QE?  There is all of this noise on almost a half hourly basis which is moving the gold market.  But demand for physical gold is still incredibly strong and when gold plunges $32 in one day, a lot of people do view this as a buying opportunity.  I certainly do.

When gold was taken down roughly $200 on a Friday and Monday, and we saw massive movements of gold out of GLD, the interpretation by CNBC and the usual suspects was that everyone was getting out of gold….

People even went so far as to say the bubble had burst.

There were redemptions going on in GLD as early as the second week of January.  The reason is very interesting.  What was really taking place was the bullion banks were taking gold out of GLD to meet the massive demand out of Asia.  This was happening as the premiums in Asia for gold were sky high, up to $50 an ounce.

So bullion banks were raiding the GLD ETF for gold and pocketing up to $50 on the spread, just for shipping it to Asia.  Eric Sprott has talked about this in his report.  That’s a hell of a good business for these bullion banks.  But that is why a tremendous amount of tonnage was moving out of GLD.  It was because of massive demand for physical gold, not people selling it.

There is still a significant premium in Shanghai and Vietnam right now, so the drain out of GLD will continue.  For all I know, that’s the reason for the $32 takedown today, so the bullion banks can cover more shorts in the paper market and take advantage of an ever wider spread as they raid GLD and sell the gold into Asia at a massive premium.

So investors need to peel back the layers of the price drop in order to see the reality of what is really going on here.  But what all of this is telling us, Eric, is that there is a tremendous shortage of physical gold out there.  There is a great deal of paper gold, but very little physical gold.  This is what is driving these massive premiums in the Far-East.”

Eric King:  “Egon von Greyerz told King World News that delays at Swiss refiners have now expanded to a stunning 5 weeks.  As you know, Keith, the Swiss refine 75% of the world’s gold.”

Barron:  “Yes, I wouldn’t doubt that at all.  I hear about tightness all over the place.  It is hard to get delivery of gold in bulk.  The US Mint and Canadian Mint have been shattering records in terms of sales.  So it doesn’t surprise me that the refineries here in Switzerland are running flat-out and still can’t meet demand.  If they can make $30, $40, or $50 above spot price, then it behooves them to put out as much product as they can as fast as they can and ship it off to the Far-East.

All of this will lead to a very bad ending for the West.  You have bankers and politicians literally destroying the future of the West for generations to come in order to keep a dying financial system alive for a few more years.  This really is a tragic and very sad situation.”