Is there a way to track central bank flows for gold? Also really interesting part around the price insensitiveness and the case where it’s proportional to real yields going up
You can track central bank gold flows, but only with lag and inference, not in real time.
The best signals come from IMF reserve data and World Gold Council aggregates, supplemented by BIS gold swaps and physical market proxies like LBMA vault movements. None are perfect on their own.
I believe the best expression to use for Gold prices is that of a "monetary trust measure".
And that trust seems fast eroding thanks to monetary & political actions, those often are interwoven and monetary debasement goes hand in hand with warmongering, "running it hot" and deficits - USA, looking at you for all of these, and likewise in the EU, warmongering (at all the wrong places) and at the same time bungling energy politics, making inflation get out of bounds and destroying your energy-reliant industry one by one, making them unprofitable thanks to unaffordable, unstable energy.
That's why Gold is on the rise, generally, in "retail" - but it's also on the rise as central banks know the "jig is up" in fiat, using it as a Tier 1 capital stack security (Basel III).
To reach the level of detail that we wanted without one article being over an hour long, we have split up the metals primer to focus on one at a time. Silver will likely be the next instalment.
Excellent primer on gold market structure. The Bretton Woods inflexion point is crucial but often underweighted when people discuss gold pricing dynamics today. What's interesting is how the 1971 shift essentially forced gold to become a barometer of policy credibilty rather than a static anchor, which explains why it behaves so differently than other commodites during liquidity cycles. I've noticed that conviction buyers now essentially function the way central banks did pre-71 but without the coordination mechanisn.
Excellent primer on Gold here
Thanks, William.
Is there a way to track central bank flows for gold? Also really interesting part around the price insensitiveness and the case where it’s proportional to real yields going up
You can track central bank gold flows, but only with lag and inference, not in real time.
The best signals come from IMF reserve data and World Gold Council aggregates, supplemented by BIS gold swaps and physical market proxies like LBMA vault movements. None are perfect on their own.
Great piece on the wider Gold market!
I believe the best expression to use for Gold prices is that of a "monetary trust measure".
And that trust seems fast eroding thanks to monetary & political actions, those often are interwoven and monetary debasement goes hand in hand with warmongering, "running it hot" and deficits - USA, looking at you for all of these, and likewise in the EU, warmongering (at all the wrong places) and at the same time bungling energy politics, making inflation get out of bounds and destroying your energy-reliant industry one by one, making them unprofitable thanks to unaffordable, unstable energy.
That's why Gold is on the rise, generally, in "retail" - but it's also on the rise as central banks know the "jig is up" in fiat, using it as a Tier 1 capital stack security (Basel III).
Great piece but what about silver?
To reach the level of detail that we wanted without one article being over an hour long, we have split up the metals primer to focus on one at a time. Silver will likely be the next instalment.
That’s great! Thx
Excellent primer on gold market structure. The Bretton Woods inflexion point is crucial but often underweighted when people discuss gold pricing dynamics today. What's interesting is how the 1971 shift essentially forced gold to become a barometer of policy credibilty rather than a static anchor, which explains why it behaves so differently than other commodites during liquidity cycles. I've noticed that conviction buyers now essentially function the way central banks did pre-71 but without the coordination mechanisn.
Where does PHYS from Sprott's fit into this analysis? It can be redeemed for actual gold so different from GLD that just tracks price of gold.