呢篇是好文章, 講解實金和紙金的分別和近來金銀市場發生乜事, 不過因為太長所以本人須讀多幾篇才能用中文寫出內容 ! 大家都可以用 google 翻譯去讀內容 !
在西方, 就係美國和歐洲, 金融界當黃金是投資, 而全球黃金庫存是約16萬噸 !
在西方只有少數投資者會持有實金, 不同亞洲人當實金是儲蓄 !
在1974年全球黃金庫存是約今日的一半, 就係約8萬噸, 其中國家儲備約3.7萬噸, 所以剩下4.3萬噸是金條、金幣和金飾 ! 因為無正確記錄, 所以估計有3萬噸實金是在西方少數人手中 !
在1980年的牛市, 因為驚通脹, 所以好多投資者買金幣和金礦股票 ! 而賺取美元的油元國家和全球富有的投資者會經瑞士和倫敦買金條 !
之後在 Volcker 加息時代, 通脹下降使黃金轉入熊市, 而西方投資者減少實金投資 !
去到2000年西方一年的飾金銷量得返400-750噸, 所以實金儲存也會比1974年的3萬噸少好多, 但全球的庫存已去到 12.8萬噸 ! 呢個時候印度開始增加買入實金, 而打後中國都買入實金 ! 西方的投資顧問又不建議客戶投資黃金, 所以新出產的實金都俾不是西方國家買去了 ! 西方愈來愈少的實金儲存可以解釋到近來發生的金價壓價事件 !
www.zerohedge.com
Submitted by Alasdair Macleod, via GoldMoney.com,
Introduction
In this article I will argue that the recent slide in the gold price
has generated substantial demand for bullion that will likely bring
forward a financial and systemic disaster for both central and bullion
banks that has been brewing for a long time. To understand why, we must
examine their role and motivations in precious metals markets and
assess current ownership of physical gold, while putting investor
emotion into its proper context.
In the West (by which in this article I broadly mean North America
and Europe) the financial community treats gold as an investment.
However, of the global pool of gold, which GoldMoney estimates to be
about 160,000 tonnes, the amount actually held by western investors in
portfolios is a very small fraction of this amount. Furthermore
investor behaviour, which in itself accounts for just part of the
West’s bullion demand, is sharply at odds with the hoarders’
objectives, which is behind underlying tensions in bullion markets. To
compound the problem, analysts, whose focus incorporates portfolio
investment theories and assumptions, have very little understanding of
the economic case for precious metals, being schooled in modern
neo-classical economic theories.
These economic theories, coupled with modern investment analysis
when applied to bullion pricing, have failed to understand the growing
human desire for protection from monetary instability. The result has
for a considerable time been the suppression of bullion prices in
capital markets below their natural level of balance set by supply and
demand.
Furthermore, the value put on precious metals by hoarders in
the West has been less than the value to hoarders in other countries,
particularly the growing numbers of savers in Asia.
These tensions, if they persist, are bound to contribute to the eventual destruction of paper currencies.
The ownership of gold
The amount of gold bullion that backs investor-driven markets is not
statistically recorded, but we can illustrate its significance relative
to total stocks by referring back to the time of the oil crisis of the
mid-1970s. In 1974 the global stock of gold was estimated to be half
that of today, at about 80,000 tonnes. Monetary gold was about 37,000
tonnes, leaving 43,000 tonnes in the form of non-monetary bullion,
coins and jewellery. Let us arbitrarily assume, on the basis of global
wealth distribution, that two thirds of this was held by the minority
population in the West, amounting to about 30,000 tonnes.
This figure probably grew somewhat before the early 1980s, spurred
by the bull market and growing fear of inflation, which saw investors
buy mainly coins and mining shares. Demand for gold bars was driven by
the rapid accumulation of dollars in the oil-exporting nations, as well
as some hoarding by wealthy investors from all over the world through
Switzerland and London.
The sharp rise in global interest rates in the Volcker era, the
subsequent decline of the inflation threat and the resulting bear
market for gold inevitably led to a reduction of bullion holdings by
wealthy investors in the West. Swiss and other private banks, employing
a new generation of fund managers and investment advisors trained in
modern portfolio theories, started selling their customers’ bullion
positions in the 1980s, leaving very little by 2000. In the latter
stages of the bear market, jewellery sales in the West became a
replacement source of bullion supply, but this was insufficient to
compensate for massive portfolio liquidation.
So by the year 2000, Western ownership of non-monetary gold suffered
the severe attrition of a twenty-year bear market and the reduction of
inflation expectations. Portfolios, which routinely had 10-15% exposure
to gold 40 years ago even today have virtually no exposure at all.
Given that jewellery consumption in Europe and North America was only
400-750 tonnes per annum over the period, by the year 2000 overall gold
ownership in the West must have declined significantly from the 1974
guesstimate of 30,000 tonnes. While the total gold stock in 2000 stood
at 128,000 tonnes, the virtual elimination of portfolio holdings will
have left Western holders with little more than perhaps an accumulation
of jewellery, coins and not much else: bar ownership would have been at
a very low ebb.
Since 2000, demand from countries such as India and more recently
China is known to have increased sharply, supporting the thesis that
gold has continued to accumulate at an accelerating pace in non-Western
hands.
Western bullion markets have therefore been on the edge of a
physical stock crisis for some time. Much of the West’s physical gold
ownership since 2000 has been satisfied by recycling scrap originating
in the West, suggesting that total gold ownership in the West today
barely rose before the banking crisis despite a tripling of prices.
Meanwhile the disparity between demand for gold in the West compared
with the rest of the world has continued, while the West’s investment
management community has been actively discouraging investment.
The result has been that nearly all new mine production and Western
central bank supply has been absorbed by non-Western hoarders and their
central banks. While post-banking crisis there has presumably been a
pick-up in Western hoarding, as evidenced by ETF and coin sales and
some institutional involvement, it is dwarfed by demand from other
countries. So it is reasonable to conclude that of the total stock of
non-monetary gold, very little of it is left in Western hands. And so
long as the pressure for migration out of the West’s ownership
continues, there will come a point where there is so little gold left
that futures and forwards markets cease to operate effectively. That
point might have actually arrived, signalled by attempts to smash the
price this month.
This admittedly broad-brush assessment has important implications
for the price stability essential to bullion banks operating in paper
markets as well as for central banks attempting to maintain confidence
in their paper currencies.
Precious metals in capital markets
In the West itself, the attitudes of the investment community are
fundamentally different from even those of the majority of Western
hoarders, who are looking for protection from systemic and currency
risks as opposed to investment returns. Western investors are generally
oblivious to the implications, the most fundamental of which is that
falling prices actually stimulate physical demand. Before the recent
dramatic slide in prices the investment community undervalued precious
metals compared with Western hoarders, let alone those in Asia,
encouraging physical bullion to migrate from financial markets both to
firmer hands in the West as well as the bulk of it to non-West
ownership. There is now irrefutable evidence that these flows have
accelerated significantly on lower prices in recent weeks, as rational
price theory would lead one to expect.
Pricing bullion is therefore not as simple as the investment
community generally believes. It is being put about, mostly on grounds
of technical analysis, that the bull markets in gold and silver have
ended, and precious metals have entered a new downtrend. The evidence
cited is that medium and longer-term moving averages have been violated
and are now falling; furthermore important support levels have been
breached.
These developments, which arise out of the futures and forward
markets, have rattled Western investors who thought they were in for an
easy ride. However, a close examination of futures trading shows the
bearish case even on investment grounds is flawed, as the following two
charts of official statistics provided by weakly Commitment of Traders
data clearly show.
The Money Managers category is the clearest reflection in the
official data of investor portfolio positions, representing sizeable
mutual and hedge funds. In both cases, the number of long contracts is
at historically low levels, and shorts, arguably the better reflection
of money-manager sentiment, remain close to high extremes. On this
basis, investor sentiment is clearly very bearish already, with the
investment management community already committed to falling prices.
Put very simplistically there are now more buyers than sellers.
Money Managers are in stark opposition to the Commercials, who seek
to transfer entrepreneurial risk to Money Managers and other investor
and speculator categories. The official statistics break Commercials
down into two categories: Producer/Merchant/Processor/User, and Swap
Dealers. Both categories include the activities of bullion banks, which
in practice supply liquidity to the market. Because investors and
speculators tend to run bull positions, bullion banks acting as
market-makers will in aggregate always be short. A successful bullion
bank trader will seek to make trading profits large enough to
compensate for any losses on his net short position that arise from
rising prices.
A bullion bank trader must avoid carrying large short positions if
in his judgement prices are likely to rise. He will be more relaxed
about maintaining a bear position in falling markets. Crucially, he
must keep these opinions private, and the release of market statistics
are designed to accommodate these dealers’ need for secrecy.
Bullion banks’ position details are disclosed at the beginning of
every month in the Bank Participation Reports, again official
statistics. They are broken down into two categories, based on the
individual bank’s self-description on the CFTC’s Form 40, into US and
Non-US Banks. Their positions are shown in the next two charts (note
the time scale is monthly).
In both gold and silver, the bullion banks have managed to reduce
their exposure from extreme net short over the last four months. The
reduction of their market exposure suggests that they have been
deliberately transferring this risk to other parties, and is consistent
with an anticipation that bullion prices will rise. It is the other
side of the high level of bearishness reflected in the Money Manager
category shown in the first two charts. The bullion banks control the
market; the Money Managers are merely tools of their trade.
There has been little reduction in open interest in gold and it has
remained strong in silver, because risk has been transferred rather
than extinguished. Daily official statistics on open interest are
provided by the exchange and summarised in the next two charts (note
that data is daily).
From these charts it can be seen that recent declines in the gold
price are failing to reduce open interest further, and in silver open
interest remains stubbornly high. Therefore, attempts by bullion banks
to reduce their net short exposure by marking prices down are showing
signs of failure.
We can therefore conclude that investor sentiment is at bearish
extremes and the bullion banks have reduced their net short exposure to
levels where it risks rising again. Therefore the downside for precious
metals prices appears to be severely limited, contrary to sentiments
expressed by technical analysts and in the media.
This market position is against a background of a growing shortage of physical bullion, which is our next topic.
Physical markets
Casual observers of precious metal prices are generally unaware that
the headline writers focus on activity in the futures markets and
generally ignore developments in physical bullion. This is consistent
with the fact that market data is available in the former, while
dealing in the latter is secretive. However, as with icebergs, it is
not what you see above the water that matters so much as that which is
out of sight below.
It is not often understood in investment circles that gold and
silver are commodities for which the laws of supply and demand are not
overridden by investor psychology. Therefore, if the price falls,
demand increases. Indeed, the increase in demand has far outweighed
selling by nervous investors; even before the price-drop, demand for
both silver and gold significantly exceeded supply. Evidence ranges
from readily available statistics on record demand for newly-minted
gold and silver coins and the net accumulation of gold by non-Western
central banks, to trade-based information such as imports and exports
of non-monetary gold as well as reports from trade associations
reporting demand in diverse countries such as India, China, the UK, US,
Japan and even Australia.
All this evidence points in the same direction: that physical demand
is increasing on every price drop. There is therefore a growing pricing
conflict between futures and forward markets, which do not generally
involve settlement but the rolling-over of speculative positions, and
of the underlying physical metal. Furthermore, analysts make the
mistake of looking at gold purely in terms of mining and scrap supply,
when nearly all gold ever mined is theoretically available to the
market, in the right conditions and at the right price. The other side
of this larger coin is that if the price of gold is suppressed by
activity in paper markets to below what it would otherwise be, the
stimulus for physical demand, being based on a 160,000 tonne market, is
likely to be considerably greater on a given price drop than analysts
who are myopic beyond 2,750 tonnes of annual mine production might
expect. The numbers that are available confirm this to have been the
case, particularly over the last few weeks, with reports from all over
the world of an unprecedented surge in demand.
This is at the root of a developing crisis of which few commentators
are as yet aware. Demand for physical has accelerated the transfer of
bullion from capital markets to hoarders everywhere and from the West’s
capital markets to other countries, which has been the trend since the
oil crisis in the mid-Seventies. This is what’s behind an acute
shortage of physical gold in capital markets, explaining perhaps why
bullion banks feel the need to reduce their short positions.
While we can detail their exposure in futures markets, meaningful
statistics are not available in over-the-counter forward markets,
particularly for London, which dominates this form of trading. Forwards
are considerably more flexible than futures as a trading medium,
generating trading profits, commissions, fees and collateralised
banking business. The ability to run unallocated client accounts,
whereby a client’s gold is taken onto a bank’s balance sheet, is in
stable market conditions an extremely profitable activity, made more
profitable by high operational gearing. The result is that paper
forward positions are many multiples of the physical bullion available.
The extent of this relationship between physical bullion and paper is
not recorded, but judging by the daily turnover in London there is an
enormous synthetic short physical position. For this reason a sharply
rising price would be catastrophic and any drain on bullion supplies
rapidly escalates the risk.
Overseeing this market is the Bank of England co-operating with
other Western central banks and the Bank for International Settlements,
whose combined interest obviously favours price stability. They have
been quick to supply the market if needed, confirmed by freely-admitted
leasing operations in the past, and by secretive supply into the
market, which has been detected by independent supply and demand
analysis over the last 15 years. Furthermore, as currency-issuing
banks, central banks are unlikely to take kindly to market signals that
suggest gold is a better store of value than their own paper money.
We can only speculate about day-to-day interventions by Western
central banks in gold markets. In this regard it seems that the slide
in prices on the 12th and 15th April was triggered by a very large
seller of paper gold; if this market story and the amount mentioned are
correct, it can only be central bank intervention, acting to
deliberately drive prices lower. Given the market position, with Money
Managers in the futures markets already short and highly vulnerable to
a bear squeeze, the story seems credible. The objective would be to
persuade holders of physical ETFs and allocated gold accounts to sell
and supply the market, on the assumption that they would behave as
investors convinced the bull market is over.
Conclusions
For the last 40 years gold bullion ownership has been migrating from
West to elsewhere, mostly the Middle East and Asia, where it is more
valued. The buyers are not investors, but hoarders less complacent
about the future for paper currencies than the West’s banking and
investment community. There was a shortage of physical metal in the
major centres before the recent price fall, which has only become more
acute, fully absorbing ETF and other liquidation, which is small in
comparison to the demand created by lower prices. If the fall was
engineered with the collusion of central banks it has backfired
spectacularly.
The time when central banks will be unable to continue to manage
bullion markets by intervention has probably been brought closer. They
will face having to rescue the bullion banks from the crisis of rising
gold and silver prices by other means, if only to maintain confidence
in paper currencies. Any gold held by struggling eurozone nations,
theoretically available to supply markets as a stop-gap, will not last
long and may have been already sold.
This will likely develop into another financial crisis at the worst
possible moment, when central banks are already being forced to flood
markets with paper currency to keep interest rates down, banks solvent,
and to finance governments’ day-to-day spending. Its importance is that
it threatens more than any other of the various crises to destabilise
confidence in government-backed currencies, bringing an early end to
all attempts to manage the others systemic problems.
History might judge April 2013 as the month when through precipitate
action in bullion markets Western central banks and the banking
community finally began to lose control over all financial markets.
