Substitute arrangements will no doubt be developed in a little while so that premiums will become more normal. It is possible that there will be some pent up demand effect when this happens. It is feared that very substantial funds left with brokers as cash balances were diverted to finance stock market speculation. This, added to bank and brokerage failures, look likely to constitute a major blow to expectations of Indians forsaking possession of bullion in favor of paper assets. Quote from Jay Chen in Hong Kong.
China always goes to excess, whether in TV production, or orange growing.
The sales were announced as part of the 1999 Washington Accord, under which 15 European central banks agreed to limit their gold sales and lending to 400 tonnes a year and to a total of 2,000 tonnes over five years. According to a draft resolution endorsed by the Parliament Standing Committee on Economy, the Mongolbank is to be authorized to purchase 12,000 kg of gold and sell 50 kg of gold and 1,000 kg silver in 2001. It wasn't an investment decision these clients were making but a forced decision. Some of the best technical analysis work I have seen. Newsletter publisher Bill Bonner of Agora, Inc. recently started selling Kevin's work.