I wanted to bring everything together into one article to try to make some sense out of it. Maybe that way we can get some inkling of where things are headed. Bullion banks have made gold loans available at a one-percent interest rates or less. These bullion banks don t own the gold themselves, they only act as middlemen. They borrow gold from some central bank, loan it to a mining company, and the mining company sells it forward.
Success always begets excess .
The agreement contained even more meat. The banks also imposed a moratorium on gold lending . The flood of central bank gold that had kept the gold market floating on supply suddenly dried clean up. The gloomy cloud of central bank sales and lending which for so long had threatened the gold price suddenly lifted. We believe that the market will ultimately win, and that means much higher gold prices .