Monday, February 7, 2011

King World News-Expect Massive Chinese Gold Buying Using GLD

Eric King from King World News has been covering massive Asian buying for quite sometime.  According King's London Source, Asian buyers have a new strategy, which is buy massive amounts of ETF GLD, then tender the shares for immediate delivery.  From Kings's source: "So the Chinese have a new method.  They are now planning to buy tremendous amounts of the ETF GLD.  They will then tender the GLD shares for immediate delivery of the gold."

The goal of this strategy is bypassing the COMEX, there is no limit on how much Asians can buy in the GLD.  As you can imagine Asians have a huge desire to convert their fiat holdings into hard assets.  Yourhedge has covered extensively Asians desire to attain physical metal. 

FOFOA had a recent article called "Who Is Draining GLD", we may have our answer.  This should be seen as another catalyst for gold.  Who knows how paper gold will trade over the next several weeks, however this is more evidence we are moving closer to a complete disconnection between paper gold and physical gold.

KWN Article Here

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