he figures show that 1,984 tons of silver were imported in the first half year – 37% more than in the same period last year and the highest first-half-year silver imports in seven years

Gold's next 11 year cycle high (red arrow) falls due in late 2019 - early 2020.

Head of the Financial Markets Division of the Dutch central bank, Aerdt Houben, stated in an interview for newspaper Het Financieele Dagblad published in October 2016 that releasing a bar list of the Dutch official gold reserves “would cost hundreds of thousands of euros”. In this post we’ll expose this is virtually impossible – the costs to publish the bar list should be close to zero – and speculate about the far reaching implications of this falsehood.

Flows this week

That gold is still holding at its current level—despite rising rates, despite a stock market that continues to rally—is “encouraging.”

That’s one of the key takeaways from a UBS note this week, in which the Swiss financial services firm maintains its constructive view of the yellow metal. Investor demand this year has been slower than expected, but UBS analyst Joni Teves makes the case that expectations of a good monsoon season in India this summer could help push consumption in the world’s second-largest importer of gold to a new record high by the end of the year. With India having imported a phenomenal 525 metric tons in the first half of 2017 alone, Teves writes that “we expect gold demand in India this year to be around historic averages,” which would be very supportive for prices.

A highlight of 2017 financial markets has certainly been the explosion of interest in cryptocurrencies. We attribute growing interest in digital currencies to a concern shared by many gold investors. In short, resentment is mounting over the financially repressive policies of global central banks. Specifically, the imposition of negative interest rates and related official backing of increasingly cashless economies have catalyzed interest in investment vehicles outside the traditional financial system, such as precious metals and cryptocurrencies. Along the way, comparisons of bitcoin to gold have become all the rage. Because spot gold has spent the past five-and-a-half months trading within a $100-range, while the prices of cryptocurrencies have soared, some have even suggested that digital currencies are usurping gold’s role as preferred store of value.

According to the recently released data by the Australian Government June 2017 Resources and Energy Quarterly, Australia exported more gold to Hong Kong and China during the first quarter of 2017 than any other quarter in history.

Australian gold exports to Hong Kong and China were 54% higher Q1 2017 versus the same quarter last year:

I’d love to be able to declare that the bull market in gold and silver is back on. Gold and silver bull markets are wonderful things. Maybe the bull market begins tomorrow. I hope so. But I’m afraid that, depressing though it may be, I have to be honest and say I can’t see it. The conditions aren’t right.

We need triggers. In 2001, people turned to gold as they fled stockmarkets after the dotcom crash. Ditto post 2008. From being a forgotten asset there grew a genuine belief that the monetary system was broken and that gold was the solution.

Such beliefs may well be even more correct now than they were then. But the problem is there are fewer such believers; there is no common narrative to give such a bull market impetus. The “money-is-broken” narrative has moved over to bitcoin. The stockmarket is rising and acting as a perfectly good hedge against inflation. Why bother with gold?

With the London Gold Market trading unlimited quantities of unallocated gold which the bullion banks create out of thin air, and with COMEX trading gold futures which are also created out of thin air, the disconnect between the world of unlimited paper gold and the world of limited physical gold is becoming ever more stark.

On one side lies paper claims on gold which come into and out of existence through cash-settled market mechanisms. On the other is real physical gold that is segregated, allocated and unencumbered, with full title held by the gold holder. Paper gold ownership is fleeting, speculative and prone to counterparty and conversion risks. Real gold is tangible, has inherent value, has no counterparty risk, and can be securely stored.

Buy time soon.