Author: Eric Sprott
Posted: Thursday , 12 Jun 2014
(SPROTT MONEY) -
I am very excited about developments in the gold and silver markets today. I have been speculating since late 2012 that Western central banks could be running out of gold. I put the sell-off in gold and silver in 2013 to the fact that the Western banks needed a way to generate physical gold supplies. As the metals prices went down, there was a lot of liquidation of gold which increased the supply by an estimated 900 tonnes last year.
Let’s look at the figures. The annual supply of gold is around 4,300 tonnes. 3,000 tonnes come from mining and the other 1,300 tonnes or so from recycled material. In 2013, an additional 900 tonnes came onto the market from ETFs that were being liquidated – a supply increase of around 21%. ...