Swiss Gold Referendum Rejected but The Big News Is That India Is Back! + Technicals = 1234 - 1294 Later 1488 - 1548?? XAUUSD

With oil prices down, the Indian economy is surging. 

As it has been since the days of Rome, when you put wealth in the hands of an Indian of any other kind, it will soon transform into gold.

Reuters

Indian gold buying will be at record-breaking levels this year if oil prices stay low, and no amount of statist/bankster cartel intervention is likely to be sufficient to overcome the heavy physical demand that will inevitably come. Helping things along is the fact that the Indian government is now beginning to drop the various regulations that dramatically lowered the amount of gold that would have otherwise been flowing to India, starting in 2013, giving the cartel a break for a while.

With the demise of the Swiss referendum, statists has proven that their bankster friends can keep gold out of the system, without regard to price. That is important because a gold-based monetary system is incompatible with the welfare/warfare state that they seek to maintain. But, now they know for certain that it is possible for gold prices to rise to the moon, and still keep gold discredited.

China holds the gold price key

If China wants the gold price to turn around, it has all the ammunition available to bring this about.

latest week’s withdrawals from the Shanghai Gold Exchange are still over 50 tonnes – 52.5 tonnes for the week ending November 21 to be precise. This means our recent estimate for Chinese demand this year, as represented by withdrawals from the SGE, remains on track to reach close to 2,100 tonnes. It’s already hit 1,829 tonnes and if the 52 tonne/week level is maintained until the year end should reach over 2,090 tonnes plus as the Chinese New Year approaches – a very strong time for Chinese gold purchases.

But should China want to make a specific impact on the gold price it has all the ammunition it needs to do so. There is a very strong belief among many analysts that China is building its gold reserves to at least match, or perhaps exceed those of the US, and if it should come clean and announce a major increase in its reserves – the last time it did so was nearly six years ago – this would give an immediate massive fillip to the gold price and is a scenario those traders short gold must dread. 

Or, even if this is not the case, should China wish to see the gold price rise in order to keep its citizens who have purchased gold happy (they were effectively encouraged to do so by the government-owned banks) or to embarrass the West, it has enormous foreign exchange reserves available to intervene in the market and buy physical gold sufficiently to turn the markets around strongly.  

Gold is actually seen as in short supply anyway in the West, which is why the gold believers cannot understand recent price movements which seem to fly in the face of economic supply/demand logic and a China boost could have a very rapid strong upwards effect. Western governments may be wise not to tweak the tail of the dragon as it certainly has the wherewithal to play the gold card and throw global markets into turmoil