The smart money knows this and they are starting to move. This includes Central Bankers who are buying the king of metals, gold bullion, hand over fist.
As I stated at the start of this year, I believe 2019 is going to be a year of significant accumulation in the precious metals market and one that as the year progresses is going to see it finally break out of this horrible sideways trading pattern that we have been in for years.
As many of you know gold has been stuck in an abysmal trading pattern, moving slightly above $1300 only to be crushed back down toward the $1100 mark.
This comes in spite of the fact that we now face the most geopolitical uncertainty we have faced in decades.
However, not everyone has been unaware of these dangers.
Central Banks spent 2018 accumulating precious metals in a monumental way, increasing their holdings by the most in one year, since 1967. Quietly accumulating while the rest of the financial world happily ignores the alarm bells going off all around them.
Recently, the World Gold Council stated that the world consumed 4,345.1 tonnes of gold throughout 2018, up from 4,159.9 tonnes in 2017.
The chief driver of this move higher was Central Banks, who bought 651.5 tonnes throughout 2018, a staggering 74 percent increase over 2017 and as previously stated, the largest increase since 1967.
Sadly, Western Central Bankers are still asleep at the wheel and were not the main contributors to this increase.
As I have been reporting on for years, countries such as Russia, India, China, Poland, Kazakhstan and Turkey were the main purchasers of gold bullion throughout 2018.
As the vaults in the West continue to be drained, the vaults in the East continue to fill to the brim with real, honest money, that is unlikely to ever return.
These countries are happily buying gold bullion in vast quantities, diversifying out of their USD holdings as they do so.
Gold net accumulators know that the winds of change are coming and precious metals are likely to once again play a very vital role in the future, as the dominance of the US dollar continues to erode.
I believe both Russia and China are more aware of this than any others and are actively planning the day in the future, in which one of them, most likely China, can replace the USD as the reserve currency of the world.
Gold will play a vital role and is just one of the many reasons why they are so eager to accumulate precious metals.
I strongly believe that this trend is just the beginning and we haven't seen anything yet.
A major crash in the global economy lays just over the horizon and it is only a matter of time before precious metals are once again called upon to play the vital protection role that they have always fulfilled throughout history.
Global supply of gold is increasing at a snails pace, increasing by only 1% last year.
If retail investors finally wake up and begin to move into precious metals as they did in the last bull market, then we will have an explosive scenario on our hands.
Gold and silver bullion vaults will be drained at a staggering pace and a runaway move higher in prices will finally break the shackles that have kept it contained for years.
Smart Central Bankers know this and it is exactly why they are making their move before the masses wake up, accumulating gold bullion while it is on sale, before the inevitable move higher.
- Source, As first seen on the Sprott Money Blog
