2023 is over, and the drain of physical gold from the ETFs and other paper funds sped up significantly last year. That leads to one basic question. Where is it all going? Since 2020, about 1,200 tonnes are unaccounted for, and about 800 tonnes of that was drained just In 2023. Some of it may have gone to central banks, but stackers are responsible for a good portion of the drain. It’s a very good sign that fewer are playing around with metal derivatives and going for the real thing.
Meanwhile, stresses in the overnight repo market continue to worsen. As 2024 begins, nearly $2 trillion are being traded for Treasuries every night, while the Federal Reserve continues to shrink the monetary base and dump more Treasuries on the market through quantitative tightening. These are two trains going in the opposite direction on the same track, and they will collide at some point soon.
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