Asia Secretly Reprices Physical Gold?

04 Dec

Greg Hunter        Rob Kirby

Greg Hunter                                                   Rob Kirby                                 

Rob Kirby (Kirby Analytics) provides financial advice and sometimes helps broker the sale of tons of gold for big buyers and big sellers of physical gold.

Kirby was recently interviewed by Greg Hunter (video below).

In that interview, Kirby implicitly admitted that the Asian price for relatively small quantities (ounces or pounds) of physical gold is still consistent with the West’s price for paper gold seen in markets like COMEX.  That’s no surprise.

However, Kirby expressly declared that the Asian pricing mechanism for large quantities (tons) of physical gold has divorced itself from the western world’s pricing mechanism for paper gold. According to Kirby, tons of gold are hard to find in the Asian market, but if you can find tons of gold that are for sale in the Asian markets, you should expect to pay at least 50% more than the spot price of paper gold.

For example, if the spot price of paper gold in the western markets is $1,200 per ounce, you can expect to pay at least $1,800 per ounce for tons of physical gold in Asia.

•  Kirby does not clearly explain why the Asian price per ounce of tons of physical gold is enormously different from the Asian price for ounces of gold.  On the face of it, that difference seems irrational.  I.e., everyone expects to buy for less whenever we buy in mass quantity.  Therefore, if anything, we should expect that if we buy tons of gold, we’d pay a lower price per ounce that if we only bought one-tenth or one-half of an ounce of gold.  But according to Kirby, in Asia, you currently pay less per ounce for small purchases of physical gold than you would for buying tons of gold.

Why would this seemingly irrational price inversion take place?

I suspect the answer might be something like this:

Asian “insiders” believe that the price of all gold is about to rise by at least 50% in the near future.  Therefore, the “insiders” want to  buy tons of physicial gold now, while the paper-gold price is artificially suppressed, in anticipation of an imminent upward spike in the price of gold.

Current circumstances (an artificially low price for paper-gold and an expectation for a sudden, significant rise in the price of physical gold) certainly favor those who would like to buy gold cheap.  Right now, physical gold (in small quantities) is spectacularly cheap.  That’s great for buyers of physical gold, but not good for sellers.

China is a net buyer of tons of physical gold.  Current cheap gold prices (as set by the West’s paper gold markets) are great for China because they allow China to buy more gold for less money.  Therefore, so long as China is a net buyer of tons of physical gold, China doesn’t want the West’s price/ounce of paper gold to rise.

Why?  Because the West’s price for paper gold is being used to calculate selling price of the tons of physical gold purchased by China.

Therefore, it would make sense if China kept the Asian price for small quantities of gold (ounce or pounds) equivalent to the West’s price of paper gold since that artificially low price allows China to purchase tons of gold from the West at fire-sale prices.  I.e., the continued buying and selling of small quantities of gold by the “little guys” in Asia would help to suppress the price of tons of physical gold purchased by Asia’s “big boys”.

Therefore, in order to keep buying tons of physical gold “on the cheap,” the “big boys” might not want the world to know that the “real” price of physical gold should be at least 50% higher ($1,800) than the spot price for paper gold ($1,200) on COMEX.  Thus, the “big boys” in Asia might be secretly buying and selling tons of physical gold for at least $1,800/ounce.

Kirby didn’t say so in the Greg Hunter interview, but it’s worth noting that there’re reports that China has recently reduced the quantity of gold it’s purchasing.  For example, on August 14th, A.D. 2014, Bloomberg published an article entitled “Gold Demand in China Slumps 52% After Buying Frenzy Subsides”.  Generally speaking, most people interpreted that slump in China’s purchasing of gold as evidence that gold (at $1,200/ounce) was overpriced and therefore demand and price should fall.  That interpretation might be true–so long as the price of tons of gold still works out the $1,200 per ounce.

But.  It’s also possible that China’s reason for purchasing fewer tons of gold was based on the per ounce price of Asian gold having (secretly) risen to $1,800 an ounce.  I.e., China will buy all the tons of gold it can find at $1,200 per ounce, but not so many tons if the price works out to $1,800 per ounce.

If this speculation turns out to be true, it means that:

1) The real price of physical gold purchased by the ton is 50% higher in Asia than the price of paper gold in the US;

2) The supply of tons of physical gold bought and sold for $1,200 in Asia has dried up and disappeared.  No one who has tons of gold will sell for less than $1,800/ounce.  According to Kirby, even tons of gold priced at $1,800/ounce have virtually dried up.  That means that sellers are reluctant to sell their tons of gold for even $1,800/ounce—which implies that the owners of tons of gold believe the price/ounce for physical gold should rise considerably higher than $1,800; and,

3) Soon, the price of even small quantities of physical gold purchased by the ounce around the world (even in the US) is likely to follow China’s lead.  If so, the price of physical gold should diverge from the price of paper-gold and begin to match or even exceed Asia’s per-ounce price of tons of physical gold.  After all, when you buy large quantities of anything, you should get a price break.  Small quantities cost more per ounce than large quantities.  The price/ounce of a one-ounce bullion coin should naturally be higher than the price/ounce of a ton of gold bullion.  If the free market price of tons of physical gold is, say, $2,000/ounce, then the free market price for a one-ounce gold coin like the Gold Eagle should be, say, $2,200/ounce—maybe more.

The one question behind all of this speculation is this:  Is Rob Kirby’s claim true that Asians are already paying a 50% higher price/ounce for tons of gold?

I have no way of knowing.

But I do know that Kirby has been in the gold business for a number of years and is generally respected for his intellect, contacts, and credibility.  I believe Rob Kirby couldn’t tell a lie of that magnitude of the claim we see in his video interview, without losing his credibility and probably his business.

Of course, he might’ve made some kind of mistake.  If he did, it’ll be tough to live down.  But I don’t believe he’s lying.

More, we can gauge whether Kirby is lying or not from his demeanor in his interview.  As I view that video, I don’t think he’s lying.

Finally, Kirby’s claim (that Asian buyers of tons of gold are paying at least 50% more for tons of gold than the spot price of western paper gold) is so extraordinary, so explosive, that we can expect other sources to soon confirm or deny Kirby’s claim.  I don’t expect everyone to agree that Kirby is right or wrong.  I expect to see a conflict between claims of truthfulness or lies.  But I do expect that the truth—whatever it is—will out soon enough.

If it turns out that Kirby’s claim is true, the price of gold (even for the little guys buying or holding ounces) might be expected to rise dramatically within the next several months.  Kirby hints that a dramatic rise could even take place before the end of this year.

Here’s the interview:

Video    00:33:24


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10 responses to “Asia Secretly Reprices Physical Gold?

  1. thebobblob

    December 4, 2014 at 5:31 PM

    I was highly skeptical of this claim but with a quick google search I discovered that a one bounce panda is going for $1683.64 in Singapore. Wow $31.48 for a 1oz silver panda. Things are really screwed up!

    • Adask

      December 4, 2014 at 5:33 PM

      That’s evidence that Kirby’s claim might be valid. Thanks.

      These prices in Singapore do not indicate that “things are really screwed up”. These prices are evidence that the truth about the free-market prices of gold is finally beginning to emerge. That means that the prices perpetrated by the West’s manipulated markets for paper-gold may be about to end.

      If you’ve got gold, hang on tight. If you don’t, get some while you can.

  2. thebobblob

    December 4, 2014 at 5:32 PM

    • Adask

      December 4, 2014 at 5:58 PM

      I visited the link you provided. Singapore prices for 1-ounce gold Pandas are, as you said, are $1,683/coin ($1,750 if you pay by credit card). That’s about $400 (25%) higher than the price for a 1-ounce American Gold Eagle.

      Prices for 1-ounce silver Pandas are $31.48 each ($32.72 if you pay by credit card). That’s about $13 (65%) higher than the price of a 1-ounce American Silver Eagle.

      And, for the punch line, note that the store is “OUT OF STOCK” on both coins. That suggests that Asian buyers may have already bought out the store at those “low” prices. And that suggests that the real, free-market price of gold and silver coins in Singapore may be rising even higher than currently reported.

      • thebobblob

        December 4, 2014 at 6:25 PM

        I completely missed the OUT OF STOCK. Most of the perth mint items are out of stock too. Also would like to note that we are talking about one ounce coins. Kirby was talking about large quantities which could easily be $1800.

        As for hanging on: tell that to the Travis county central appraisal district waiting for their 5 figure check!

  3. Adask

    December 4, 2014 at 10:27 PM

    I missed something, too.

    The prices on the Singapore Coins website are denominated in “S$” not “$” or “US$”. I now realize those prices are in Singapore Dollars which, according to one source on the internet, are worth 76 cents in US dollars. Thus, the S$1683 (Singapore dollars) gold Panda is equal about US$ 1,280–about the same price as a American Gold Eagle. Thus, the gold Panda is selling for virtually the same price per ounce as the American Gold Eagle.

    I had jumped to a conclusion that was mistaken.

    in the price of silver Panda priced in Singapore Dollars (S$31.48) is equal to $23.95 in US Dollars. That’s a little high but still very close to the price in US dollars for American Silver Eagles and fairly close to the price of paper silver (in US dollars) plus a commission charges on all bullion coins.

    There is nothing remarkable about the prices for Gold Pandas or Silver Pandas as quoted on the Singapore Gold website. My conclusions to the contrary were mistaken and do not support Rob Kirby’s contention that gold sold in tons in Asia commands a 50% premium over the spot price for paper gold.

    Likewise, my mistaken conclusions do not refute the possibility that Rob Kirby’s contention concerning the Asian price for tons of gold may be 50% (or more) higher than the spot price for paper gold.

    I regret the error, but I learned to be more careful in viewing $ signs.

    • thebobblob

      December 4, 2014 at 10:36 PM

      Ahhh, yes you are correct, but if you look at the 2011 and 2012 panda’s, which are the only available 1oz coins for sale, the prices are S$2,300 which is USD$1749.35. All that matters is what is available for sale!

  4. Adask

    December 5, 2014 at 12:32 PM

    Good point.

  5. dog-move

    December 6, 2014 at 11:55 AM

    Exodus 3:22 “Every woman will ask her neighbor and the woman staying in her house for silver and golden jewelry( my bible spells jewellery with t LL’s), and clothing (cloak, covering). In these you will dress(cloak) your own sons and daughters, despoiling the Egyptians ( holders of the Birth Certificate Slave Bonds) of [them].
    Gather silver and gold for the sake of the next generation, the dollars value will resemble an actual number, but the zeros will precede. Not the ONE DOLLAR bill but the 000 ONE DOLLAR bill, much the same as what is done with penny stocks. Just reverse split it or place O’S in front of the “1” or “10” or “20” ect. ………

  6. dog-move

    December 6, 2014 at 12:15 PM

    no one I know in the real world in which I live and breathe and move about in has any metal. what happens when somebody yells fire in the crowded theatre? gonna be a real mess.
    in the days of Solomon silver was regarded little and was as common as stones. Solomon may not have been able to recognize true value because he turned his heart away from the Law of YHWH, much the same in the land today. BUY SILVER WHILE IT CAN BE FOUND!


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