Chart: Which countries are falling behind in gold mine production
India tops the global ranking with demand nearly 50 times that of its mined supply.
New York investment bank Goldman Sachs has picked up 466,000 ounces of gold from cash-strapped Ecuador.
According to the South American nation’s central bank, Goldman acquired 1,165 gold bars, worth roughly $580 million at today’s ruling price.
Ecuador under socialist President Rafael Correa is seeking sources of cash “after borrowing more than $11 billion from China since defaulting on $3.2 billion of foreign debt five years ago,” reports Bloomberg.
Ecuador’s is the only country on the continent using the US dollar as currency and the central bank explained it “invested” the gold with Goldman in exchange for more liquid assets.
The country will get the gold back within three years and the central bank expects to turn a profit of as much as $20 million on the transaction without explaining how.
George Gero, a vice president and precious-metals strategist in New York at RBC Capital Markets told Bloomberg: “It’s really a puzzling transaction. The idea that there was a large sale and you don’t know when it will come out into the market is probably pressuring prices.”
The price of gold fell 3% last week and on Tuesday continued to hover near four-month lows of $1,245 an ounce.
Gold remains some 4% to the upside for 2014 but is down $135 from highs reached mid-March as the rally on the back of safe haven demand and bargain hunting loses steam.
3 Comments
Tonto Kowalski
I was talking to an ‘international man of the world’ about 6 months ago and he was aware of my gold stacking. He said all it would take is one country to sell their gold and the price would come crashing down.
I didn’t argue but quietly thought ‘With Germany trying to get its gold repatriated what country would EVER be silly enough to sell their gold?’ Hello Ecuador. (Where I had planned to expat to!)
Goldman Sachs said gold will be at $1,000 an oz later this year. They just made that happen.
Ecuador needed the liquidity for infrastructure. I can’t blame them. No different than taking your gold to the pawn shop to get you through to your next pay check.
Banksters_Rule_the_World
IMAO: Trading gold for U.S. dollars is like trading land for beads.
Luxomni
Tell it to Germany.