Don't ask me if gold can still be bought anymore.

First, you need to clarify who is actually buying now? The mainstream narrative will tell you: this is the central banks of various countries de-dollarizing, preparing for the end of the fiat currency system. Even legendary investor Ray Dalio said this is an inevitable path under major conflict. But if central banks are really frantically emptying their gold reserves, why do we see completely opposite signals in trade data?

We need to look at the data. London is the global center for gold and silver trading, and the data from UK customs acts as a thermometer for central bank purchases. Although the purchasing volume of central banks did double after 2022, by November, the UK's gold export volume actually plummeted by 80% year-on-year. China is the number one buyer, but in November, the total amount of gold imported from the UK was less than 10 tons, far below the average level. If the real major buyers are holding back, why can gold prices still be maintained at high levels?

There is a rational logic here: central banks also think gold is too expensive.

When gold prices rise, the market value of gold in reserves will automatically increase. For example, Poland originally wanted to raise the gold proportion to 30%, but because the gold price is too high, this goal has almost been automatically achieved, and they will naturally slow down their purchasing pace. In fact, the strongest driving force for sovereign purchases is already on the edge of retreat.

Since exports are declining, where did the gold go?

The answer is: it stayed in the gold vaults in London. Why buy gold and not transport it back to their country? The first reason is for liquidity. As long as the gold does not leave London, it can be realized on the books at any time; once transported away, additional costs for appraisal and transportation must be paid. The second reason, according to data from the London Bullion Market Association, the amount of gold in the vaults increased by 199 tons in December.

Historically, when vault reserves significantly increase while export volumes are extremely low, it usually indicates that sovereign purchases have reached their end.

To put it bluntly, the people buying gold now have no intention of putting the gold into their national treasury; they are just buying a certificate called an unallocated account. What they possess is merely a debt claim against the vault. It feels like the current strength is more like a gold-worshiping religion supported by market inertia. People no longer care whether the dollar collapses or not; they only care if there is another speculator willing to pay a higher price to buy this certificate from me.