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Will gold being shipped to Asia expose shortage?’s August 7 blog post with Stephen Leeb discussed the strong demand for gold in China, despite what the media report. Leeb says that this year China is set to import some 1,200 tons.

But, China is not the only Asian country where the demand for gold is strong. Most physical gold sold in Asia carries premiums, especially in India, and bullion banks are moving to fill that void to capture those premiums.

They are doing so by procuring physical gold in the US, not only from the COMEX warehouses and from ETF liquidations but directly from refiners. The gold is then converted into forms with which Asians are comfortable–mainly kilo bars–and then shipped to Asia.

Several weeks ago I exchanged emails with a rep for a major precious metals refiner about the huge ETF liquidations and speculated that liquidated gold was going to Asia. After all, the gold coming out of the ETFs and the COMEX warehouses has to go somewhere.

The rep said that my speculation fit well with what his refinery was seeing. He said, “I think you are absolutely right given the level of large institutional demand we see for our kilos and 400s to go to New York and London.” New York and London are the off-loading sites for gold being shipped to Asia.

In another email, he said, “The bullion banks were buying as much metal from our company as they could get their hands on just to ship to Hong Kong and Singapore.”

Now comes further evidence that ETF and COMEX gold is going to Asia.

Since their introduction a few years ago, the Royal Canadian Mint’s 100-oz .9999 silver bars have become immensely popular with silver bullion investors.

Their popularity runs neck and neck with long-time industry favorites, the Johnson Matthey 100-oz .999 silver bars. However, the RCM has stopped shipping their 100-oz silver bars.

We’re told that the RCM is now using the facilities normally reserved to melt silver for its 100-oz bars to melt ETF gold for fabricating into kilo bars for shipment to Asia.

As everyone knows, Asia–not just China–has grown tremendously wealthy since WWII, and Asians have an affinity for gold not felt anywhere else in the world, except maybe the Middle East. The gold being shipped to Asia is now in very strong hands and will not come back any time soon. Actually, acknowledgement of a shortage of physical gold, as is so often discussed on, may be closer to reality.

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