China disclosed last month that they would be willing to buy that IMF gold if the price was favorable. By that I infer that they wanted to get a discount to market, and they incorrectly gauged that the buying interest would be lower and they could afford to sit on the sidelines and low bid for the large tonnage transaction. India surprised many by acting aggressively to lock up 200 tons and I think it was a shot across the bows of China that will effectively launch a bidding war for physical gold stockpiles. There are other countries as well that I think will want to add to the bullion holdings, plus we have hedge funds and private investors that are accumulating in quantity. And lets not forget that producers like Anglogold and Barrick have announced multi-million ounce programs to purchase gold and close out existing hedge commitments, and all the while net worldwide gold production is in decline.

Those who expect a lower trend for gold prices in the years ahead are sadly out of touch with reality.

cheers!

mike