Anyone who wants to buy gold in size needs to step up and pay for it; the market will not come down to them, anymore. This will also light a fire under all the fence-sitting central bankers who haven't yet added to their gold reserves. With 200 tons already spoken for, this game will soon get frantic, as the bankers compete with one another to squeeze through the same door at the same time…

The Gold Cartel got their lunch handed to them today, with their usual ploys failing MISERABLY….

*The gold bears, which have been most of Planet Wall Street and most in the mainstream gold world, were counting on IMF gold sale supply to suppress the price. That illusion has now been crushed.

*A COUNTRY was willing to buy gold IN MASSIVE SIZE between $1027 and $1065. The accumulation of gold at prices well above $1,000 per ounce is an enormous psychological endorsement for much higher prices in the near future. It also projects that the $1,000+ area is now the new floor for gold. Investors will begin to think how do I get in this play versus I don’t want to be in gold because it is too expensive.

*As oft-mentioned here, central bankers are "sheeples." They are risk adverse folks who tend to look at markets as a herd. The Gold Cartel made it fashionable to dump gold, so many of them did … at THE BOTTOM of course. All to foster The Gold Cartel’s price suppression scheme. It was fashionable to be seen dumping gold back then. Fashions change and it surely has for gold. The in crowd fashionable thing to do now is to be seen BUYING gold … a la the Chinese, Russians, and Indians, etc.

*The ECB gold sales have slowed to a wimpy trickle or nothing. The Gold Cartel needs their selling to fill a huge/supply demand gap … met now by The Gold Cartel’s shrinking available supply. This latest IMF/Indian announcement is surely going to affect other central bankers who will not want to be seen selling gold. If anything, it is going to encourage a few more to BUY. This means The Gold Cartel is in the deepest of trouble, or as I mentioned the other day, "sucking wind!"

DEMAND…

*Central banks have been sellers for the past decade+. However, they have now become net buyers, led by China and Russia, both top global gold producers. Thus, it is in their special interest to accumulate gold instead of depreciating dollars…

So we know China is still looking to buy a large amount of gold, and they will have to become more aggressive to get it. The Russians are also buyers. Could we be seeing the early stages of a bidding war?... With some of the IMF gold overhang now gone, the light may go on that gold can in fact not only hold these levels, but march right on higher. This news could be a catalyst to create a buying frenzy.

Lets keep in mind this is central bank buying. We know that China is encouraging its people to buy gold, and there are new outlets for gold sales in the MidEast, and even department stores in the UK are now offering gold. Investment demand is climbing as some of the smartest people in the fund universe are redirecting their capital into physical bullion. And the hedging strategies that have blown up for gold producers are leading to new buying to cover those hedges, further adding competition to bid the market higher. All of this at a time when the net outstanding short position on the COMEX is at high levels and all of those positions are currently underwater.

Can the set-up be any better for gold?... I think we just got a big step closer to seeing buyers stepping up to buy out gold deposits and producing mines as the next option to get gold in quantity because the availability of gold bullion in quantity may be drying up fast. We have seen sovereign wealth funds from India and China buying up international oil projects. Can gold projects be far off?

I believe there is a run on the bank of the gold cartel and it is NOT at the COMEX…it is in the physical OTC market in London that trades 90% of the world’s physical gold trades. This can not be fixed by selling paper promises. This can only be fixed by supplying physical gold…and I don’t believe they have it. In fact I estimate they be missing 50,000t…a mere 25 years of global production!

*The prices of many in the junior/exploration sector remain moribund.

*That will change. Gold, silver and the shares are about to become, as long stated here, THE GO TO investments on Planet Wall Street.

*Today was the first day I felt a glimpse this is about to occur. The India/IMF gold news will be the catalyst.

*As a result, there will be a FRENZY to get into the precious metals sector. The beaten up, and severely underappreciated junior/exploration stocks, will double and triple in a very short period of time.

However, in the PM sector the outlook has never been brighter, but the overwhelmingly bearish attitude among the major reporting agencies and newsletter writers seems to have convinced investors to bail out.

I think we can expect this divergence to be resolved with a major move higher for the PM juniors sometime soon. If the Cartel could have done their thing to smash this rally they would have accomplished it by now. I think they are in retreat mode and higher gold and silver prices are on the way. When you have so many people all on the wrong side of a big move at the same time, the breakout will be seismic. The scramble back into the stocks of the juniors is going to create an uptrend we can tell our grandkids about. As for those trapped short, sorry about your luck...

Once the truth dawns on Jo P of Gold’s outlook, they’ll be a proportion of the populous looking at the best way to play this game,.. The long neglected mining sector and silver will be the great beneficiaries in my expectation, with silver out gunning gold by a multiple of 4-5 times from current levels,..

As GATA has been telling us for some time, it increasingly seems the squeeze is on in gold,.. Silver isn’t yet under such demand pressure, because it’s still in no ones buy basket as yet, but when the price explosions truly start in earnest in gold, demand for silver is likely to smash through the roof!..