Credit Agricole: "There’s Only one Explanation" Central Bank Demand

Since December 3rd, we've speculated a sovereign wealth fund or CB was in the market. Now one bank sees it our way. More may follow.

Housekeeping: Written in trading mindset… grammar not perfect. Includes tactical insights and Silver commentary

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1. Since December 3rd, we've speculated a sovereign wealth fund or CB was in the market. We believed that order was finished being filled between 5 and 10 trading days ago and said as much

2. A sovereign wealth fund (or funds) and/or a CB likely of Eastern origin had been buying Gold.

3. Since the aborted buy order of Dec 3rd (and 4th) coupled with the very long hours a certain BiS customer service rep put in that night

Now one bank admits seeing it our way

We have contended in this space on multiple occasions, (based on experience and information), a sovereign wealth fund was in the market purchasing Gold that night.

We also contended that fund (or funds) were told to chill out that night, (ht ZH for spotting Benoit burning the night oil), and the rest of that order or similar orders were then worked quietly over the subsequent months.

Gold rallies after the CBs are done and the funds pile in

Yellow in Chart 1 above correlates with green in chart 2 below…

Open Interest confirms that statement…

Now one bank without an agenda agrees

Credit Agricole: There’s Only one Explanation Left

Now, one firm, came to almost the same conclusion. After doing their own research, Credit Agricole said this:

This leaves us with one explanation –that the latest XAU rally reflects growing demand from central banks.

Conclusion: BRICS nations are either buying Gold directly from the US or a US Bullion Bank is facilitating their buy order using BiS as an intermediary.

Another key point:

• CBs bought weakness.. but it was ABOVE $2000. That is significant. Someone is losing patience.

Here is that understated but frank CA analysis in total: