The Gold War: Physical vs Paper

There are two types of gold: physical and paper.  Everyone knows what physical gold is; it’s the shiny stuff you hold in your hands.  Paper gold, refers to a piece of paper (or digits in a computer) acting as a substitute for the physical gold.  With paper gold, you don’t own the gold. Many experts claim that there are at least 200 “paper” ounces for every ounce of physical gold.

As I mentioned in another post, the paper market is where all the price manipulation occurs, and currently there is a war between paper gold traders and physical gold holders.  If fact, according to John Embry:

“We are literally witnessing a war between the physical buyers (Eastern central banks), and the paper manipulators (commercials or bullion banks), and that is why there is such a fierce battle being waged in gold between $1,735 and $1,800.”

“If the commercials run into trouble (with their massive short positions), KWN readers will see a move in gold that will leave them breathless.”

The paper manipulators (commercials) are massively short gold, and every time they try to drive the price of gold lower to close their positions, they are blocked by a wall of physical buying.  Meanwhile, physical buyers, such as China, are happy to pick up physical gold at discounted prices.

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