Physical gold buying surges to record levels in Dubai emptying souks

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The Dubai gold trade has experienced its best 10 days of trading in 12 years with sales volumes up three-fold since the gold price crash. This has left the gold souks very short of gold. Retailers are paying record premiums to restock. Gold dropped as low as $1,332 an ounce and prices have now rebounded to $1,424 and look to be heading higher.
Prices jump back
There is an almighty battle going on between the Comex futures market as the price setting mechanism for gold and the physical markets like the Dubai souk.  But the return of the retail buyer shows a depth and strength to the gold market that can hardly be ignored and, as the past days have demonstrated, will ultimately overpower the Comex price fixing.
Gold only plunged in price earlier this month because of deliberate central bank intervention to depress the market after Japan launched its epic $1.4 trillion money printing program. However, this intervention has backfired badly on the banks.
By depressing the gold price the central banks have unleashed a fresh wave of demand, and these bargain hunters are now in the money thanks to the bounce in prices. It could even be the start of the gold and silver mania that the central banks want to prevent.
Sell in May?
That said the more sanguine view is that the US stock market will ‘Sell in May and Go Away’ this year and drag bullion prices down again to test their recent lows. If they hold then the only way is up.
Then again if you never actually buy your bullion how will you ever benefit from the much higher prices to come? Any sell-off will only be temporary now with the lunatic money printers running the asylum.

Source: Bullion Bulletin

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