Gyroscopic Investing

Gold surging today on lack of supply in Dubai and India banning gold imports into the country. Tell someone they can't have something and you almost guarantee that the demand is going to surge.

Meanwhile JPM's physical gold vault continues to empty....

So just a few days ago we were seeing a huge amount of short-covering, and now India, with around 17% of the world population, has just announced that they are banning gold importation?  Coincidence?

Concerning JPM's emptying vaults, I read that the current price spike could be because they are being forced to buy up supply on the open market to meet delivery requests.  This, along with the stories of multiple claims on each physical ounce that they actually do possess, makes me weary of holding any paper gold (like GLD) these days.

Maybe I am spending too much time over at ZeroHedge.....

Zerohedge can be a claptrap....

JPM doesn't have to buy up physical. They can simply not deliver and deliver cash instead (force majure). What is significant though is that that don't have any physical. Scotia and HSBC have plenty of physical, but its not necessarily stored in the U.S. nor are they under any compunction to deliver any of it.

India is banning import to strengthen the Rupee. Good luck with that.

Larshus wrote: Zerohedge can be a claptrap....

JPM doesn't have to buy up physical. They can simply not deliver and deliver cash instead (force majure). What is significant though is that that don't have any physical. Scotia and HSBC have plenty of physical, but its not necessarily stored in the U.S. nor are they under any compunction to deliver any of it.

India is banning import to strengthen the Rupee. Good luck with that.

I think a declaration of force majeure by JPM might have a little effect on the gold price, maybe just adding a zero. And zero is nothing, right?

Isn't banning gold imports to India kind of like banning beer on a college campus?

Aren't Indians some of the biggest gold enthusiasts in the world?

That just seems like a really stupid thing to do.  Like double-dog stupid.