A few gold charts

The World Gold Council just released another Gold Investment Digest and it contains some nice charts. First, the relative size and growth of the gold ETFs around the world.
The streetTRACKS Gold Trust ETF (AMEX:GLD) just added a couple more tonnes today and is within a whisker of the 600 tonne mark - they are about to surpass the Chinese central bank in gold holdings unless the Chinese have been buying lately (which wouldn't be surprising).

In the chart below, the sales by the Bank of England back in 1999 and 2000 at under $300 look pretty silly now. Had they waited a few years, they could have sold the stuff for almost triple the price they got - way to go Gordon!

Spain, France, and Switzerland were big sellers last year, but that hasn't seemed to stop the price of the yellow metal from rising 20 percent or more in each of the last few years.

Who's going to sell this year? Dunno, but it looks like they're about to start emptying whatever is left in Fort Knox.

Mine production has been down for a few years as you can see below. As another example of the law of unintended consequences, the more the central banks sell, the more restrained the price increases are. This makes the business of gold mining only a marginally profitable business at best because it is energy intensive and most energy commodities and other raw materials have been rising much faster than the gold price.
Eventually, when the gold price is much, much higher, more production will come on line and this will put downward pressure on the price, but until then, if central banks really want to suppress the gold price, they ought to look into dumping crude oil into the market to make gold production wildly profitable, thus spurring more production.

Full Disclosure: Long GLD at time of writing

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