GOLD – YES, China has ramped up purchases of gold – this has been the driver of the gold price – not some nonsense about rates!

By Tshepo Magagane

BUT remember that its holdings of US Treasuries is incomplete here – you also have to look at various holdings in clearing houses across Europe (Belgium) – which is also China.

Just because a datapoint supports your investment case, does not mean you dont take a closer look at it.

I know that China and other CB average buy-in price is likely around USD3,500/oz – and continues to migrate upwards with more purchases.

And I know that when you are to the absolute left of quintile 1 or even 2; you are printing cash.

It is like looking at Copper – it is not a data centre story – it is Industrialisation (you need to mine what has been mined for 10,000 years for the next 18 years) and then Electrification…

…data centres will only be 1Mtpa of demand…

…but that demand coming when big miners have to drop grades to 0.4% (from current 0.8% and vs 3% when I started out)…

…and this additional albeit incremental demand from data centres come from price insensitive buyers…

…base case you were already going to have a “price fly-up scenario”; this is only going to exacerbate it!