central banks buy gold

The Bank of Korea had made its first gold purchase in more than a decade. South Korea now joins Thailand, China, Russia, India and Mexico who have recently acquired large amounts of gold.

Central banks were net sellers of gold a decade ago when gold was below $300/oz. That was a signal to buy. Finally now, only after a decade of rising prices, have central bankers become confident enough to be net buyers of gold.

This is yet another signal (along with extreme bullish trader sentiment readings and near record net long positions on gold by funds managers) that gold is forming a major top. Just like in 2001, now that the trade has become so one-sided, it's time to take a position on the other side of the boat - before it capsizes.