Who Are the Whales Buying Gold?

Ray Dalio, the billionaire money manager, who has $130 billion under management, appeared on CNBC this morning from the World Economic Forum in Davos, Switzerland.

His thinking about the markets is pretty much in line with the way I have been advising subscribers in the EPJ Daily Alert that I expect things to unfold. He expects money to move out of bonds and into equities, gold and other commodities. But what really caught my ear was his indication that he knows whales are in the gold market buying up gold.

Here's exactly what Dalio said:

So I just want to emphasize that the way that I look at any market is to look at the buyers and the sellers. and to understand, you know, sort of who's buying and who's selling and what are the motivations behind that. and so in each one of those cases, and I think if I was to get in to that a little bit much I would actually be dealing with sort of some confidential information. I think the important thing here to understand is that gold just generally is something that large large buyers, those with lots of portfolios would like to accumulate over a very long time, very slowly.

You can listen to the entire interview here. But the interesting question is, what does Dalio know about "large large buyers" of gold? Remember, this is a man with $130 billion under management, there are not a lot of buyers that he is going to consider "large, large." He seems to indicate these buyers are going to be accumulating for years. It almost has to be central banks. But, regardless of who the buyers are, that this buying exists is a good bit of information to know. It indicates strong support for gold at these levels and the potential for much higher prices down the road--as in multiples of the current price.