Maybe the video (that I didn’t bother to listen to) was better than this short story about gold at CNBC, but it didn’t seem worth the time to listen to, especially since it’s one of those annoying auto-play deals that you’d think, by now, would have been outlawed (if you click on a video, then it makes sense to have auto-play, but if not, it’s just annoying).

See if you can spot the problems in this report (well, they’re highlighted):

The central banks of Russia, Kazakhstan and Azerbaijan all boosted their gold purchases in April, according to a report on Monday from the International Monetary Fund.

Together, the three countries bought up some 24,125 pounds of gold in the month. And as a whole, central bank net purchases contributed to more than 11 percent of the demand for gold in the first quarter of 2013, according to the World Gold Council.

So can the central banks save gold?

“I don’t think that central bank buying is going to actually stop this decline in gold,” said Kathy Lien of BK Asset Management. That said, central bank purchases “are certainly stemming the slide, and gold would probably be closer to $1,200 if it wasn’t for this demand by central banks.”

So why doesn’t she think those same purchases can save gold?

“You’ve consistently seen central banks increase their purchases over the last couple months,” Lien said on Tuesday’s episode of “Futures Now and yet you’ve still seen gold prices fall.”

That’s why for Lien, the continued central bank purchases that she predicts will “not [be] enough to stop this yellow from falling.”

In fact, this strategist sees gold prices going all the way down to $1,200, as the U.S. dollar continues to rise compared with other currencies.

Who refers to large quantities of gold in pounds? And don’t the proof readers at CNBC know it’s “yellow metal”, not just “yellow” (or maybe they meant Old Yeller). Not one of CNBC’s finer moment, though, they probably figure no one reads their gold commentary anyway with stocks making new highs every day.

No metal exited the trust for the SPDR Gold Shares ETF (GLD) on Monday, but that was due entirely to markets being closed for the Memorial Day holiday.

Expect outflows to resume today as the trust has shed gold bars on 31 of the last 34 trading days beginning early last month, just after Goldman Sachs recommended that clients not just sell – but short – the metal.

Combined with rumors that officials in Europe might begin seizing gold from the central banks of wayward eurozone members (and aided by some unusually large futures market sell orders) the gold price began tumbling and owners of GLD shares began selling in earnest.

Despite being only moderately correlated with the gold price in recent years as detailed in “Do More Gold ETF Outflows Mean Even Lower Gold Prices Ahead?,” ETF flows have dominated the news coverage of the gold market in recent months and it’s worth taking another look at the relationship between these two.

In an update to the graphic from six weeks ago as shown below, one thing is clear – ETF flows and the gold price are once again highly correlated as indicated in red. Only in 2007 was there a closer relationship between the two, that is, back when the price of just about every asset class was rising and global markets were readying for their 2008 crash.

[To continue reading this article, please visit Seeking Alpha and to access precious
metals commentary that Tim only shares with subscribers, join Iacono Research.]