The data on world gold supply and demand was published recently by the World Gold Council and much was made of the rising consumer demand for the precious metal.
However, it is not all it seems.
We have been tracking these trends for some time and despite some specific year-on-year rises, the trends do not signal that overall demand in rising.
Physical demand for gold on Q3 for both jewellery and for coins, bars and bullion slipped from the previous periods in volume terms.
India and China may be spending more buying gold, but in India's case at least, that is because their local currency is devaluing.
And it is hardly positive that ETF EFT holdings 'declined less'.
Even central bankers are buying less.
For the quarter, 1,146 tonnes were mined or entered the markets from reprocessed scrap, while market demand was only 775 tonnes, its lowest level since March 2004. Central banks bought 93 tonnes.
That means that world supply exceeded world demand by a massive 277 tonnes, the highest excess since our records began in March 2002.
This contrasts with the reverse peak exactly five years ago in Q3 2008 when supply was low (781 tonnes), demand was high (1,245 tonnes), and central banks were selling (76 tonnes).
High prices are drawing in more supply. New mining investment takes a long time to result in product in the market, and that is happening now.
Supply of scrap however responds much more quickly to current price signals.
These volume trends explain why recent prices in US dollars have been weakening. Econ101 has been at work.
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You can find detailed, up-to-date pricing for gold coins, bars/bullion, and gold scrap, all in both NZ$ and US$, here »
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10 Comments
Gold manipulation investigated by regulators. Zero Hedge make the point that since Foreign Exchange, Energy Trading, Libor and Mortgages have been manipulated it's obviously unquestionable to consider Gold is 'price managed'....
http://www.zerohedge.com/news/2013-11-19/gold-manipulation-probed-uk-re…
The UK authorities are looking into that possibility.
http://dealbook.nytimes.com/2013/11/20/british-regulators-said-to-be-reviewing-gold-benchmarks/
Bitcoin seems to be playing the role that Gold would be playing if Gold wasn't(in my opinion) being so manipulated.
China plays major role in legitimizing Bitcoin
According to finance.qq.com, China has played a pivotal role enabling Bitcoin to become a genuine currency with its total holdings worldwide now worth some US$1 trillion. The virtual currency has given China a rare chance to exert its influence in the global financial arena, at a time when it has been a hostage to the US dollar, as it cannot sell off US currency due to its huge US-dollar reserves.
In addition, Bitcoin can augment China's economic influence in Africa, helping it tap the continent's natural resources. Digital currency like Bitcoin is expected to have good reception in Africa, enabling African people to access financial services now denied to them.
With the maturity of its infrastructure, Bitcoin may become a transaction vehicle in bulk-commodities and other markets, especially in view of its merits of rapidity and low handling fees for some transactions.
According to finance.qq.com, along with the popularity of Bitcoin, some weak African currencies may become history, as growing numbers of local people use mobile phones as an payment instrument. While the trend may endow China a paramount financial status in Africa, it may bode ill for the US should non-OPEC oil-producing nations denominate their oil contracts in Bitcoin.
It's an irony that US, as a free-market champion, has been reactionary in the surging Bitcoin current in sharp contrast to the predominant role of China. Shots have now been fired to start a cross-border race for the virtual currency.
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20131120000128&cid=1102
Could Bad Data Be Depressing the Gold Price? Eric Sprott Says GFMS Stats Are Flawed
No, it's all Chaston's fault that gold remains depressed. He systematically discouraged, disillusioned every gold bug that used to frequent this place....word got out...ha ha ha!
Manipulated or not , it didn't get near the beat up prices touted by zerohedge and others selling the buggery their sub agenda....promising a return to the gold standard while the Fed can print unlimited dollas and manipulate its worth at the same time.....you gotta ask why would you..?
Eh !
Hey BTW....I'm not dead.....just restin...like a Norwegian Blue.
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