Commodity Trade Mantra

Posts Tagged ‘Demand for Gold’

Indian Investors Stampede into Gold and Silver Bullion

For the previous year or two the Indian government had been trying to encourage citizens to decrease their demand for physical gold and silver. Because of the ability to convert the notes at banks on a delayed basis, jewelry stores in India were quickly besieged since Nov. 8th, with customers seeking to spend the banned notes buying physical gold and silver.

Is Now the Best Entry Point for Gold Investors?

Gold was hammered down while Chinese markets were closed in the prior week, triggering a technical buy signal and possibly the best entry point in over a year to add to positions. Is now the best entry point for gold investors? Yes. Faster U.S. inflation and low interest rates will support gold. Gold always performs best when nobody thinks you should own it.

Gold Prices will Rise Once the Rate-Hike Obsessed Sellers are Out of the Way

After a rip-roaring first half, gold prices are plunging as we enter the home stretch of 2016. Gold futures are sitting near breakeven as we begin the new trading week. But when it comes to gold’s longer-term prospects, all is not lost. Even mainstream analysts are preparing for a bounce in gold prices once the highly-anticipated December rate hike is out of the way.

Gold may Spring a Surprise on Rising Uncertainty & a Slowing Global Economy

Over the long term, people have realised the benefit of portfolio diversification. Holdings in gold-backed ETFs were 2,051 metric tons by Oct. 14, the highest level since June 2013. In the latest gold and silver COT report, paper players made big strides in bringing the market back into balance & setting the stage for an eventual rebound. The gold market may surprise us again.

Recycled Gold has met 60% of Indian Gold Demand on High Gold Prices

India has traditionally been one of the largest gold markets on the planet, second only to China. But, the high gold prices are threatening India’s status as a leading importer of gold. So much recycled gold has come into the system in the past few months that it has met 45% to 60% of the local gold demand. However, demand for gold in the US has risen 27% this year.

Gold Prices Based on Historically Low Real Interest Rates - A Small Hike Won't Hurt It

Gold prices are up 26% so far in 2016 & heading into the fall the greater risk remains to the upside due to the tremendous amount of money sloshing through the system. The potential Fed rate hike this September will not hurt gold prices because gold prices are a function of historically low real interest rates. Also helping gold, is the dislocation in the currency markets, especially post-Brexit.

Gold Bullion Flows Reverse Back into the West - What does it Mean?

U.S. has become a significant gold importer. Gold is flowing from vaults in London, Switzerland & even Dubai to the U.S. In May, U.S. imported over 50 times the monthly average amount of gold. Investor demand was the largest component of gold demand for Q1 and Q2 – the first time this has ever happened. This means that more U.S. investors are diversifying their assets into gold.

Issues that drove Gold Prices to all-time highs in 2011 Have Only Worsened

In 2011 there was an entire narrative around the gold market, when gold was at $1,900 & it was partly about US markets. The narrative in 2011 was that U.S. Federal Government on-balance sheet liabilities, at $16 trillion & the off-balance sheet liabilities of $55 trillion were unsustainable. Today, they are estimated at $19 trillion & $90 trillion respectively. Worsened enough?

Due to Financial Cancer of Debt, Devastation is Our Future- Gold the Only Remedy

The fact that demand for gold is soaring says a great deal about investors’ combined frame of mind these days. People are scared. I fear devastation is in our future. If central bankers had succeeded in their efforts, we would have no need for negative rates. There is simply too much debt (financial cancer) in the system to save it. And buyers of gold know this.

Peak Gold Production and the Implications for Gold Prices

The global gold output has been contracting since 2013. There are just not that many new mines being found and developed, and this is “very positive” for the gold price going forward. Thomson Reuters too is of the view that global mine supply is set to begin a multiyear downtrend in 2016. Demand for gold, on the other hand, should remain strong, helping to support prices even more.

Gold Demand Remains Stable During Sector Weakness

Gold demand peaked in the middle of 2010 & went sideways for a few years before succumbing to the bear market. That lack of strong demand in 2011 while Gold surged, was a warning sign. The amount of Gold in GLD can be a sort of an indicator for the sector. While Gold & gold shares are correcting now, the real time data coming from GLD suggests Gold demand is & should remain firm.

The Significance of the Massive Change in the Gold Market

The significance of the change in the gold market can be better seen by the average annual increase in total gold holdings during the 2009-2012 period which was 15 Moz compared to 25 Moz for the first half of 2016. If demand for gold continues as strong in the second part of the year, we could see upwards of 50 Moz move into these total gold holdings versus 45 Moz for the 2009-2012 period.

Gold will Never Let a Good Crisis go Waste & There are Lots of Them Coming

The current geopolitical uncertainty has been years in the making & extends beyond the gyrations in British politics. Negative or low interest rate environments, macro risks & deteriorating confidence towards central banks & monetary policy are the reasons cited for the fresh interest in safe haven gold. IF there’s one thing that can be said for gold, it’s that it never wastes a good crisis.

Gold and Silver Go Ballistic on Panic Buying as Paper Assets Crumble

There’s a lot of people out there now who are thinking, “Do I have enough gold and silver? Should I buy some more here?” And if the price goes up a lot of them are going to panic and think, “Well, if I’m ever going to get it I got to pay today’s price,” and so they jump in and they buy, and that gives whatever kind of move that’s happening some extra momentum.

Brexit or Not - No Dearth of Solid Reasons For Gold Prices to Surge

Should the British reject devolution, gold prices might briefly move a little lower – even though, in the days running up to today’s referendum, the financial markets may already have “priced in” a no-vote. In the event of a Brexit victory we will likely see official demand for gold pick up as the appeal of holding central bank reserves in pound- and euro-denominated assets diminishes.

India's Gold Imports Drops 51% in May, Gold Demand Takes a Hit

Indian gold imports have tumbled for fourth straight month in May this year, while gold demand remains muted over the past several months. India’s gold imports during the month are believed to have dropped sharply by 51% year-on-year to 31 tonnes in May. But, when matched with the April ’16 imports of 22 tonnes, the monthly imports in May rose higher by over 40%.

Some Game-Changers for Gold Prices on a Long-Term Outlook

Don’t for a second believe these are the only factors making a strong case for higher gold prices ahead. There are many more that suggest the same. Looking at all that’s happening around the world, $5,000 gold prices seems like a real possibility. I don’t expect the gold price to hit $5,000 right away. It will take time – Nevertheless, gold bears beware!

A Technical Correction in Dollar can put some Pressure on Gold Prices

Given the relatively small amount of deliverable gold in the market at any one time, the gold price has the potential to be extremely volatile with this level of off-market speculation hanging over it. The wider public is slowly waking up to the horrors of negative interest rates & withdrawal of high-denomination bank notes, both which will almost certainly increase demand for physical gold.

The Looming Bank Run Will Send Gold Prices to $3,000+

How do you think the government would react to the ultimate financial crisis…a bank run that locks Americans out of their own bank accounts? Right now, less than 1% of Americans own a single gold or silver coin. If that number rises to just 2%, it would create a huge demand for gold. It could easily push gold prices to $3,000 or beyond. And easily push silver prices to…?

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