Commodity Trade Mantra

Posts Tagged ‘Gold Jewelry’

Gold Jewelry Buying Expected to be Exceptionally Strong

Plentiful monsoon rains in India tend to drive up demand for gold & gold jewelry among rural, income-flush farmers, who make up a third of the country’s consumption of the yellow metal. Gold jewelry sales in India are expected to surge as much as 60% over last year, during this year’s festival season thanks to the fortuitously timed sharp drop in gold prices.

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 Poised to Leap as Love Trade Overtakes Fear Trade

India has pulled ahead of China. The economic output of India’s top 5 cities is expected to reach the size of 5 middle-income countries today. Mumbai’s massive $245 billion economy, could soon exceed the entire country of Malaysia. This presents a huge opportunity for the Love Trade to expand even more, as rising incomes & economic momentum have been a tailwind for gold demand.

Surge in Smuggled Gold Hits Indian Gold Refiners, Gold Jewelers & Banks

Smuggled gold could account for over a third of demand this year in India – the world’s second-biggest buyer of gold – potentially costing the government over $1 billion in lost revenue. Gold refiners have less than a 1% margin. If smugglers offer 4 or 5% discounts, they have no choice but to close operations. All 32 refineries in the country have stopped buying dore until market conditions normalize.

Gold Buying in India Set to Get a Boost from Strong Monsoons

Gold is more popular among lower income families, many of whom depend on monsoon rains to nourish their crops. About a third of Indian gold demand comes from rural farmers, who have traditionally converted a percentage of all crop revenue into the precious metal to be held as insurance and sold in times of dire need. Most reports so far this year indicate surplus rainfall.

What Will Catapult Silver Demand & Price Much Higher Than Gold

While global gold scrap represents 26% of total gold demand, only 13% of total silver demand was recycled last year. Thus, 87% of total world silver demand did not come from recycled silver supply. Investors need to understand that the majority of silver will never come back on the market until we see insanely high prices. There still won’t be enough to meet the silver demand.

Negative Yields On Global Government Debt Drives Gold Demand

It’s unprecedented that a third of all global government debt has negative yields. Which drives gold demand. Effectively what we’re seeing is people’s pensions being decimated because the policymakers have had very few if any alternatives left. It is in this environment that gold will help satisfy need. It’s more about protection of wealth rather than creation. That’s where gold plays.

SWOT Analysis - Where are Gold Prices Headed?

Gold prices are headed for the biggest weekly slump since November. But investors are still pouring cash into Gold ETFs & the assets continue to increase, with holdings currently near a two-year high. Gold miners have embraced hedging which could signify that miners don’t believe the high gold prices can last. Yet, JPMorgan Chase believes investors are better off betting on gold.

U.S. Gold Production Finally Hit Hard Due To Low Price

The lower price of gold has finally taken its toll on U.S. gold production. Domestic gold mine supply fell considerably in May compared to the same period last year. This is a significant amount as the United States is the fourth largest gold producer in the world. If current trends continue, U.S. gold production will fall below 200 mt in 2015.

The Push-Pull Dynamic in Gold and Silver

When it comes to gold and silver, mining supply drives price, and price drives pretty much everything else. Although gold is the dominant player in the gold-silver ecosystem, silver supplies still exert some influence on gold. End use of gold is much more price sensitive than the end use of silver, especially in jewelry.

Gold Seasonals Bottoming, Ahead of the Usual Major Surges

Gold exhibits strong seasonality, created by surges in global gold demand throughout the calendar year. While this has been suppressed in recent years by the Fed-fueled extreme market distortions, that anomaly is only temporary. Right now gold is experiencing its most-important seasonal bottoming.

India Eases Bank Gold Imports: Gold Can Again Be Used As Loan Collateral

Facilitated by the drop in oil prices – a key import for India, the RBI has finally lifted its ban on imports of gold coins and medallions by banks and trading houses. The RBI in a notification also said banks are permitted to import gold on consignment basis & are free to grant gold metal loans.

The Strong Season For Gold Buying Starts

The strong season in Gold is just getting underway, with this metal’s summer-doldrums seasonal low in place. Major income-cycle and cultural drivers from around the world lead to outsized gold demand surges. And gold’s best months of the year are nearing as Asian harvest buying ramps up followed by the fabled Indian wedding season’s arrival.

The Role of China in the Global Gold Market

The gold market in general is very opaque and the Chinese one, in particular, is even more. China has not made public its gold reserves since they announced a doubling of their reserves in April 2009. China will choose the time that is the most appropriate and to have the biggest possible impact for their geopolitical aspirations.

The Role of India in the Global Gold Market

With such a long pro-gold culture and tradition at the individual and official levels, the role of India in the gold market should not be underestimated. In any reset of the international monetary system, such a large possessor of gold in official and private hands will also play a major, if not a principal, role.

Rising Strength in the Rupee will take Gold off the Indian Investors’ Radar

Indian stock markets got off to a roaring start with the rupee rising to its strongest in 11 months against the dollar after the Modi led BJP swept India’s elections to a thumping victory. With so many reasons for the dollar to fall & the Indian rupee to gain and rise; Why would gold prices in rupee terms, rise further?

China Gold Demand To Rise Further - Fed Stand Also Favors Gold Bulls

Unlike the gold bearish 2013, 2014 seems to favor the gold bulls right from the start to the new year. Gold demand in China, which overtook India as the largest user last year, will rise about 25% in the next four years as an increasing population gets wealthier, according to the World Gold Council.

The U.S. Dollar: Currency Masquerading as Money

A critical attribute of money is that it be a store of value. The U.S. dollar has lost value at an increasing rate since 1971, losing 75% of its value from 1914 to 1971 and 96% from 1971 to 2014. Such a precipitous decline in the U.S. dollar’s purchasing power disqualifies it as real money.

Gold Smuggling Explodes in India after Moves Intended to Curb Demand

A 38-kg bust of gold smuggling allegedly involving a ring of Afghan women is just the latest example of a massive surge in gold smuggling, evidenced by data on gold seizures at airports. Officials said nearly 85 kgs of gold has been seized by the customs department since the beginning of 2014.

Silver Jewelry Sales in 2013 been Exceptionally Strong in U.S. - Survey

Silver jewelry sales in United States were robust in 2013, with 73% of jewelry retailers reporting increased sales last year, according to “Silver Jewelry Buying Trends,” a survey conducted by prominent jewelry trade publication “National Jeweler” on behalf of the Silver Institute’s Silver Promotion Service

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