Gold price goes up - actual sale down?

twister2

To the Precious Metals people,

If a gold analyst says gold has increased in price 35% but gold purchased is down 11% - I'm not sure how the price can go up but not the sale of actual gold.

Any explanations for the common folk? Is it some type of supply and demand, or perceived supply versus demand. If people are only holding and not selling, this can drive the price up without gold trading hands?

I feel I am missing something obvious here

lathmach

Gold goes up in price........ people quit buying.
What's hard to understand?

Ray

twister2

Well that was simple

I thought many people bought gold even at high levels with the anticipation of it going higher, or just cost averaging. Just never saw it that people stopped buying.

I figured there were as many people selling at a high and there must be a buyer then as well. Good thing I don't play in this arena. I must have been reading into it too much.

cohodk

It can also be termed "premium".

When the dollar last traded at this level relative to the currency basket, gold was about $925.

jmski52

Gold goes up in price........ people quit buying.
What's hard to understand?

The other part of the equation is that nobody wants to sell if the price is low, and as the price rises not everyone jumps on the bandwagon to sell. Sellers only happen one at a time, just like buyers.

Whether or not buyers or sellers materialize first has much to do with expectations. People quit buying if they expect to get a better deal, people quit selling if they expect to get a better deal.

People start buying if they think that they will get left behind. People start selling if they think that they will get caught holding the bag.

What's so hard to understand?