Worldwide demand for gold eases, stocks of gold bullion at 7 month high

Baley

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Demand eases, even in India and China; maybe they finally have "enough" of the yellow metal?

Baley

Year to date, gold was down 26 percent, on track to snap a streak of 12 consecutive yearly gains. A sharp rally in U.S.equities, an improved economic outlook and the absence of inflation have sapped gold's safe-haven appeal

derryb

I demanded less over the past 12 months. My demand will pick up when I think the bottom is in. Could be that others feel the same way.

Appears investment demand is the primary cause.

cohodk

How many threads were there 6-12 months ago telling us demand was unprecedented, thru the roof, insatiable, ect?

Someone kept saying the best cure for high prices is high prices. Hmmm.

ricko

Just another cycle.... Keep calm and keep stacking... Cheers, RickO

DrBuster

I take it the Indian gold tax increase and swift underground trading were not considered.

roadrunner

Reuters Gold Field Mineral Services is a shill for the central banks, gold bullion banks, and IMF to name just a few. Their primary goal is disinformation, obfuscation, and generally bashing gold in both subtle and non-subtle ways.
Be careful when reading any of their material. Key things are left out to slant the article to their biased view. GFMS = CRAP (Gold Fudging Material Stats).

At the same time they are reporting this skewed survey showing "abundant" gold, they are ignoring the fact that the actual physical gold "registered" for delivery at the Comex and LBMA is at multi-year lows (10 yrs?).
These 2 "facts" are at odds with each other. Eligible bars could have numerous claims on them. Per Jesse below the current different claims on every gold ounce is around 65-1. Unless you are that one person out of 65
don't count on getting your gold. The Registered inventories have been shrinking in 2012-2013 and are at historically low levels. Big difference between registered vs. eligible. This is a shell game the bullion banks play. It's also
quite possible that some of those eligible ounces are bars currently residing in the GLD ETF or other similar "funds." There is no control on the number of claims on each 100 oz bar. We know the boyz rig about every statistic
possible....it's no different with the reported gold inventories. Christian is correct that few contracts are settled with bullion. But if there was ever a large increase in demanded deliveries, the exchanges could not handle it and
would be forced to settle up in paper. The Singapore gold exchange will be fully on line in 2014 and they will be a physical exchange rather than a paper exchange like the Comex. Chinese demand is not really easing, especially
at the central bank level where they are putting away 500-1000 tonnes of gold each year. Indian "visible" demand has eased considerably because of tight import controls levied by the govt to better support the rapidly dropping
Rupee. GFMS survey does not record increasing black market gold demand in India as citizens circumvent their govt gold controls.

Jesse's Cafe - table of REG vs. ELIGIBLE gold

carew4me

I am 46 yrs old. My income has never been higher.
Should Gold fall to 500 Oz and Silver to $9 Oz, I could not be happier.
This would mean that the stack I am passing to my son will be larger than otherwise would be.
I convert %10 of my income the metal. Its not an investment. If I am down from a costs basis,
I don't care because I would have blown this money on material nothings in my former life without thought.

I will note, because of those darn 2010 ATBs, I do try to cash in on hysteria, limited runs, people over paying for bullion etc.

But that is just to keep things interesting

cohodk

Conspiracy=ignoring facts. Long live conspiracy.

Is it not just possible that the FOREVER proven supply/demand equation has again been proven? Is it not possible that gold prices are down because demand is down? Nah, this time its different. LOL!!

roadrunner

This is not about conspiracy vs. non-conspiracy. But, more about realizing there's always an non-presented side to the "obvious" sheeple attention-grabbing headline.

The "FOREVER proven" supply demand equation has had holes in it as long as GFMS has been publishing it. For example why during those first few years of Central Banks buying 200-500 tonnes of net gold (ie demand)
was it not included in their "widely accepted as accurate" supply / demand stats? However, they went out of their way every year to include all the formal EU CB gold sales. All one can ask is that GFMS present both sides
of the story equally well. Hasn't happened yet though.

China doesn't have close to enough of the yellow metal yet. Once they get to 5,000-10,000 tonnes it may be enough. Russia is also said to be sand-bagging the IMF gold holdings as well. Those guys want to make leaps into
the top 3 positions when they finally disclose their real holdings. The reason behind is this gold backed notes of the BRICS banks coming in 2014. The real issue is not so much supply vs. demand, but rather where the demand
has been flowing to. And for the past 2 years there has been a huge shift of physical gold flows to the eastern nations (ie BRIICS). The reduction in paper gold demand (and price) has been the perfect set up for these guys to
get this job done.

derryb

ironic how low gold prices appear as compensation to China. Could it be that a deal was made not to dump all those US treasuries they hold? And when does the agreement expire? What will happen to gold prices at that time?

roadrunner

<< <i>ironic how low gold prices appear as compensation to China. Could it be that a deal was made not to dump all those US treasuries they hold? And when does the agreement expire? What will happen to gold prices at that time? >>



Yes, I think this is part of the "deal." China needed to get more gold to be at the same economic table as the US and Germany. So they have worked a deal with the US to get his done at an attractive price. The USgovt
gets to see gold get crushed for a few years while they juice the stock markets....China gets to stock up on gold on the cheap. WIN-WIN deal. When the grand bargain is over it will be time to reset currency values vs. gold as
all the key players will have positioned themselves properly. Another factor in this is that JPM apparently took out some huge gold loans in 2005-2008 to the tune of thousands of tonnes of physical gold. The USGovt has been
trying unsuccessfully to get them to return it. Germany's 300 tonnes may be a drop in the bucket compared to the JPM situation. I don't presume to know how all these guys position themselves to wash all this out. But it is
probably a big part in what's been going on in 2013.

Baley

it stands to reason

cohodk

supply demand equation has had holes in it

Of course because this time is different.

Because there is a conspiracy..."ironic how low gold prices appear as compensation to China. Could it be that a deal was made not to dump all those US treasuries they hold? And when does the agreement expire?"

Its probably not the fact the the largest gold market (India) had seen the price of gold go from 1 months salary to 3 months salary. Nah, definately not demand destruction.

Funny how fundamentals are spouted to support a bull market, yet completely disregarded in a bear market. Oh, the power of religion. But dont fret PM bulls, the equity and real estate bulls share your religion.

Mark my words........the next financial crisis will not be from the US or Europe, but rather China. The irony will be that the PM bulls will be correct about China's effect on gold, but for all the wrong reasons.

derryb

<< <i>"the next financial crisis" >>


there's hope for you yet

TwoSides2aCoin

Miners can take a much needed vacation.

ricko

Ah yes....that ancient Chinese curse - "May you live in interesting times." - and we certainly do....Cheers, RickO

roadrunner

.the next financial crisis will not be from the US or Europe, but rather China. The irony will be that the PM bulls will be correct about China's effect on gold, but for all the wrong reasons.


We haven't concluded the one in the US or Europe that began in 2007. Just because it's been simmering under the surface for the past 2-3 years doesn't mean the big banks have resolved a thing....other than their
share prices. You can't make 900 TRILL In otc interest rate contracts just disappear. Even David Blaine can't do that.

jmski52

Mark my words........the next financial crisis will not be from the US or Europe, but rather China. The irony will be that the PM bulls will be correct about China's effect on gold, but for all the wrong reasons.

Based on my limited understanding, it appears that China is creating even more liquidity than the US and business is down there as well.

Its probably not the fact the the largest gold market (India) had seen the price of gold go from 1 months salary to 3 months salary. Nah, definately not demand destruction.

Funny how fundamentals are spouted to support a bull market, yet completely disregarded in a bear market.

The ban on imports of gold and the surtax being imposed might possibly have something to do with India's drop in demand. Why disregard those fundamentals that run contrary to your opinion?

When the grand bargain is over it will be time to reset currency values vs. gold as all the key players will have positioned themselves properly. Another factor in this is that JPM apparently took out some huge gold loans in 2005-2008 to the tune of thousands of tonnes of physical gold. The USGovt has been trying unsuccessfully to get them to return it. Germany's 300 tonnes may be a drop in the bucket compared to the JPM situation. I don't presume to know how all these guys position themselves to wash all this out. But it is probably a big part in what's been going on in 2013.

Which is part of my concern, will the governments even allow us plebians to even own gold, once they've achieved their positions?

You can't make 900 TRILL In otc interest rate contracts just disappear. Even David Blaine can't do that.

If there's that big of an overhang in interest rate contracts, I'm guessing that the economy won't ever work it's way out of it, interest rates will stay low and taxes will skyrocket until the system simply collapses from mathematical impossibility. I didn't read the article, but is the ECB considering negative rates for depositors? Yeah, that'll work really well.

renman95

<< <i>supply demand equation has had holes in it

Of course because this time is different.

Because there is a conspiracy..."ironic how low gold prices appear as compensation to China. Could it be that a deal was made not to dump all those US treasuries they hold? And when does the agreement expire?"

Its probably not the fact the the largest gold market (India) had seen the price of gold go from 1 months salary to 3 months salary. Nah, definately not demand destruction.

Funny how fundamentals are spouted to support a bull market, yet completely disregarded in a bear market. Oh, the power of religion. But dont fret PM bulls, the equity and real estate bulls share your religion.

Mark my words........the next financial crisis will not be from the US or Europe, but rather China. The irony will be that the PM bulls will be correct about China's effect on gold, but for all the wrong reasons. >>



In what manner?

Baley

I'll hazard a guess: What happens when everyone who wants to have gold, has enough of it to suit their purposes, and then maybe they want to spend the money tied up in gold on something else?

derryb

<< <i>Link to article

Demand eases, even in India and China; maybe they finally have "enough" of the yellow metal? >>



The numbers beg to differ

Baley

China buying all that gold, and the worldwide spot price still falling? Wonder what will happen WHEN they slow down their buying or even start selling?

derryb

<< <i>China buying all that gold, and the worldwide spot price still falling? Wonder what will happen WHEN they slow down their buying or even start selling? >>


The bond market is about to provide you an answer.

cohodk

<< <i>

<< <i>China buying all that gold, and the worldwide spot price still falling? Wonder what will happen WHEN they slow down their buying or even start selling? >>


The bond market is about to provide you an answer. >>



PMs bulls must be praying for a rally in bonds then for since the 10 year Treasury peaked last summer gold has gone down. Higher rates--and the 10 yr is not going over 5%--will result in even lower gold prices as investors will again have another alternative to an asset that does not pay dividends or interest and actually costs to protect against physical loss.

Believe it or not the FED wants higher rates as this will encourage investors to "loan money to the banks" via savings accounts and CDs. Higher rates will also increase income to savers which will stimulate the economy and will promote growth.

cohodk

The ban on imports of gold and the surtax being imposed might possibly have something to do with India's drop in demand. Why disregard those fundamentals that run contrary to your opinion?

I view this tax as rather inconsequential. It had already cost 3 months salary to buy an ounce of gold. Do you really think that adding another 2 weeks salary would have such an effect on demand? Demand for gold, as represented by the number of ounces that could be purchased, was already destroyed by the high price.