World Gold Council Releases Q2 Gold Digest

A modest bout of profit taking in gold, in big part driven by hedge fund liquidations at the end of Q2, has pushed spot price by less than 7% from the all time high, and a variety of bears have crawled out of the woodwork screaming the end of the gold bull market. In the grand scheme of thing this is rather myopic. It was precisely the same quantitative easing the provided the impetus for gold's straight line rise from just over $800 to $1270 in the span of a year as faith in the future of monetary currencies has progressively disappeared, that will serve as the springboard for the next major move higher: and with the Fed now days away from announcing some iteration of its brand new monetization scheme, the days where gold can be purchased cheap may be ending. For those still relatively new to the gold market below is a useful recap of the major developments for the world's best performing asset in Q2 courtesy of the World Gold Council.

Key points:

• Heightened investor activity supported an upward trend in the gold price throughout the quarter; on several occasions breaking record highs and reaching US$1,261.00/oz on the London PM fix on 28 June, as investors sought out assets offering protection, diversification and liquidity.
• Investors bought 273.8 net tonnes of gold via exchange traded funds (ETFs) in Q2 2010. This represents the second largest quarterly inflow on record and brought the total amount of gold held in the ETFs that the WGC monitors to over 2,000 tonnes (worth US$81.6 billion). In particular, SPDR Gold Shares (GLD) surpassed the US$50 billion milestone.
• In the early part of the second quarter, many currencies around the globe not only fell against the US dollar but also experienced higher levels of volatility as credit woes in Europe had a negative impact on the outlook for the euro and the British pound. While the dollar appeared to fare better, investors sought out gold as a currency alternative as evidenced by large purchases of coins and small bars around the globe.
• Many assets, including global equities and commodities, experienced a period of pronounced volatility, in some instances surpassing levels seen during the first quarter of 2009. Gold price volatility, however, remained much lower than many of these assets during the period, meaning gold outperformed versus S&P 500 Total Return Index, the MSCI World ex US Index and S&P Goldman Sachs Commodities Index (S&P GSCI) on a risk-adjusted basis.
• In Q2 2010, the diversity of gold’s demand base, less driven by industrial uses as many other commodities, meant that gold was one of the best performing commodities. Oil fell by 9.1% and, similarly, metals with a greater degree of exposure to industrial cycles fell substantially: zinc, nickel and lead dropping by more than 20.0% quarter-on-quarter. Even platinum and palladium posted quarterly losses on the order of 6.7% and 7.9%, respectively.

Full report:

Comments

[funnyking]

Very bullish report, the most important part of the report in my opinion is "Bars and coins". Normaly q4 (Christmas) is the stronger than subsequent q1. This time we had a q1 stronger than q4!! 157 tonnes of gold from 134 tonnes sold on q4 2009.

And the winner is... China of course whit a record of 26.8 tonnes of gold (no Christmas addicted guys at all).

157x4 is 628tonnes... of gold in coin and bars.... lot of gold and on 12 august 2010 the islamic dhiram will be legal money in malaesya..

[Goldenballs]

Paper Gold drives the market not physical thats what the joke is .........................................................................................

[funnyking]

...paper gold, Saudi Arabi +180tonnes of gold in one quater...

[snowball777]

Suddenly, all that Au 'bling' hanging off the rappers necks and whatnot seems less like psychological compensation and more like a savvy investment strategy.

I can't wait to see John Paulson sporting a huge 'JP' medallion from a 1" thick gold rope.

[jbowman]

I lol'd

[Bow Tie]

buy physical, secure it, forget about it.

[Fortunes Favor]

Written July 30th

Bloomberg TV ran the above story yesterday morning, interviews were conducted and a consensus was formed. Based on this simple indicator I would say that Gold Prices bottomed yesterday at around $1159.  We will call this indicator the ‘Fin. TV’ indicator. You may recall how unbelievably accurate the Fin. TV indicator was in early July when identifying the equity market low.  I explained this phenomenon in the post titled , Stock Market Strategy: The More Things Change the More They Stay the Same . The bottom line of the explanation reads: “Rosenthal Investing Axiom: When CNBC et all call for imminent market demise expect instantaneous market rally.”

http://rosenthalcapital.com/blog/

[Bokkenrijder]

"A modest bout of profit taking in gold, in big part driven by hedge fund liquidations at the end of Q2, has pushed spot price by less than 7% from the all time high..."

Well, that is if you look at Gold in US$'s.

In Euro's the picture is a bit more depressing with the weakening of the Dollar...

[Charley]

+1

[Charley]

Three sure bets: the dollar must fall; gold must rise; all other currencies are probably toast...

Which is to say: gold's appreciation probably isn't about gold at all - nor about gold relative to the dollar - it is probably about the death of national currencies and the final triumph of the dollar. In an immediately globalized economy there is only room for one currency.

[Barmaher]

The World Gold Council recently made an investment in Bullionvault.com, as their technology and transparency is the best thing going in consumer gold today.

[senthil456]

There are certainly a lot of details like that to take into consideration.I read and understand the entire article and I really enjoyed it to be honest.
cheap vps | windows vps | forex vps