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Don’t Let The Recent Price Drop Fool You – US Retail Demand For Gold and Silver Sky-high!
A very decent job report for the month of January has crushed the gold price last Friday as the yellow metal lost more than $30 per ounce, sending it back to the lowest level in more than a month. Even though there was some support around the $1250 level, we fell right through it on the back of an allegedly good jobs report.
According to the official numbers, approximately 257,000 jobs were created in January but the attention was mainly drawn towards the upwards revision of the November and December numbers, where an additional 147,000 jobs were estimated to have been created. This had a major consequence as it meant that in 2014, more new job were created than any time in the previous 14 years. Theoretically, this sounds great, but the ‘number of jobs added’ does not necessarily improve the quality of life.
And indeed, the hourly salaries were still trending down until last December with a small bounce noticeable in January, but that’s absolutely not enough to get excited again, especially as the growth rate of the economy already seems to be slowing down again, and the expensive dollar will definitely hurt the trade balance of the USA as the total value of exported goods will very likely go down.
Additionally, now the oil price is still at extremely low levels, the total amount of onshore drill rigs in the USA is declining at a rapid pace and we wouldn’t be surprised to see the American economy losing jobs over the next few months which could make the Fed postpone its expected rate hike once again.
The appetite for gold in the Far East remains very strong as specialized website Bullionstar.com estimates another 255 tonnes (!) of gold were withdrawn which indicates January 2015 saw the strongest demand for gold ever in that region. This actually says a lot. Even though the gold price increased throughout the month of January the demand continued to increase as well and that’s quite remarkable.
It’s not just in Asia the demand is picking up, we are positively surprised by the demand for gold and silver American Eagles. In January, the US Mint sold 81,000 ounces of gold and in excess of 5.5 million ounces of silver. That’s massive and almost as much as the two previous months COMBINED! The gold demand was the highest since January last year and the demand for silver eagles almost broke the record of October last year when the Mint ran out of silver…
There’s zero doubt the deep pockets in Asia will be grateful for the most recent drop in the gold price and even in the West people and central banks are starting to wake up. As you all know, the Netherlands have already repatriated a large chunk of their New York-stored gold and Germany has also accelerated their repatriation schedule. The country brought 120 tonnes of gold back home of which 85 tonnes were shipped from the vault of the NY Fed. And this results in another question.
If Central Banks continue to publicly state that gold doesn’t have monetary value and that the total amount of gold it has on the balance sheet is irrelevant, why are they all so keen to bring their gold back home?
The retail demand for gold and silver is going up, as evidenced by the official production numbers of the US Mint and it looks like more people are getting prepared or the coming Apocalypse.
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Retail Demand For Gold and Silver Sky-high!
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If it is, then look out below.
There is precisely one class of investor that is always, _absolutely always_ wrong.
Retail.
Gold did a bubble until about USD 1,800 (don't know why, started before the financial crisis, and followed a long period between 250-450).
Bubbles burst - usually 1/3 quickly, next 1/3 (from the top) over time.
Gold did the first 1/3, to about 1,200 where it is now
(and _despite_ a real risk of a world-wide financial meltdown, which might increase demand for safe-haven assets).
So, waiting for the next 1/3 to about 600.
This will take a while, as the last big buyers weren't retail - actually central banks buying an asset at 100% with zero cost of funds.
Under those circumstances, CB's can't really be forced out, apart from political decisions when the electorate notice how much they have lost from their cost.
However, could happen: Swiss central bank profits shared with Cantons, so Cantons motivated to consider how much their budgets might get hurt by any second leg down.
The bubble-burst rule of '2/3 off from top' is actually pretty safe: Tokyo went from 40K -> 8K ie 80%.
You might want to think about that...
Watson
Gold would have to be a lot higher than 1800 to be in a bubble.
If Au goes to $600, what's in the ground will likely stay there for a while.
Fukit, just double down or triple down. If you're not guying AU/AG monthly (or weekly!) and averaging your costs then you aren't doing it right anyway.
One should have a fixed allocation from their paycheck to be used for PM's. If PM's get cheaper for awhile, cool, more quantity for the buyer for the same amount of fiat.
Another sale. So thank you paper pushers, I gladly BTFD.
I would have to say retail gold demand from mints is pretty much meaningless at this point. It is still not enough of anything to matter. 81,000 ounces of gold is less than 3 tons. That being said, the mints sell every ounce they mint. So we would need to see a wider cross section of retail products to get a good idea of true demand.
Retail silver demand, even only from what mints put out, can overturn the applecart. It takes nothing to buy up all the silver. A decent chunk of the yearly supply is put through government mints. Every ounce is consumed every year in some way.
When I look at paper, I always remember what is really going on. Banker traders are trying to get derivatives in the money. They will use vast amounts of client metal just to make or save a few bucks on derivatives. Then they replace that client metal with an accounting entry. We saw in that gold rigging article. They guy in the fix process had to use several tons of real client gold bars in a fix just to protect a swap position. Then he never bought that gold back. He turned it into a paper trade position for another desk. He didn't go back in on the next fix and return the gold. These guys use vast amounts of other people's resources and property to skim a very small amount of bonus cash or profit for themselves. But those resources they use are finite. It will end. You should not keep gold in a bank vault.
Ho hum. Nothing new. Carry on. My position remains the same and I haven't been wrong yet.
From somebody who started buying gold at $300 an ounce and silver at 10, I've finally learned that they own almost all of it (along with having the main share of everything else) and control the price. The only way I see a price discovery is if the Western banking system fails AND Asia won't play ball with them.
scams are why old is so popular.
covert.co.nr
"covert"
Your website:
covert.co.nr
Carries a virus (well trojan actually); you might want to look into it.
But for now, in case its a case of the ol' Hasbara Malicious, I've reported it to Zero Hedge; for the good of the Zero Hedge community.
ll be watching the prices Monday morning.....We'll see if the recent COMEX margin manipulaton has anymore downward leg for Ag.
Quite the point. The biggest dark pools in existence may very well be the central bankers'. "Price discovery" has the same connotations to them as "aliens hatching".
So, more importantly, how can we track what the insiders are buying? What are the circle-jerking cronies at the Fed doing, and telling their families to do?
If hyperinflation hits, tptb will raise taxes so most will be unable to pay their house taxes. There will be massive forclosures. It is unlikely those same ptb will accept your gold and silver at it's real value, expecially in blue states.
You can't eat gold and silver and when you try to exchange your gold and silver, for food, no one will accept your offer unless they have a lot of food, drink, meds, supplies etc to barter.
As prepared as we think we are, we're not.
If bankers get real estate taxes too high then there will be no buyers either. Bankers are more afraid of falling house prices such that they hold a $300,000 mortgage on a home worth $200,000 (because of high taxes).
And yes, prep supplies will be worth more than gold - under certain circumstances like a complete global collapse. But you hold PMs for the time when the dollar goes into the toilet (see Japan, Russia, Europe, etc). Not complete collapses but big currency devaluations. You also hold PMs for a return to commerce after a SHTF event. And in a unipolar SHTF event in just the US, PMs are the only thing that will get you safely to another country.
The banks collapse.
You only have paper currency - you might be OK for a few days.
You only have a debit card - you are immediately fucked.
You have PMs - no guarantee you will be OK, but almost certainly better than the previous 2
You have supplies? Keep it a secret.
You have useful skills - you will be in demand.
Yeah and they're going to throw everyone out of their houses,watch the bankers heads roll.
You expect sheep to become lions. It won't happen.
You can be sure mines are forward selling this last rally hard to lock in profits. They tend to shot us all in the foot.
Gold Bitchez....I pick up pennies
Don't pick up pennies,might hurt my back.Check out what a famous value invester said about his gold holdings...over 15%..
http://wealthtrack.com/
This make complete sense. Because when demand is "sky high" things often go down in price to meet that demand.
Ugh. Another shill article by a man/organization that needs people to continue buy the precious metals "paper" "physical" illusion.
The numbers are readily available on the US Mints website. Demand is down. You can cherry pick numbers from January 2014 and October... These numbers are meaningless when demand needs to be much higher to overcome the massive selling. The bubble is over.
FlacoGee, instead of fixating on the demand, train your eyes on supply, and remember, for the time being, the price of gold and silver is set in the paper markets where supply from time to time explodes higher as the bullion banks go naked short.
You think the US Treasury market is a non-manipulated market?
Type less, read more.
_ " ... to overcome the massive selling ..."
The massive selling of what?
"This make complete sense. Because when demand is "sky high" things often go down in price to meet that demand."
What online creationist-magic school did you go to?
So dich breath then wy did they set bands for gold and silver ? Go back to suckingenis Flaco.
It soesn't matter what the US Mint sells. It's a drop in the bucket compared to Asian demand. Get it while it's on sale and available or be left out forever.
Globally the ELITE (the REAL terrorists) as predicted, are PANICKING and getting fricking hysterical again.
They tend to do that WHEN THEY FEAR THAT THEIR ABILITY TO CONTINUE TO KEEP US ENSLAVED AND STEAL FROM US IS BEING THREATENED.
They own ALL of the Gold. They buy it with the paper money that they print themselves. They can sell Gold to each other for any price they want. They own all the mines, and they can pay their slave labor minimum wage in any country they want.
Starting to wake up yet?
Flaco you government troll...I'm surprised you didn't use the ad hominem more. that seems to be a favorite with moronic trolls who think they're on the right side. Unfortunately, you'll be flushed down the toilet with all the other morons once you're outlived your usefulness.
"when demand is sky high prices go down" What can one say to this, except maybe 'holy shit'?