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EU Gold Investment Demand Surges 135% - World Demand Up 6% in Q3 2011
From GoldCore
EU Gold Investment Demand Surges 135% - World Demand Up 6% in Q3 2011
Gold is trading at USD 1,759.10, EUR 1,305.60, GBP 1,116.30, CHF 1,618.20, JPY 135,390 and CNY 11,190 per ounce.
Gold’s London AM fix this morning was USD 1,756.00, GBP 1,115.70, and EUR 1,304.12 per ounce.
Yesterday's AM fix was USD 1,773.00, GBP 1,124.43, and EUR 1,311.49 per ounce.
Gold Demand Trends (Q3 2011) released today by the World Gold Council (see commentary) shows that investment and central bank demand for gold were key drivers of total gold demand last quarter. Third quarter gold demand increased 6% year on year to 1,053.9 tonnes with investment demand rising a significant 33% y/y to 468.1T.
Virtually all markets saw strong double-digit growth in demand for gold bars and coins. Investment demand in Europe surged 135% due to the deepening sovereign debt crisis.
Significantly, 390.5 tonnes of the 468.1 tonnes of investment demand went into physical bullion in the form of bars and coins.
ETF demand was 77 tonnes and nearly 50% of that was from European investors and institutions.
The increase in overall investment demand was quiet impressive considering the higher average price in the quarter and the price correction in September but not surprising given the scale of the global economic crisis.
A huge and paradigm shifting change in the gold market is central bank buying which rose 556% to 148.4T from 22.6T in Q3 last year. For the past 15 years there has been net selling of around 400 tonnes per annum from central banks.
Importantly, the World Gold Council can only identify about 40 to 50 tonnes of the 148.4 tonnes bought by central banks.
The WGC note that "additional purchases were made by a number of countries' central banks, which cannot currently be identified due to confidentiality restrictions". Central banks do not have to reveal immediately who purchasers are.
The World Gold Council’s Marcus Grubb told Bloomberg that “we can’t say who it is … we do not exactly know who the central banks are” but that they are likely “surplus countries” or creditor nations in “Latin America, Central Asia and the Far East.”
The fact that there is 100 tonnes of new central bank buying that is unaccounted for is not surprising to GoldCore and analysts who have long been saying that the People’s Bank of China and other central banks are likely continuing to quietly and gradually accumulate large quantities of bullion.
They are not declaring their purchases due to concerns that this may further devalue their currency reserves which are mostly in US dollars and also in euros and would result in them having to pay higher gold prices for their new gold reserves.
Central bank gold demand and unaccounted for central bank gold demand is very bullish for the gold market and has barely been reported on in the non specialist financial media.
Also of note was the fact that Chinese jewellery demand surpassed India – which has only happened in 4 quarters since January 2003. Chinese gold demand in the first 3 quarters is now already ahead of last year entire demand for 2010.
It is important to note that while the total gold demand figure of 1,053.9 tonnes in Q3, 2011 sounds like a lot, it is actually very small in investment, foreign exchange and financial terms as it is worth just $57.7 billion.
Total global investment assets are estimated to be over $200 trillion. Average daily turnover in global foreign exchange markets is estimated at over $4 trillion. Russia’s Sberbank, a bank many will not have heard of, has a market cap of $60 billion.
Gold remains a negligible part of the world’s investment and financial universe and remains under owned by savers, investors, institutions and central banks internationally.
This latest report which can be read here shows that this is changing but the increase in demand continues to be from a very low base.
Given gold’s proven risk mitigation, hedging and safe haven properties, it is likely that savers and investors will continue to seek protection from economic uncertainty.
This uncertainty shows no signs of abating and indeed appears to be set to deepen in the coming weeks and into 2012.
Scaring investors from diversifying into gold by comparing the gold market today to the 1970’s boom and bubble burst continues to be unfortunate and imprudent. It is a simplistic theory propagated by the biased and by those who have not bothered to inform themselves about the gold market.
NEWS
(Bloomberg) -- Gold Demand Advanced 6% in Third Quarter
http://www.bloomberg.com/news/2011-11-17/gold-demand-advanced-6-in-third...
(MarketWatch) -- World Gold Demand Up 6% in 3rd quarter
http://www.marketwatch.com/story/world-gold-demand-up-6-in-3rd-quarter-r...
(Financial Times) -- Central Banks’ Gold Buying at 40-Year High
http://www.ft.com/intl/cms/s/0/c0025500-10ef-11e1-a95c-00144feabdc0.html...
(Economic Times) -- China surpasses India in demand for gold jewellery: World Gold Council
http://economictimes.indiatimes.com/markets/commodities/gold-industry-up...
(Business Week) -- Gold Top Pick at Morgan Stanley as Europe Debt Spurs Demand BusinessWeek
http://www.businessweek.com/news/2011-11-17/gold-top-pick-at-morgan-stan...
COMMENTARY
(Forbes) -- Is GLD Really As Good As Gold?
http://www.forbes.com/sites/afontevecchia/2011/11/15/is-gld-really-as-go...
(Conservative Home) -- Euro Printing: Welcome to the President Mugabe School of Economics
http://conservativehome.blogs.com/platform/2011/11/euro-printing-welcome...
(Money Week) -- Bill Bonner: Insiders Own the Game
http://www.moneyweek.com/news-and-charts/economics/global/bill-bonner-in...
(World Gold Council) -- Gold Demand Trends (Q3 2011)
https://www.goldcore.com/research/wgc-gold-demand-trends-third-quarter-2...
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That pension chart changes to much more orange in the next three years I bet. The Kyle Bass point of view about the world is spreading like a Texas brush fire.
nope it won't. first, value creation for their beneficiaries is not exactly what they are after. 2nd, pension funds earn nth on gold, they cannot use it further. 3rd, political pressure will keep them funneling their assets into hopeless companies.
pension funds are the primary sheeps that are fucked from behind by banks. banks will fight hard to keep them that way.
Plus a lot of managers are restricted in what they can hold. This has been in the cards for a very long time.
The world is demanding more gold
At least this is what I've been told
But prices are falling???
Is sanity stalling?
Or is paper Au being sold...
The fact that there is 100 tonnes of new central bank buying that is unaccounted for is not surprising to GoldCore and analysts who have long been saying that the People’s Bank of China and other central banks are likely continuing to quietly and gradually accumulate large quantities of bullion.
This is why we had to depose Qaddafi; he "had" 150 tonnes, and the West needed it to control the price for a few more days.
Well, at least we are allowing Hugo Chavez a few more months of life. Serves him right for wanting Venezuela's gold to be repatriated.
"pension funds are the primary sheeps that are fucked from behind by banks."
Yep. But you want to milk them, not slaughter them. Thus the "unnecessarily slow dipping mechanism".
GeneMarchbanks
Gene, it won't change much.(going down in FLAMES).
Pension funds are as we know about ,commisions, and equities.
I do not know of any company pension funds that offer any exposure to ANY PM's.
And, it's planned that way. Can't use PM's to make money off of,selling you stocks in them.
Too complicated for my stupid brain... Just listen to Olivia Newton friggin John and get physical... bitchez!
Tradition bitchez!
Traditon......hot potato and musical chairs.
But but it takes only 5$ to get it out of the ground!
Yeah....but there is that $35 dollar finders fee.
http://business.financialpost.com/2011/11/16/wealthy-italians-greeks-pour-money-into-london-property/
If that is true, it's a bad idea.
not pnly bad, but also very very stupid. on the other hand, does it matter where they lose their money?
very, very stupid idea indeed. They could instead buy 6-7 apartments in Berlin ( for the price of 1 in London ) that yield 6/7 %, that are potentially going to be priced in Neue DM soon. Or buy some PM at prices still held low thanks to the FED'S manipulations.
This Bullard is so full of shit, he might even surpass Bernanke!
It's all for public consumption, my friend. Keep the sheep hopeful that they'll escape with no pain.
No need to move, no need to think, just stay in line and watch TV.
What we need is a super-fed commititee.. let's put the Bulltard in charge. It's taking too long to get back to a gold standard.
They are raiding it today.....makes me laugh...but gold and silver have been flat for a few weeks now...with all the bank and soverign problems I would think it would have doubled by now.....people are realizing that PM´s are the only real currency....and who knows what fiat will be around in 5 years let alone how much of it will be around...a Greece 100 year bond....NOT...gold bullion...YES
So take note and be a raider yourself....beats wiping away lice on OWS.
All the remaining margin hikes are being saved for something. If not this, then what? Keep your powder dry folks, big opportunities coming. Maybe not another $1534 plunge, but I'd be surprised if we don't touch $1580.
What you propose is quite similar to what I've been waiting on for a few weeks. Standing fast until I see that line cross the 30dma. Not sure if it's gonna get that low, I only hope.
I have a simple way to BTFD for PMs. Watch the APMEX top 40 and buy when products are stocking-out across the board. Thus, Henry's Paradox: The price is good when there is none available to buy.
Using this method, I bought PMs on 2/5/10 and 1/26/11, which turned out to be nice dip bottoms. I don't usually have extra cash lying around for PMs, but I am in position now to do something.
This is not an endorsement for APMEX, but their website is great for this purpose. Also check out what Turd has to say over at tfmetalsreport.com.
Henry, I hear that Nov. 22nd is the day that a big drop is coming. Do your tea leaves agree?
No. What is the significance of Nov 22 and where did you hear about it?
I don't try to time future events or have confidence in those who do. I have cash available for PMs now. Based on past trends and current events, I will try to get as much physical as possible with the money at hand during next month or so and not look back. Once I have it, the stuff is just going to sit there 'forever' anyway. Turd is good at spotting trends, but I don't know of any great forecasters timing wise.
And yet the futures market is vomiting all over gold and silver again today.
Silver getting kicked down stairs. Just look at it as a blessing and BTFD.
I shop from four(!) different dealers in Germany. You know how much they lowered the price since this 1,5 USD takedown?
10 cents!!! The bullion dealers here have smartened up and don't really care anymore about these paper raids.
You can bet the ones orchestrating these raids are watching the vendors too, looking for evidence of the decoupling that you are seeing. It seized up the gold market at $1534, and that's why it bounched back up over $1600. You can bet they won't risk a foray too far below $1600. (This is a rear guard action, they can't win, only slow it down).
the UPMOVE that everyone was expecting out of this triangle cannot be ruled out ::
http://markettechnicals-jonak.blogspot.com/
I will buy at the open...I have been for the last wo weeks.....nothing I see is looking rosy out there....I see either printing to the moon...70% chance...or default....a 30% chance......and the super committee will be a smoke an mirrors deal with savings in 10 years......
Blood in the water. PM price manipulation in full swing. BTFD
if they are going to manipulate it I wish they would kick the shit out of it. Get silver down to 20 bucks and gold down to 1000. This range is annoying.
I still don't understand why physical is the only way to buy. What is wrong with buying GLD and SLV shares (aside from nominal maint fee)? Us commoners have no safe place to store gold bars.
I assume that by "Us" you mean "U.S." in which case you're a lucky bunch. Atleast you've got the right to bear arms, here in the EU we've got the same criminals running the show and the people running around naked waving their pricks at each other. If on the other hand by "Us" you really mean "Us, the customer" than by all means get a waterproof ammo can or a otterbox and let your imagination go wild. Dump it overboard, bury it, build it into a wall or something. Hell someone had an idea about putting it in a septic tank which I really thought was smart. I would suggest you put some mace spay or a firearm in the box as well. Just in case you were ever forced to access your stash. I'm paranoid.
I am a U.S. citizen. And by "We commoners", I meant I don't live in a castle with an armory. Yeah I suppose I could bury bars in the woods at midnight. But would still like to know the downside of buying GLD and SLV shares. Is it that some people think we're headed for another stone age and you'll never be able to redeem electronic shares? Or does it have to do with the shares being denominated in US dollars?
Counter-party risk. (a) that they audit, and (b) that there is not enough gold or silver in the world to back the shares. So, you are likely buying paper with no value or worth. When the masses realize this, there will be an exodus from gld and slv. You're also missing out on one of the best properties of gold--barter power. Good luck bartering with shares of gld. Not a gold bug here or trying to rain on your parade. Invest in gld all you want. Just answering your question.
Thanks to all that have posted replies. I appreciate the info. The GLD perspectus says they have physical bars parked in some fortress in England to cover all shares. But of course, those are salesman words. So who knows. I guess it comes down to a Belief System. And my Belief is in short supply these days.
No problem.
My view is this: if there is one investment that eliminates all counter-party risk, at least own some of it. Better I am wrong than someone swindles me. No? Even if I am wrong, I am left holding...gold! That's not a bad position to be in. Only possible negative outcome is I could have owned more gold.
In this environment 20% of wealth in PMs seems reasonable. 10% if you can't handle PM volatility.
You are right, GLD does claim to own the shares and have independent audits. That is counter-party risk. Folks at MF Global thought everything was peachy, until it wasn't.
If you buy, use a good dealer and purchase bullion.
The number one rule in securing your gold bars, should you go down that path, is to not tell anyone about it. And by that I mean Anyone. That might even include your spouse. For years I've been keeping a secret fund from her for just in case of an emergency. Unless you've got a Porche parked in your driveway, secrecy alone reduces your risk considerably. Above that, buy the bars in person with cash, no personal information given. I won't go into SLV and GLD shares as I have no experience with either. Cheers.
I can see one problem. What if you die unexpectedly and quickly before you can reveal where your hoard is? I'm presuming that means holding the secret in a will which is itself secured somewhere? Just curious.
A truecrypted SD card with intricate instructions (lawyer #1) unlockable with the password provided by (lawyer #2). I personally think this is the best option.
-or same thing only less techie-
Two separate letters at different lawyers. One tells you what you're looking for. The other tells you where it is in words only a spouse could understand.
-or-
You tell one person you can trust and is not a family member. If you have a friend that you trust and he or she shares your investments strategies, especially into PMs, it's only natural for you to be each others keepers and safeguards.
GLD and SLV are paper products - there most likely is zero (or very little) precious metals backing them up. If you want to "trade" the price of gold and siver, then trade away. If you are buying gold and silver because you think the system may fail, get the real stuff (and buy it with cash ).
GLD and SLV have problems like tax treatment as physical with higher capital gains. I trade/hold GLD and SLV in an IRA account, so taxes aren't a factor. This is a cheap and convenient way to participate in the run-up in PM prices. I consider these positions risky investments like a single company stock that could be wiped out overnight. There are valid concerns that the physical metal backing the shares don't add up to enought to pay everyone invested. The administrative costs are covered by selling a portions of the stash, maybe about 1% per year, which means in a hundred years or so, the stash should be gone and the shares should have no value. Thus, GLD and SLV lean heavily on the greater fool theory.
Some people advocate dumping the IRA, taking the penalty, buying and taking delivery of physical PMs. That has worked out well for many.
Holding physical has risks of loss or theft. Transaction and storage costs are high. PMs could well be confiscated and outlawed in a currency collapse.
The solution is to diversify. Don't keep all your wealth in one class of investment. Don't keep all of your PMs in one place.
Speaking of diversity, does anyone know of a good corporate bond fund?
@ Gief Gold Plox, right on. I would add that you bury some large chains in lengths and coiled, as well as other false positives that metal detectors might pick up, bury your stash deeper than the chains/metals.
In America, I would just look under the bath tub in the front yard.
GLD and SLV have issues.
No, GLD and SLV have problems.
"Issues" are topics of discussion, NOT problems!
Alex Kintner
Alex, can you afford to buy a 400oz bar?(Gold).If so great,still would not do it.
A 1000oz bar + of Silver?.
Unless you can you cannot take delivery of the metals from these SO called ETF's.
Read their fine print. Every one I have seen have clauses that require you to buy those amounts IF you want physical delivery,or they contractually have the right to pay you with fiat..
YOU commoners, best find a place to hide it, and it's not hard to hide 100-200k in 1oz coins.
Because IF you cant hold it, you really do not own it.
1. You either believe there is price manipulation in gold or you do not
2. If so, you will note that the manipulation is timed to run counter to bad economic developments
3. Knowing this, why buy gold when economic events that should make it go up in price always invite the smack down?
Wait for the smack down to run its course and buy. Don't try to pick the one time the manipulators run out of steam and fail. That's a very expensive game. The worse the news, the more likely they are to use a margin hike. Why stand in the way of that? The smart money and strong hands will stand aside.
I am staying away from further purchases of PM. I believe major holders will be forced to liquidate PM as they have to cover FIAT issues in the coming weeks. That will be my time to double down.
Yes, a large cash position just waiting in case there is a huge liquidation and a large physical position accumulated on the way up. The game is to convince non-pm bugs that gold and silver are a bad investment, and to get the PM bugs to trade. The solution for PM bugs is slow accumulation and incredibly patient trading.
Waiting for the european investment demand numbers from silver..
You gotta hand it to the boyz. The biggest financial crisis and confidence crisis in monetary assets since probably ever is in progress and they manage to smack down the price of gold day after day. Amazing.
... and as a stacker, I thank them.
Not mentioned is that unemployment, low interest rates, and inflation is driving millions of people to unload their gold jewelry to buy food. A staggering amount of gold is coming in through pawn shops and gold-for-cash outfits. I guess that the net result is the gold is going from the poor to the rich.
Stuck, have you got a link for that pawn-shop and cash-for-gold trend? Just curious how much business those places are really doing.
Here are two references:
http://www.free-bullion-investment-guide.com/gold-supply-and-demand.html
http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHtm...
Yes, but people with money are buying it up. Zero sum.
Gold is down because the stock market has been down and the dollar up. Margin calls + strong dollar. Also, it shot up quickly, which invited many shorts near the 1800 resistance. Consolidation period here imo.
So, gold demand up big and price down big. Wow ... I wish iPads would sell, that would bring the price down big ... and imagine houses. If everybody wanted to live in a house, price would crash ... well, that is if the iPad and housing markets were manipulated as much as the gold market.
In the meantime, I need to find $15,000,000,000,000 ...
Arrrrgh! Scurvy running dog imperialist lackeys are shaking the PM trees and it's working?!? Arrgh!
BTFD and relax. Reality comes home, sooner or later. Gold is holding up very well considering the pressure. Silver- well, it's always melodramatic. It neither shits nor does it eat, so it can stay.