Attached are the stats on gold supply/demand. Remember how only recently we were told by some of the large investment banks the POG will continue to drop because of “weak fundamentals” of continuing ETF outflows? Those ETF outflows (402.2t) were outpaced by investor demand for bars and coins (507.6t) - So much for weak fundamentals caused by investor selling. The net investor supply actually ended up being a net demand for 105.4t instead of a supply! That demand was stronger than central bank net demand of 71.1t. Jewellery (fabrication) demand was 593.1t. Technology demand was 104.3t. So what will happen when ETF supply continues to slow, stops or even reverses to a net demand again? Clearly there will be much less gold available to meet current demand and prices will have to rise significantly to either reduce demand for bars, coins and jewellery or to allow mine supply to increase to meet the demand although this supply response will be slow and will require much higher prices considering global cost of production. The fundamental picture appears strong not weak as some of the investment banks tell us. Little wonder gold is having a V-shaped recovery (which we were also told would not happen).
ABU Price at posting:
3.5¢ Sentiment: Buy Disclosure: Held
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