trend, page-30

The following story at first appears bearish in its headline, but is bullish for gold;

“China Gold Association Forecasts 17% Drop In 1Q Gold Demand, Annual Demand Steady – HSBC
Tuesday March 11, 2014 8:22 AM
China Gold Association says gold demand may fall 17%, to 250 metric tons, in the first quarter of 2014, versus 300 tons in the first quarter of 2013, HSBC says, citing a Bloomberg News story. In the Bloomberg story, Zhang Yongtao, CGA’s vice chairman, said 2014 annual demand is forecast to be unchanged at 1,176 tons versus 2013, and 2014 annual mine supply is expected to remain mostly unchanged at 428 tons versus 2013, HSBC says. “A simple math calculation based on Mr. Zhang’s forecast would indicate that China’s gold demand should be stronger for the rest of 2014 after 1Q, when compared to the same period in 2013. This may indicate that China’s strong appetite for gold is likely to be sustained well into 2014, in our view,” HSBC adds.”

http://www.kitco.com/news/2014-03-11/KitcoNewsMarketNuggets-March-11.html

This is interesting; 1Q is almost over and the POG has been in a steady and reasonably strong uptrend despite the China Gold Association forecasting a 17% drop in Chinese demand. If it has been trending higher with Chinese demand down 17% on Q1 2014 then that is a positive on rest of world demand especially with India still restricting imports. FY 2014 Chinese demand is forecast to be steady but with Q1 down, then the rest of 2014 demand would have to be higher than last years 2nd, 3rd and 4th qtrs. Couple that with the possibility that Indian restrictions may be significantly eased from as early as this month and we may be in for a strong rest of the year demand for gold. It also appears that ETF’s have now completely dried up on the heavy amount of gold that they were supplying last year (around 900t). Even with steady demand this year (if India does not ease for example) what will cover the 900t shortfall if ETF’s do continue to hold their gold this year?

“If the Indian government eases these restrictions in the end March budget seven days ahead of the elections (and we expect they will), will it cause a jump in demand from the London market –where India sources its gold from—sufficient to send the gold price soaring?”

http://www.mining.com/web/renewed-indian-demand-driving-gold-prices-higher/

I still see most gold producers as struggling so I am more bullish on gold than I am on most producers until the POG moves much higher. I can see a few exceptions.
I do think ABU may currently be held back on its removal from the all ords but that will be a short term issue.