Gold ETF Sales Dwarfed By Central Bank, Jewellery, Coin and Bar Demand

IMG Auteur
Published : May 24th, 2013
859 words - Reading time : 2 - 3 minutes
( 0 vote, 0/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Market Analysis

Today’s AM fix was USD 1,385.25, EUR 1,068.95 and GBP 917.81 per ounce.  
Yesterday’s AM fix was USD 1,386.00, EUR 1,074.92 and GBP 919.16 per ounce. 

Gold climbed $24.80 or 1.78% yesterday to $1,392.00/oz and silver finished up 0.16%. 

After a volatile and momentous week for global markets, gold and silver look set to finish higher in all currencies and have their best week in a month.


Cross Currency Table – (Bloomberg)

Holdings in gold exchange-traded funds fell to fresh four-year lows yesterday but demand from central banks for bullion coins and bars, plus store of wealth jewellery demand is supporting gold.

SPDR Gold Trust, the world's largest exchange-traded gold fund, said its holdings fell 0.15% to four-year lows of 1,018.57 tonnes on Thursday.

Gold held by gold-backed ETFs, which in 2012 accounted for just 6% of the world's gold demand, fell by 177 tonnes in the first quarter according to the World Gold Council data.

ETF demand is just one facet of the broad based global demand that gold enjoys today and this fact continues to be not fully appreciated by many market participants who are tending to focus on falling ETF demand and liquidation to the exclusion of all else.

In the first quarter alone, central banks acquired 109 tonnes of gold – the seventh consecutive quarter of central bank gold accumulation.

Central Banks Diversifying Into Gold Bullion “As Prices Fall”
Central banks are continuing to diversify into gold due to significant systemic and monetary risk and many will use the recent price weakness as an opportunity to diversify into gold at cheaper prices.


Gold, 5 Min, May 20-24 2013 – (Bloomberg)

The Deputy Governor of the South African central bank, South African Reserve Bank, Daniel Mminele, said yesterday that central banks are “buying bullion” “as prices fall” to reach a 10% ratio of overall foreign exchange reserves – according to Bloomberg.

The South African Reserve Bank said it’s “comfortable” with its holdings of gold and doesn’t have plans to boost gold reserves because they already make up about 10% of foreign reserves.

South Africa’s central bank holds four million ounces of gold bullion.

Referring to the very low levels of gold owned by creditor nation central banks with massive foreign exchange and in particular dollar reserves such as China, the Deputy Governor said “some of these central banks would come off very low levels and are looking at getting to levels of around 10% of holdings in gold and we’re already there.”

Gold ETF Liquidations Dwarfed By Global Central Bank, Jewellery and Coin and Bar Demand
Jewelry demand has also picked up and total jewellery demand was up 12% year-on-year in the first quarter, driven in the main by Asian markets.  

Asian buyers tend to be value buyers and like buying on weakness. Their demand is not for jewelry as a fashion accessory but rather as a store of wealth to protect from bank and currency risk. 

Jewellery demand in China was up 19% on the same period last year and stood at a record 185 tonnes.

Interestingly, demand for jewellery in China alone at 185 tonnes and central banks demand at 109 tonnes equals 294 tonnes of demand for physical gold bullion which is much greater than the fall in ETF demand of just 177 tonnes.

This 294 tonnes of demand does not include global jewellery demand, excluding China, coin and bar demand globally, investment demand for digital gold, allocated gold demand and storage.

With regards to global jewellery demand in the first quarter, demand in both India and the Middle East was up 15% respectively and in the US, demand showed a significant increase, 6%, for the first time since 2005. 

Demand in both India and the Middle East was up 15% respectively and in the US, demand showed a significant increase, 6%, for the first time since 2005.

Demand for gold in China and India was also driven by an increase in bar and coin sales - up 22% year-on-year in China and 52% in India. In the US demand for bars and coins was up 43% compared with the same quarter in 2012. Globally, bar investment was up 8% while official coins (such as American Eagles and Canadian Maple Leafs) were up 18%.


Silver, 5 Min, May 20-24 2013 – (Bloomberg)

The fundamentals of the gold, and indeed of the silver, market remain as sound as ever and will reward those with an allocation to physical bullion – either in allocated accounts or in one’s possession.

NEWS

Gold Traders Most Bullish in a Month After Bernanke - Bloomberg

Gold edges lower on stronger dollar, stocks - Reuters

Yuan Gold Trade in Hong Kong Triples as Currency Gains Cut Risk – Bloomberg

South African Reserve Bank 'Comfortable’ With Gold Holdings - Bloomberg

COMMENTARY
Gold Deliveries Delayed In London – King World News

Faber: Central Banks Should Be Manipulating Gold Higher, Not Lower – Financial Sense

"Keep Your Cash Out of the Bank" – You Tube

Fort Knox, Fort Hocks or Fort Shocks: Three United States Gold Scenarios – 24HGold

For breaking news and commentary on financial markets and gold, follow us on Twitter.

Data and Statistics for these countries : China | Hong Kong | India | South Africa | All
Gold and Silver Prices for these countries : China | Hong Kong | India | South Africa | All
<< Previous article
Rate : Average note :0 (0 vote)
>> Next article
Mark O'Byrne is executive and research director of www.GoldCore.com which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth.
WebsiteSubscribe to his services
Comments closed
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
What kind of person runs for public office ?
17 OctThemis
I liked the use of the self-actualization chart within the context of politicians and their motives. It probably applies to many in Hollywood as w...
The Silliness of the Bretton Woods Years
16 OctThe Recusant
KUDOS! The book is anti-gold slanted throughout and subtly mocks those that value gold as seen in that silly Las Vegas Golden Rooster tale. As I pr...
The Future (Not)
14 OctS W.-1
I have it on good authority that the Aliens living in Antarctica have discovered a way of turning Ice into Oil. All we have to do to secure ou...
Betrayal!
09 OctThemis1
I agree 100% with all the points you made. You have summarized my own anger and the reasons for it. My only consolation is that I believe the eli...
A silver price-suppression theory gets debunked
07 OctDoom
I think he linked the wrong article, because there's minimal facts and logic there relevant to price suppression. It's a shame, because I really wo...
Light It Up
07 OctThemis
I keep wondering whether the US is fermenting a war with North Korea so as to indirectly draw China in and delay implementation of the yuan-for-oil...
One Nation Under Gold (2017), by James Ledbetter
05 OctThe Recusant1
Sadly, I too hoped for a more even-handed assessment of gold in our economic history. The book IS biased and by the time I got to the 20th century ...
Fall of the Great Pumpkin
03 OctGypsy0
James, you've mentioned this 25th Amendment thing a few times. The primary reason the Deep State won't go that route is: when the attempt begins i...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS