Wednesday, March 20, 2013

Does supply and demand dynamics of gold exist?

We have seen a steady increase in demand for physical gold, yet we have seen  lower prices in the past few months.

Where is the demand coming from?
- India and China are strong buyers
- Central banks are currently net buyers from being sellers
- ETPs around the world, institutions and private investors continue to add to their gold hoards

Supply?
-Annual supply of gold has stayed flat at approximately 4,000 tonnes and comes from new mine production, scrap gold recycling and investor disposition of bullion.

In a recent article by Eric Sprott, the evidence pointing towards the suppression of the gold price is provided. Please see SPROTT ASSET MANAGEMENT

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