Click here for the Gold Investing Profits Blueprint, a must-have report for investing in gold stocks
Click here to learn how to buy physical Gold and Silver
LONDON: Gold demand is being lifted this year by a recovery in jewellery buying in the key Indian market, and robust growth in Chinese gold consumption, the World Gold Council said on Wednesday.
Releasing its third-quarter Gold Demand Trends report, which showed a 12 per cent year-on-year rise in gold demand in the third quarter, the WGC said jewellery consumption in particular looked set to improve on last year's level.
"The main drivers for this year are the impact of the Indian and Chinese markets," said the WGC's research manager Eily Ong. "In 2010 in total, jewellery demand could actually exceed that of 2009."
Concerns over the global economic outlook and currency market stability have supported investment in gold this year, helping it to a record $1,424.10 an ounce last week. But identifiable investment levels are below 2009's stellar levels.
Investment demand almost halved in the third quarter from the previous three months, during which concerns over euro zone sovereign debt levels fuelled a surge in investment in bullion.
But Ong said jitters remain in the wider financial markets, caused by measures such as the United States' quantitative easing policy announced earlier this month, which could still lead to another jump in investment.
"If there is continuing uncertainty over the impact of QE2 and uncertainty over what is happening with the Asian market -- whether they will continue to tighten policy, or whether whatever they are doing now will succeed in curbing inflation -- we could probably see what we saw in Q2 again," said Ong.
"There could be more investors allocating their assets into gold as a store of value, and for capital preservation."
Demand for investment products such as gold exchange-traded funds softened in the third quarter. ETF demand was down 7 per cent year-on-year to 38.7 tonnes, less than a seventh of the "exceptional" flows seen in the second quarter.
INDIA BUYS
But other forms of demand rose. Jewellery buying climbed 8 per cent to 529.8 tonnes in the last quarter, accounting for 57 per cent of total demand. In the second quarter jewellery buying accounted for just 40 per cent of overall consumption.
India bought nearly 50 tonnes, or 36 per cent, more gold jewellery in the third quarter than in the same period of the previous year, bringing its jewellery consumption in the quarter to 184.5 tonnes.
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Saturday, March 12, 2011
Gold Demand: India & China Jump to Unbelievable New Records
Click here for the Gold Investing Profits Blueprint, a must-have report for investing in gold stocks
Click here to learn how to buy physical Gold and Silver
By Adrian Ash
Forget central banks and Western "haven" demand. Indian and Chinese households drove 2010's surge in gold demand...
PENSION SAVERS and investors hoping to defend their standard of living as global incomes converge, take note, advises Adrian Ash at BullionVault.
Ten, even five years ago and less, precious-metals analysts thought rising incomes in Asia would see gold substituted for other financial services or consumer goods. But no. China's private demand has more than doubled as a proportion of gross household savings. Based on the World Gold Council's latest data – issued today in the market-development and research group's new Gold Demand Trends report – India's private consumption jumped in 2010 to a new all-time record of more than 963 tonnes.
That volume beggars belief. It's equal to 2.65% of GDP on the International Monetary Fund estimate. On BullionVault's own analysis, it equated to more than 11.5% of India's gross household savings.
Yes, the WGC's data are subject to revision, of course, and they can only ever be an estimate.
But for Western savers hoping to defend their standard of living, it's plain commonsense to consider buying a little of what Asian households are using to store ever more of their fast-growing wealth.
You can forget about central banks impacting the market – net gold buyers in 2010 though they were, as a group, for the first time in two decades. Don't dwell on "safe-haven" Western demand either...other than to note how new Gold ETF demand and "unallocated" trading in the wholesale, off-exchange market both slipped 45% from 2009's record highs, while coin and bar demand surged worldwide. Because Indian and Chinese households are the knock-out story from 2010's data. The world's two most populous nations, its fastest-growing major economies, and numbers one and two for physical gold buying, both India and China set new records for private gold demand by value and volume in full-year 2010. On our reading of the new World Gold Council data, per capita consumption also set fresh records in the top two demand countries.
How come? Just as in gold's developed-world bull market of the 1970s, rising inflation and sub-zero real rates of interest are setting the pace. Productivity and real household wages are rising, however, in sharp contrast to the economic path which the rich West took four decades ago. So Asia's deep love of gold – and ever-deepening pockets – suggests perhaps a different path from the post-bubble slump which gold prices suffered as Western economies recovered and grew during the 1980s and '90s. Because emerging Asia buys gold when times are good.
Developed-world Gold Investment rose amid the financial crisis starting 2007, even as world jewelry demand sank. Emerging Asia tempered and even reversed its buying as global GDP turned down, with private consumers in India – a net importer every year since the Great Depression (the world's No.1 consumer has got virtually no domestic mine output) – actually becoming net exporters of gold in the first quarter of 2009.
The economic rebound, so much more pronounced in emerging Asia than the rich West, has seen those trends switch over. Because even with the Eurozone deficit crises driving a jump in physical demand for Gold Bars and coin (particularly in Germany), net demand for new units of gold ETF shares actually slipped 45% from 2009's record. So too did "unallocated" trading in London's wholesale market.
You've got to go a long way to over-state the strength of physical gold demand in 2010. The Dollar price rose 26%, but total global demand still grew 9% by volume, hitting its highest tonnage since the long bear market of the 1980s and '90s hit rock-bottom in 2000.
Gold then averaged $279 per ounce, rather than 2010's average of $1224. Yet in tonnage terms, global physical demand – led by emerging Asia's big giants – was like the bull run hadn't even got started.
A Must-Have Report for Buying Gold Stocks
Learn How to Buy Gold Below Spot Prices
Click here to learn how to buy physical Gold and Silver
By Adrian Ash
Forget central banks and Western "haven" demand. Indian and Chinese households drove 2010's surge in gold demand...
PENSION SAVERS and investors hoping to defend their standard of living as global incomes converge, take note, advises Adrian Ash at BullionVault.
Ten, even five years ago and less, precious-metals analysts thought rising incomes in Asia would see gold substituted for other financial services or consumer goods. But no. China's private demand has more than doubled as a proportion of gross household savings. Based on the World Gold Council's latest data – issued today in the market-development and research group's new Gold Demand Trends report – India's private consumption jumped in 2010 to a new all-time record of more than 963 tonnes.
That volume beggars belief. It's equal to 2.65% of GDP on the International Monetary Fund estimate. On BullionVault's own analysis, it equated to more than 11.5% of India's gross household savings.
Yes, the WGC's data are subject to revision, of course, and they can only ever be an estimate.
But for Western savers hoping to defend their standard of living, it's plain commonsense to consider buying a little of what Asian households are using to store ever more of their fast-growing wealth.
You can forget about central banks impacting the market – net gold buyers in 2010 though they were, as a group, for the first time in two decades. Don't dwell on "safe-haven" Western demand either...other than to note how new Gold ETF demand and "unallocated" trading in the wholesale, off-exchange market both slipped 45% from 2009's record highs, while coin and bar demand surged worldwide. Because Indian and Chinese households are the knock-out story from 2010's data. The world's two most populous nations, its fastest-growing major economies, and numbers one and two for physical gold buying, both India and China set new records for private gold demand by value and volume in full-year 2010. On our reading of the new World Gold Council data, per capita consumption also set fresh records in the top two demand countries.
How come? Just as in gold's developed-world bull market of the 1970s, rising inflation and sub-zero real rates of interest are setting the pace. Productivity and real household wages are rising, however, in sharp contrast to the economic path which the rich West took four decades ago. So Asia's deep love of gold – and ever-deepening pockets – suggests perhaps a different path from the post-bubble slump which gold prices suffered as Western economies recovered and grew during the 1980s and '90s. Because emerging Asia buys gold when times are good.
Developed-world Gold Investment rose amid the financial crisis starting 2007, even as world jewelry demand sank. Emerging Asia tempered and even reversed its buying as global GDP turned down, with private consumers in India – a net importer every year since the Great Depression (the world's No.1 consumer has got virtually no domestic mine output) – actually becoming net exporters of gold in the first quarter of 2009.
The economic rebound, so much more pronounced in emerging Asia than the rich West, has seen those trends switch over. Because even with the Eurozone deficit crises driving a jump in physical demand for Gold Bars and coin (particularly in Germany), net demand for new units of gold ETF shares actually slipped 45% from 2009's record. So too did "unallocated" trading in London's wholesale market.
You've got to go a long way to over-state the strength of physical gold demand in 2010. The Dollar price rose 26%, but total global demand still grew 9% by volume, hitting its highest tonnage since the long bear market of the 1980s and '90s hit rock-bottom in 2000.
Gold then averaged $279 per ounce, rather than 2010's average of $1224. Yet in tonnage terms, global physical demand – led by emerging Asia's big giants – was like the bull run hadn't even got started.
A Must-Have Report for Buying Gold Stocks
Learn How to Buy Gold Below Spot Prices
Sunday, February 6, 2011
How to Buy Gold and Silver
There are a lot of people interested in buying Gold and Silver out there who may not know how to go about buying the physical metals. Many people end up settling for ETFs like GLD or try to trade them on the futures market. There's a lot of issues with doing this as the prices of gold and silver skyrocket, the ETFs could be exposed as not having enough of the physical metal to back them up and the short sides to any futures contracts will end up defaulting on their end of the trade.To truly protect yourself you have to get the physical metal. This essential course will teach you how to do so, as well as other important functions like how to safely store your gold and silver.
Click here for the Gold and Silver Secrets
Here are some great books and resources for investing in gold and silver:
Click here for the Gold and Silver Secrets
Here are some great books and resources for investing in gold and silver:
Investors’ $102 Billion Metals Wager Showing Bull Market Intact
Click here for the Gold Investing Profits Blueprint, a must-have report for investing in gold stocks
After the worst January for precious metals in two decades, investors still have a $102 billion bet on higher prices, hoarding more gold than all but four central banks and more silver than the U.S. can mine in almost 12 years.
The five analysts ranked by Bloomberg as the most accurate over two years expect silver to rise as much as 24 percent before the end of 2011 and gold 20 percent, the median of their estimates show. UBS AG predicts the strongest industrial demand for silver since at least 1990 and the second-highest sales of exchange-traded gold products on record.
The decade-long surge in gold attracted fund managers from John Paulson to George Soros and is now spurring central banks to add to their reserves for the first time in a generation. Once written off as demand for photographic film waned, silver found new uses in everything from solar panels to plasma screens, making it the precious metal most used in industry. As stocks rose 9 percent and Treasuries returned 67 percent since the end of 2000, gold surged fivefold and silver sixfold.
“I had to chuckle when I saw reports that it was over for gold,” said Michael Cuggino, who helps manage $10 billion at Permanent Portfolio Funds in San Francisco, and has about 20 percent of his assets in gold. “Some investors have taken money off the table after a significant run-up in 2010. If you look at the macro environment, the instability around the world, the worldwide currency devaluation, these factors all bode well.”
The Standard & Poor’s GSCI Precious Metals Index dropped 6.5 percent in January, the most for the month since 1991. Gold traded in London retreated 6.2 percent and silver 9.3 percent.
Monthly Slumps
Gold has had bigger monthly slumps four times in the last decade and plunged 34 percent from March to October 2008, before jumping 47 percent in the following four months. Silver posted larger monthly declines nine times over the same period and plummeted 57 percent over three months in 2008. It rallied 73 percent in the next four months.
Silver will climb as high as $36 an ounce this year, from $29.1375 now, and gold will reach $1,620 an ounce, from $1,348.85, according to the Bloomberg survey of analysts.
Investors in exchange-traded products backed by gold own 2,028 metric tons, worth $88 billion, even after cutting their holdings by 4.1 percent since December, data compiled by Bloomberg show. ETPs trade on exchanges, with each share representing metal held in a vault. They accounted for 21 percent of investment demand last year, according to GFMS Ltd., a London-based research firm. Silver-backed ETPs fell 4.4 percent to 14,511 tons worth about $14 billion since December.
CFTC Data
While hedge funds cut their bets on higher gold prices by 42 percent since October, they still hold a so-called net-long, or bullish, position of more than 151,000 futures contracts, almost three times the average over the last 18 years, according to data from the Commodity Futures Trading Commission.
Central banks, the biggest owners, will add to reserves for a third consecutive year in 2011, the first time that’s happened since the 1970s, Deutsche Bank AG predicts.
The risk now is that an improving economic outlook will cut the allure of precious metals as a wealth protector. The MSCI World Index of equities added 4 percent since the start of January, the best start to a year since 1998. The International Monetary Fund on Jan. 25 increased its forecast for 2011 global economic growth to 4.4 percent, from 4.2 percent.
“Gold is going quiet,” said Pete Sorrentino, who helps manage $13.8 billion at Huntington Asset Advisors in Cincinnati, Ohio. “It’s good and healthy and characteristic of gold’s stair-step rally. We’ll see a little more downward pressure and then begin to trade sideways for an indeterminate time.”
SEC Reports
Gold accounts for 5 percent of the company’s $98 million commodity fund, compared with 15 percent in mid-December.
Another risk is the biggest investors, whose holdings are scheduled to be reported by the U.S. Securities and Exchange Commission on Feb. 14, according to Credit Suisse Group AG. Prices will likely drop and volatility increase should quarterly data show any of them cut their position, the bank said in a report Jan. 28. Investors last disclosed their stakes as of Sept. 30 in filings in November.
Paulson & Co. is the largest investor in the SPDR Gold Trust, the biggest ETP backed by gold, according to data compiled by Bloomberg. The 7.8 percent stake was worth $4.03 billion on Sept. 30 and would be valued at $4.15 billion now. Armel Leslie, a spokesman for Paulson, 55, declined to comment.
Soros Fund
Soros Fund Management LLC, which manages about $27 billion, also listed the SPDR Gold Trust as its biggest holding in a Nov. 15 filing. Soros described gold at the World Economic Forum’s January meeting in Davos, Switzerland, last year as “the ultimate asset bubble.” In a Nov. 15 speech in Toronto the 80- year-old said conditions for the metal to keep rising were “pretty ideal” and at this year’s Davos forum said the boom in commodities may last “a couple of years” longer.
Michael Vachon, a spokesman for Soros, declined to comment.
The precious metals most used in industry outpaced gold since the U.S. economy returned to growth in the third quarter of 2009. Palladium rose threefold, silver more than doubled and platinum jumped 57 percent, compared with gold’s 46 percent gain. Platinum and palladium are used in catalytic converters for cars and trucks. The London Metal Exchange index of industrial metals from aluminum to zinc jumped 86 percent.
Industrial demand for silver, excluding photography, will rise 18 percent to 478 million ounces this year, according to UBS, Switzerland’s biggest bank. Investors will buy 450 tons of gold through ETPs this year, the Zurich-based bank forecasts.
Mining Index
The 16-member Philadelphia Stock Exchange Gold and Silver Index, led by Freeport-McMoRan Copper & Gold Inc. and Barrick Gold Corp., fell 8.5 percent this year as metal prices dropped. All but one firm in the mining index is forecast to report an increase in annual earnings, according to the median of analyst estimates compiled by Bloomberg.
Higher silver prices hurt the profit of Rochester, New York-based Eastman Kodak Co. last year and are a “significant headwind” in 2011, Chairman Antonio M. Perez said on a conference call Jan. 26. Agfa-Gevaert NV, Europe’s biggest maker of healthcare imaging systems, said in a statement Nov. 15 that its Agfa HealthCare division was increasing prices for all imaging film products because of higher raw-material costs.
Bullion’s slide from a record is attracting buyers. “We struggle to recall a month when our total physical sales have been stronger,” led by Chinese gold demand, and turnover on the Shanghai Gold Exchange in January was a record, Edel Tully, an analyst at UBS, said in a report last week. “Elevated physical demand usually signals an impending bottom,” she said.
Silver Coins
Silver buying is also accelerating. One-ounce silver coin sales from the U.S. Mint jumped to a record last month. Ex Oriente Lux AG, based in Reutlingen, Germany, will start adding the metal to its U.S. ATMs that sell gold in banks, shopping centers and jewelry stores this month.
Investor demand for precious metals accelerated after the collapse of Lehman Brothers Holdings Inc. in September 2008 and as governments and central banks led by the Federal Reserve pumped more than $2 trillion into the world financial system. That stoked concern that inflation will accelerate. The Fed cut interest rates to near zero in December 2008 and have kept them there since and Greece and Ireland got bailouts.
“At the moment, people still have fear about inflation, about the debt crisis, and I don’t see any resolution to the debt crisis when the Fed is buying debt again and again,” said Thorsten Proettel, an analyst at Landesbank Baden-Wurttemberg in Stuttgart. “Most people will be loyal to their investment because the fear doesn’t evaporate.”
Bloomberg Ranking’s top precious-metal forecasters:
Average Error
Jochen Hitzfeld UniCredit 8.1%
Thorsten Proettel LBBW 12.1%
Anne-Laure Tremblay BNP Paribas 12.6%
David Wilson Societe Generale 13.9%
Suki Cooper Barclays Capital 14.8%
A Must-Have Report for Buying Gold Stocks
Learn How to Buy Gold Below Spot Prices
After the worst January for precious metals in two decades, investors still have a $102 billion bet on higher prices, hoarding more gold than all but four central banks and more silver than the U.S. can mine in almost 12 years.
The five analysts ranked by Bloomberg as the most accurate over two years expect silver to rise as much as 24 percent before the end of 2011 and gold 20 percent, the median of their estimates show. UBS AG predicts the strongest industrial demand for silver since at least 1990 and the second-highest sales of exchange-traded gold products on record.
The decade-long surge in gold attracted fund managers from John Paulson to George Soros and is now spurring central banks to add to their reserves for the first time in a generation. Once written off as demand for photographic film waned, silver found new uses in everything from solar panels to plasma screens, making it the precious metal most used in industry. As stocks rose 9 percent and Treasuries returned 67 percent since the end of 2000, gold surged fivefold and silver sixfold.
“I had to chuckle when I saw reports that it was over for gold,” said Michael Cuggino, who helps manage $10 billion at Permanent Portfolio Funds in San Francisco, and has about 20 percent of his assets in gold. “Some investors have taken money off the table after a significant run-up in 2010. If you look at the macro environment, the instability around the world, the worldwide currency devaluation, these factors all bode well.”
The Standard & Poor’s GSCI Precious Metals Index dropped 6.5 percent in January, the most for the month since 1991. Gold traded in London retreated 6.2 percent and silver 9.3 percent.
Monthly Slumps
Gold has had bigger monthly slumps four times in the last decade and plunged 34 percent from March to October 2008, before jumping 47 percent in the following four months. Silver posted larger monthly declines nine times over the same period and plummeted 57 percent over three months in 2008. It rallied 73 percent in the next four months.
Silver will climb as high as $36 an ounce this year, from $29.1375 now, and gold will reach $1,620 an ounce, from $1,348.85, according to the Bloomberg survey of analysts.
Investors in exchange-traded products backed by gold own 2,028 metric tons, worth $88 billion, even after cutting their holdings by 4.1 percent since December, data compiled by Bloomberg show. ETPs trade on exchanges, with each share representing metal held in a vault. They accounted for 21 percent of investment demand last year, according to GFMS Ltd., a London-based research firm. Silver-backed ETPs fell 4.4 percent to 14,511 tons worth about $14 billion since December.
CFTC Data
While hedge funds cut their bets on higher gold prices by 42 percent since October, they still hold a so-called net-long, or bullish, position of more than 151,000 futures contracts, almost three times the average over the last 18 years, according to data from the Commodity Futures Trading Commission.
Central banks, the biggest owners, will add to reserves for a third consecutive year in 2011, the first time that’s happened since the 1970s, Deutsche Bank AG predicts.
The risk now is that an improving economic outlook will cut the allure of precious metals as a wealth protector. The MSCI World Index of equities added 4 percent since the start of January, the best start to a year since 1998. The International Monetary Fund on Jan. 25 increased its forecast for 2011 global economic growth to 4.4 percent, from 4.2 percent.
“Gold is going quiet,” said Pete Sorrentino, who helps manage $13.8 billion at Huntington Asset Advisors in Cincinnati, Ohio. “It’s good and healthy and characteristic of gold’s stair-step rally. We’ll see a little more downward pressure and then begin to trade sideways for an indeterminate time.”
SEC Reports
Gold accounts for 5 percent of the company’s $98 million commodity fund, compared with 15 percent in mid-December.
Another risk is the biggest investors, whose holdings are scheduled to be reported by the U.S. Securities and Exchange Commission on Feb. 14, according to Credit Suisse Group AG. Prices will likely drop and volatility increase should quarterly data show any of them cut their position, the bank said in a report Jan. 28. Investors last disclosed their stakes as of Sept. 30 in filings in November.
Paulson & Co. is the largest investor in the SPDR Gold Trust, the biggest ETP backed by gold, according to data compiled by Bloomberg. The 7.8 percent stake was worth $4.03 billion on Sept. 30 and would be valued at $4.15 billion now. Armel Leslie, a spokesman for Paulson, 55, declined to comment.
Soros Fund
Soros Fund Management LLC, which manages about $27 billion, also listed the SPDR Gold Trust as its biggest holding in a Nov. 15 filing. Soros described gold at the World Economic Forum’s January meeting in Davos, Switzerland, last year as “the ultimate asset bubble.” In a Nov. 15 speech in Toronto the 80- year-old said conditions for the metal to keep rising were “pretty ideal” and at this year’s Davos forum said the boom in commodities may last “a couple of years” longer.
Michael Vachon, a spokesman for Soros, declined to comment.
The precious metals most used in industry outpaced gold since the U.S. economy returned to growth in the third quarter of 2009. Palladium rose threefold, silver more than doubled and platinum jumped 57 percent, compared with gold’s 46 percent gain. Platinum and palladium are used in catalytic converters for cars and trucks. The London Metal Exchange index of industrial metals from aluminum to zinc jumped 86 percent.
Industrial demand for silver, excluding photography, will rise 18 percent to 478 million ounces this year, according to UBS, Switzerland’s biggest bank. Investors will buy 450 tons of gold through ETPs this year, the Zurich-based bank forecasts.
Mining Index
The 16-member Philadelphia Stock Exchange Gold and Silver Index, led by Freeport-McMoRan Copper & Gold Inc. and Barrick Gold Corp., fell 8.5 percent this year as metal prices dropped. All but one firm in the mining index is forecast to report an increase in annual earnings, according to the median of analyst estimates compiled by Bloomberg.
Higher silver prices hurt the profit of Rochester, New York-based Eastman Kodak Co. last year and are a “significant headwind” in 2011, Chairman Antonio M. Perez said on a conference call Jan. 26. Agfa-Gevaert NV, Europe’s biggest maker of healthcare imaging systems, said in a statement Nov. 15 that its Agfa HealthCare division was increasing prices for all imaging film products because of higher raw-material costs.
Bullion’s slide from a record is attracting buyers. “We struggle to recall a month when our total physical sales have been stronger,” led by Chinese gold demand, and turnover on the Shanghai Gold Exchange in January was a record, Edel Tully, an analyst at UBS, said in a report last week. “Elevated physical demand usually signals an impending bottom,” she said.
Silver Coins
Silver buying is also accelerating. One-ounce silver coin sales from the U.S. Mint jumped to a record last month. Ex Oriente Lux AG, based in Reutlingen, Germany, will start adding the metal to its U.S. ATMs that sell gold in banks, shopping centers and jewelry stores this month.
Investor demand for precious metals accelerated after the collapse of Lehman Brothers Holdings Inc. in September 2008 and as governments and central banks led by the Federal Reserve pumped more than $2 trillion into the world financial system. That stoked concern that inflation will accelerate. The Fed cut interest rates to near zero in December 2008 and have kept them there since and Greece and Ireland got bailouts.
“At the moment, people still have fear about inflation, about the debt crisis, and I don’t see any resolution to the debt crisis when the Fed is buying debt again and again,” said Thorsten Proettel, an analyst at Landesbank Baden-Wurttemberg in Stuttgart. “Most people will be loyal to their investment because the fear doesn’t evaporate.”
Bloomberg Ranking’s top precious-metal forecasters:
Average Error
Jochen Hitzfeld UniCredit 8.1%
Thorsten Proettel LBBW 12.1%
Anne-Laure Tremblay BNP Paribas 12.6%
David Wilson Societe Generale 13.9%
Suki Cooper Barclays Capital 14.8%
A Must-Have Report for Buying Gold Stocks
Learn How to Buy Gold Below Spot Prices
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