Category Archives: SUPPLY & DEMAND

ETP GOLD HOLDINGS SINK TO RECORD LOW

Gold Price Weakness

Update 18th June 2015

Bitcoin surges as Grexit fears mount :

Gold up 1.45% AT $1201

Ole Hansen, Head of Commodity Strategy Saxo Bank: writes

“Investors have cut total holdings in Exchange-Traded Products backed by physical gold to a new six-year low following five consecutive weeks of selling.”

Charts Courtesy Ole Hansen Saxo Bank

ETP holdings, weekly change

ETP holdings, graphs

Gold Mining Costs  & The Price Buyers Are Willing To Pay

Mining costs are not uniform.  But, in relation to substantial volume producers,  indicated all in  costs are between  $950 and $1150 per oz. This price range corresponds with the prices buyers are currently willing to pay. If gold buyers are not prepared to pay a price that rewards production supply will fall, demand will exceed supply and the price will stabilise at a level that rewards producers.
The  gold price spiked to over $1900 between 2007 and 2011 when gold was being over hyped as a safe haven.  In spite of the severe correction that followed the  prophets of doom continue to hype gold relentlessly.  Claims that  China is on course to imposing a new gold standard  to strengthen its credentials with the IMF is the latest absurd pitch.

Moderation, Motivation, Strategy  & Timing

 The Goldwatcher  pitch has been that gold is well described as The Stateless Money Franchise. Moderation has been our Golden Rule and still is.  Sensible motivation, strategy and timing are of course  golden rules for all investing.
Gold is out of favour now with the investors who can access a range of alternative financial hedges and diversification opportunities. However gold  remains on the agenda for anyone interested in owning  an asset with a different risk reward profile to other financial assets. In this context  the case outlined in The Goldwatcher for owning gold as insurance against the unexpected and unthinkable remains compelling .

THIS WEB SITE IS NOT ADVISORY. PLEASE READ OUR OUR DISCLAIMER ON INVESTMENT ADVICE 

GOLD SUPPLY DEMAND TRENDS & ETF ANALYSIS

Sustained Central Bank demand for gold supports the conclusion in The Goldwatcher that the gold mining industry needs central banks and central banks need gold.

In his 1997 Lecture   “The International Monetary System in the 21st Century Could Gold Make a Comeback the Nobel Laureate Economist Robert Mundell predicted :

“More likely, gold will be used at some point, maybe in 10 or 15 years when it has been banalized among central bankers, and they are not so timid to speak about its use as an asset that can circulate between central banks. Not necessarily at a fixed price, but a market price.”

Infographic 1

Source World Gold Council  Supply and Demand Trends Analysis 

GOLD DEMAND ANALYSIS

2013 2014 2015 Q1’15 vs Q1’14
Tonnes 2013 2014 Q2 Q3 Q4 Q1 Q2 Q2 Q4 Q1 % chg
Jewellery 2,670.7 2,457.2 822.9 628.4 614.7 620.2 590.2 591.6 655.1 600.8 -3
Technology 354.1 346.5 93.9 87.0 83.6 81.9 86.4 87.9 90.4 80.4 -2
Electronics 248.4 277.6 65.3 61.4 59.1 65.0 68.9 70.7 73.0 63.7 -2
Other Industrial 82.7 49.0 22.5 20.0 19.3 11.5 12.6 12.3 12.6 12.0 4
Dentistry 23.0 19.9 6.1 5.6 5.2 5.3 4.9 4.9 4.8 4.7 -11
Investment 785.9 820.6 162.3 202.2 161.3 268.0 199.2 182.9 170.6 278.8 4
Total bar and coin demand 1,702.0 1,004.4 593.8 320.9 346.5 281.5 237.1 223.4 262.5 253.1 -10
Physical Bar demand 1,335.8 726.0 472.0 262.4 261.4 201.3 170.0 166.9 187.9 193.5 -4
Official Coin 266.3 204.6 85.8 42.2 67.0 64.4 49.2 36.1 54.9 45.0 -30
Medals/Imitation Coin 99.9 73.8 36.1 16.4 18.0 15.8 17.9 20.4 19.7 14.6 -8
ETFs & similar products* -916.0 -183.8 -431.5 -118.7 -185.2 -13.5 -37.9 -40.5 -91.9 25.7 -
Central bank & other inst. 625.5 588.0 166.5 138.9 150.0 119.8 157.2 176.7 134.2 119.4 0
Gold demand 4,436.3 4,212.4 1,245.6 1,056.4 1,009.6 1,089.9 1,033.0 1,039.2 1,050.4 1,079.3 -1
LBMA Gold Price, US$/oz 1,411.2 1,266.4 1,414.8 1,326.3 1,276.2 1,293.1 1,288.4 1,281.9 1,201.4 1,218.5 -6

GOLD ETFs GLOBAL HOLDINGS

 1041 TONNES  VALUE US $40,305m

Product name Total Tonnes Total Ounces Total Value
New York Stock Exchange Arca (NYSE Arca) AND Singapore Exchange (SGX) AND Tokyo Stock Exchange (TSE) AND Hong Kong Stock Exchange (HKEx) AND Mexico Stock Exchange (BMV) SPDR® Gold Shares 715.260 22,996,326 US$27,681m
London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse – Xetra) Gold Bullion Securities 138.13 4,441,056 US$5,274m
London Stock Exchange (LSE) AND NYSE Euronext Paris AND Borsa Italiana AND Frankfurter Wertpapierbörse (Deutsche Börse – Xetra) AND NYSE Euronext Amsterdam ETFS Physical Gold 152.66 4,908,200 US$5,825m
Australian Stock Exchange (ASX) Gold Bullion Securities 11.16 358,789 US$426m
Johannesburg Securities Exchange (JSE) New Gold Debentures 28.38 912,310 US$1,099m

 

goldbook-book.png