Monday, May 30, 2016

Canadian mint sales of gold up 20% in Q1 while U.S. buyers of Comex gold contracts soar at record pace

For those obsessed with the current slam downward in gold prices, realize that this is a short-term paper driven anomaly by the U.S. central bank to protect the dollar from falling below 92 on the currency index.  And the primary reason to feel decent despite the $100 drop in the price is because demand continues to soar at record levels in both the physical and paper markets.

On May 28, the Canadian Mint released their sales numbers for gold maple leaf coins and for the quarter of 2016, purchases were up nearly 20% from the same quarter in 2015.

The Royal Canadian Mint Sold 212,600 Ounces of Gold in the First Quarter of 2016.
First quarter 2016 Canadian Mint gold sales rose 18.7% year over year in Q1 2016 from 179,100 ounces sold in the same quarter in 2015. First quarter 2016 gold sales put the Royal Canadian Mint on Track to sell One Milion ounces in 2016. 
The Royal Canadian Mint released its first quarter 2016 report this week. 
The report showed that Royal Canadian Mint first quarter 2016 gold sales increased 18.7% year over year from the first quarter of 2015. (212,600 ounces vs. 179,100 ounces) - SGT Report
Additionally, there was an interesting and historic anomaly last week in the Commitment of Traders (COT) report that shows open interest on the U.S. Comex market.  In it, speculators were leaving the gold futures market while at the same time the number of commercial traders going long in the metal did so at the fastest rate in the report's history.
Summary 
Speculative traders abandoned gold positions at a tremendous rate over the past week. 
While speculative bulls were dropping their gold contracts, larger commercial traders were buying up gold long contracts at the fastest rate in the report's history. 
While we have been bearish on gold for the past few weeks, we now think it is a good time for investors to start re-establishing gold positions. 
In the latest Commitment of Traders report (COT), we saw something very unusual happen but it wasn't on the speculative side. Speculative traders did what we expected them to do with the price downturn - longs sold hand over fists while shorts increased their own positions. But what was unusual was that Commercial traders (the big buyers of gold) increased their positions by the largest weekly amount in the history of the new COT report. - Seeking Alpha

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