Monday, May 7, 2018

Has gold finally reached that 'Blood in the streets' moment as demand falls off a cliff in Q1

Despite the fact that gold production appears to have reached a peak in late 2016, demand for the precious metal has been quite sporadic.  In this we mean that U.S. demand has verily hit decade long lows, while at certain points over the past two years central banks have been accumulating it hand over fist.

But a trifecta of news stories out on May 4th and 7th shows that demand globally may have finally hit rock bottom, and the desire for gold is at that 'blood in the streets' stage.


China:
Global demand for gold fell seven per cent in the first quarter to its lowest in a decade as fears in China eased over the strength of the yuan and rangebound prices leading to a major decline in appetite for bullion as an investment. 
Demand dropped to 973.5 tonnes in the three months to March 31 from the same period last year, the World Gold Council said on Thursday.  – South China Morning Post
India:
Gold imports by India, which vies with China as the biggest consumer, declined in April, according to a person familiar with the information, falling for a fourth month amid lackluster sales. 
Overseas purchases dropped 46 percent to 52.7 metric tons last month from a year earlier, the person said, asking not to be identified as the figures aren’t public. Imports in the first four months totaled 211.7 tons, a drop of 43 percent from a year ago, data collated by Bloomberg show. Finance Ministry spokesman D.S. Malik didn’t answer calls made to his mobile phone. - Bloomberg
Dubai:
UAE consumers have been warned not to put most of their savings into gold jewellery, even as prices are forecast to hit a whopping $1,800 an ounce and some big-time investors are already pouring billions of money into the precious metal. 
The price of 24K stood at Dh159.50 per gram on Monday, down nearly Dh3 per gram from early April, but up from about seven days earlier. At the same time, spot gold hit $1,318.85, the highest price reached since late April. – Gulf News
Gold prices have remained caught in a strong range of between $1310 and $1355 for several months now, with each time it appears to try to break through that ceiling it gets summarily crushed by central and bullion banks dedicated to ensuring investors are focused on dollar based paper assets.

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