Gold sheds its chains – again
Robin Bromby writes for ProEdge Wire:
Some really should offer the gold nay-sayers a shoulder to cry on – even, possibly, some grief counselling. Every time the knockers among the analysts predict that the yellow metal is headed for a bust, all that does is seem to encourage investors to send the price higher.
If the price does say strong and rise further by December 31, then gold is on its way to its 11th straight year of increases. Show me another commodity that has a record like that.
For the record, here are the annual averages per ounce:
- 2001 $273
- 2002 $310
- 2003 $363
- 2004 $409
- 2005 $444
- 2006 $604
- 2007 $695
- 2008 $872
- 2009 $973
- 2010 $1,226
- 2011 $1,571
BNP Paribas reports that gold flows into exchange-traded funds totalled 81.9 tonnes in September (and silver ETFs had net inflow of 410.2 tonnes).
The interesting thing, if you read BNP analyst Anne-Laure Tremblay’s latest report, is that gold demand and price has kept on growing even though some of the obvious markets have had mixed results.
For example, Western bar and coin demand in the second quarter this year waned a little. They were down year-on-year in the U.S. and Switzerland but the safe-haven factor continued to work in Germany and France with demand strong there. However, in September U.S. coin sales suddenly picked up, with Eagle coin sales at their highest level since March.
Central banks also offered support in the second quarter with these institutions adding 157.5 tonnes to their vaults in the three months to June 30, the main buyers being Russia, South Korea and Paraguay.
And the gold price has remained reasonably intact notwithstanding the demand decline in India, the world’s biggest gold import market. The rupee’s rapid depreciation, the poor monsoon denting farmers’ incomes and the overall economic pall hanging over India combined to suppress India’s appetite for gold. Plus, China’s slowing economic growth also seems to have dented gold demand there – but that doesn’t mean the Chinese central bank is not still stocking up with gold imports via Hong Kong in the first seven months up 500 per cent on the same period in 2011. If it wasn’t going into the gold shops for sale to retail investors, then it was probably going into the central bank vaults.
BNP sees gold averaging $US1685/oz in 2012 and $1900/oz in 2013 – and that, if correct, would make 12 straight years of rising prices (and counting).
October 8, 2012 (Source: ProEdge Wire)