A Fox Business report states demand for gold is at a 10-year low. What’s the real story?
Please consider Gold Demand Slumps to a 10-Year Low.
For gold investors, the rising market volatility is no match for the currently growing economy, with gold holdings slumping to a decade low, according to the World Gold Council (WGC).
The WGC reported that global gold demand fell to its lowest first-quarter level since 2008, falling to 973 metric tons in the first quarter of 2018, a 7% drop compared to the 1,047 metric tons in the first quarter of 2017.
More Luster in Stock Markets
Reuters reports U.S. Gold Coin Sales Slide as Stock Markets Show More Luster.
U.S. retail investors are losing their appetite for physical gold as buoyant stock markets offer tempting alternatives, sending sales of newly minted coins to their lowest in a decade.
More and more coins are also being sold back onto the market, further eroding demand for newly minted products.
Gold American Eagle bullion coin sales from the U.S. Mint slumped to a third of the previous year’s level in 2017, their weakest since 2007.
They were down nearly 60 percent year on year in the first quarter. Sales so far this month, at 2,500 ounces, are less than half last April’s total, and a fraction of the 105,500 ounces sold in April 2016.
Contrary Indicator
For starters. retail investors dumping gold coins is a contrary indicator. And if they are dumping gold coins to buy Bitcoin or stock that is a contrary indicator for Bitcoin and Stocks.
What About Demand?
Actually, demand for gold bottomed in December of 2015.
How do I know? By looking at the price.
Gold Demand
As noted by the chart, demand for gold peaked in September of 2011. Demand bottomed in December of 2015.
Wait a second, you say, those are prices!
Yes, exactly.
Unlike silver, which is used up industrially, nearly every ounce of gold ever mined is available for sale.
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