Picking up from last week’s video, I wanted to do a deep dive into gold, particularly because there is a diversity of opinions regarding whether we break down from here or we make another leg higher. In this video, I address a recent chart from JC Parets at All Star Charts and my opinion regarding his analysis in the short term.
The big question is whether gold has completed a fifth wave from the $1170 low (setting up and A-B-C correction), or whether the recent high was only wave 3, setting up a fifth wave higher. I am of the latter opinion.
As always, we would love to hear your feedback whether you agree or disagree.
In this week's video I take a look at the charts of gold, silver, platinum, palladium, and copper and offer some thoughts on where I see prices moving next. In the case of gold, which has enjoyed a fantastic run-up from $1180 to $1570 this year (in the process breaking out of a six year base), price is pulling back and bull flagging at the 61.8% Fibonacci retracement. Does it make a push down to $1400 to backtest the entire move? Will silver find support at $16.60 or are we moving lower? Will palladium continue its historic march hire, or will it meet resistance at future levels?
I discuss all this and more in today's ten minute video. As always, whether you agree or disagree with my analysis, I would love to hear your feedback.
Australia's biggest gold refiner, the Perth Mint, is developing its own cryptocurrency backed by physical precious metals.
The ambitious plan, which is subject to a confidentiality agreement, will make it easier for consumers to buy gold.
The mint also plans to make use of blockchain technology, first used as the core component of the digital currency Bitcoin, where it works as a public ledger for transactions.
Global gold demand amounted to 993t in Q3 2016 (-10%), as high gold prices discouraged consumers. ETPs were the only bright spot during the quarter, with 146t of inflows helping to counterbalance weak demand elsewhere, notably in jewellery (-21%), bars and coins (-36%) and purchases by central banks (-51%). Total Q3 supply was up 4% to 1,173t (from 1,127t in Q3 2015). Recycling was the primary driver of this growth, up 30% year-on-year as the higher price encouraged consumers to sell some of their existing gold holdings. Mine production - virtually unchanged year-on-year (-0.5%) – continued to plateau, while Q3 saw net de-hedging (of 15t) for the first time in four quarters.
Donald Trump's U.S. presidential victory has spurred safe-haven buying of physical gold in Europe, but traditional bullion holders in the United States are standing pat. After all, many of them are optimistic after voting for Trump.
The contrast in reactions to Trump's surprise victory shows a wide difference in how investors in the two markets evaluate risk. For many outside the United States, Trump's pledge to rewrite the playbook on trade and international relations prompted defensive gold buying. U.S. investors were more likely to be dumping gold in favor of stocks and bonds.
Gold demand reached 1,050 tonnes Q2 2016, a 15% increase year-on-year. This is credited to the strong consumer demand in the United States, which increased 33% year-to-year. Investment was up 140% year-to-year and was the largest component of gold demand for two consecutive quarters for the first time ever. Central Bank demand fell 40% to 77t compared to Q2 2015. Total supply increased 10% to 1,145t. Indian consumer demand fell 18% year-to-year because of monsoons which have sucked rural incomes, which curbed demand. There was a resurgence of gold recycling, which led to the 23% increase year-to-year.
Gold demand reached 1,290 tonnes Q1 2016, a 21% increase year-on-year, making it the second largest quarter on record. This increase was driven by huge inflows into exchange traded funds (ETFs) – 364t – fuelled by concerns around the shifting global economic and financial landscape. Higher prices and industrial action in India pushed global demand for jewellery down (-19%), while total bar and coin demand was marginally higher (+1%). Central banks remained strong buyers, purchasing 109t in the quarter. Total supply increased 5% to 1,135t. Hedging by producers (40t) supported an increase of 56t in mine supply, although countered by a marginal decline in recycling.
The World Gold Council’s Gold Demand Trends report for Q3 2015 shows total demand rose 8% to 1,120.9 tonnes (t), the highest in the last two years. During this quarter, ETF outflows contributed to lower prices in July, resulting in an increase for customer demand internationally. Following this, a positive shift in institutional investor attitudes led to to modest ETF inflows in following months of August and September, leading gold prices back up. Central banks bought another 175 tonnes in recognition of gold's diversification benefits. After a long period of growth, supply of gold from mine production contracted by 1% in 3Q.
The World Gold Council’s Gold Demand Trends report for Q2 2015 shows total demand was 915 tonnes (t), a fall of 12% compared to the same period last year, due mainly to a decline in demand from consumers in India and China. However, demand in Europe and the US grew, driven by a mixture of increasingly confident jewellery buyers and strong demand for bars and coins. Looking ahead, there are encouraging signs moving into what are traditionally the busiest quarters for gold buying in India and China.