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We are seeing a big turnaround in the gold market. Who’s buying? It is not who you
think…So what happened? How did this “stealth” rise in gold happen? Words: 1200
So asks Sara Nunnally (www.insideinvestingdaily.com) in edited excerpts from her original article*.
Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!) has edited ([ ]), abridged (…) and reformatted (some sub-titles and bold/italics emphases) the article below for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.
Nunnally goes on to say, on part:
Governments…[bought] five times more…gold bullion in 2011 than in 2010…[and] now have more than 30,788.9 metric tons…in [their] vaults – and… [it is anticipated that they will] buy another 190 metric tons (more than 6.7 million [troy] ounces) is in the first half of 2012. At yesterday’s opening spot price for gold, that means governments could spend $11.56 billion on gold in the next six months. That’s $64.2 million a day, every day until the end of June!
[It is the] emerging markets who have been buying gold:- Turkey added 63 metric tons of gold between October and November 2011
- Thailand bought 52.9 metric tons in 2011
- South Korea bought 40 metric tons, and
- Russia bought 65.2 metric tons
- China bought 85 metric tons in October with an estimated 100 tonnes in November
Together these countries make up more than half of all the gold buying in 2011. That is a huge statistic. Think about this for a second. If Thailand [bought] all that gold on the spot market today, it would spend $3.22 billion, or nearly 15% of its entire GDP growth in 2011…
Meanwhile developed economies have been selling gold.
- Germany dumped almost 166,000 ounces last October and more than 169,000 ounces in 2010.
- France sold 56.7 metric tons of gold in 2009, worth at today’s price $3.45 billion.
I bet they wish they had that back now, eh?
[The chart below] is gold’s spot price over the past 30 days…The low on Dec. 29, 2011, was gold’s lowest point in six months, and represented a drop of more than 19% from its record price above $1,900 an ounce. [Why?] Because everybody was selling gold – [people such as] billionaire hedge fund manager John Paulson [who] dumped one-third of his holdings in GLD last fall [even though] he had been calling for gold at $4,000 back in May 2011, when George Soros sold his gold holdings – and [all] that weight led to investors turning a blind eye to gold in this first month of 2012.
Now, [however,] big names are swaying bullish for gold this year. Morgan Stanley thinks gold will average $1,845 an ounce in 2012, while Goldman Sachs thinks gold will hit a new record of $1,940 this year. [Then there those who think gold will go dramatically higher in 2012 – read These 8 Analysts See Gold Going to $3,000 – $10,000 in 2012! Here’s Why]
According to Morgan Stanley gold could see $2,175 in 2013 [and many others see gold going even higher than that as per these articles: $10,000 Gold is Coming in 2012/13! Here’s Why and Contracting Fibonacci Spiral Puts Gold Near $4,000 by 2013 and $7-10,000 by 2020 and New Analysis Suggests a Parabolic Rise in Price of Gold to $4,380/ozt.]
There are plenty of reasons why gold is going to be a major investment again in 2012, and emerging markets, particularly China, are going to play a big part in that. China bought 454 metric tons between 2003 and 2009 and one analyst is projecting China’s total gold imports for 2011 [to exceed that] at 490 metric tons — more than all the gold the world’s central banks added for the entire year last year! [Indeed, according to Eric Sprott – Aggressive Chinese Buying Will Spike Gold Price]
Who in the world is currently reading this article along with you? Click here
We’ll know soon enough but how [should we] to play it? [May I suggest you read this article for some insights on how to do just that: There is a MUCH Better Way to Own Gold Than Via ETFs and ETRs – Here’s How]
*http://www.insideinvestingdaily.com/
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