Gold continued higher today – quietly finishing up another $3.78 at $1284.90. Silver was down 4¢ on the day finishing at $16.96. Concerns about a ramp-up in Middle East geopolitical tensions along with the crackdown on many of Saudi Arabia’s wealthiest citizens have focused attention on the precious metals. The Gulf States have always been a strong market for physical gold and what is going on there now could fuel capital flight and even more demand.
The World Gold Council is out with its quarterly report on gold demand. The headline – “Gold demand in Q3 at eight year low” – tells only part of the story. Flagging jewelry sales in India led overall demand lower, and even then, the reduced demand is traced directly to India’s continuing attempts to artificially dampen demand through regulation. Central bank and private physical demand in the form of coins and bars, on the other hand, posted some fairly healthy numbers, up 25% and 17% year over year respectively. China led the way – a steady source of strong physical demand. All told, gold demand is holding up pretty well globally despite strong stock markets and central bank jawboning on interest rate and economic outlook expectations.
Quote of the Day
“Kuwait has unveiled a plan to build a massive gold city. The project which will cover 100,000 square meters will be the biggest of its kind in the region, according to Al Qabas newspaper. The Ministry of Commerce and Industry has submitted a demand to the Municipality of Kuwait City to assign the land for work on the mega project. The complex would include a building for precious metals, a VIP lobby, administrative facilities, car parks, jewelry testing labs, 1,500 jewelry workshops and 2,000 shops. The mega project will also include an exhibition hall, a permanent jewelry museum, a bourse for trading in gems and precious metals and another hall for holding auctions.” – MenaFN
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