Heightened risk meets easy money

World Gold Council mid-year gold outlook 2019

“Contrary to popular belief, gold’s performance is well explained by its supply and demand dynamics. Gold demand is linked to jewellery, technology and long- term savings, and these are important determinants of long-term performance. In the short and medium term their impact is felt predominantly when there are significant changes to demand. Conversely, gold investment demand amidst higher uncertainty – including speculative activity – can sway prices in a meaningful way in the short and medium term but its effects level off in the long run. In addition, gold supply through mining or recycling bring balance to the market.”

Gold as compared to other investment q4 2018, year to date 2019

Source:  World Gold Council

USAGOLD note:  Well put. . . . Eventually strong demand (or lack of demand) shows up in the pricing, particularly if it is persistent over the longer run.  A good example is central bank demand.  When the announcements appear of an acquisition – Poland’s recent purchase is an example – the gold pricing mechanism does not usually respond in the here and now. At the same time, the trend toward central bank acquisitions and repatriations had already become an important part of equation that pushed gold back over the $1400 mark.


Repost from 7-11-2019

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