Gold Demand Sets Record in 2006
2007 February 16
The World Gold Council (WGC) said today. that despite reduced supply and a fall in tonnage, demand for gold in 2006 reached a record level.
The WGC said there was positive tonnage growth in the investment and industrial segments and double-digit dollar growth in the jewelery sector.
The record dollar values for overall demand and jewellery demand occurred despite a fall in supply, reducing the quantity of gold purchased.[tags]spot gold,spot gold price,gold market,gold demand[/tags] Australian gold
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The International Monetary Fund is in the process of revising the laws that govern the trading of gold by the world’s central banks which will radically change the ability of central bankers to suppress the gold price, a major factor depressing the price of the yellow metal that has been an open secret for years.
The world’s gold mines produce only about 2,500 tonnes of gold annually, adding just under 2 percent per year to the total supply of gold, estimated at 150,000 tonnes mined since the dawn of mankind. The market trades about 5,000 tonnes of gold each year, and about 1,500 tonnes of that has been central bank gold coming to market via leasing, if GATA is right.
If GATA is right, then when the central bank gold is exhausted, as it must be eventually — and faster if other central banks start buying such as in Russia, China, South Korea, South Africa, Argentina, and other countries — the supply and demand dynamics of the gold market will change dramatically! …and the price will soar.
Gold has shown an incredible amount of strength in the past few weeks and I believe that this is just the start of a huge run up in its price. Silver will show even more powerful gains than gold because it is a consumable industrial metal and it shares the same monetary properties of gold. Up to this point, gold and silver prices have been manipulated by central bankers as part of an overall effort to mask the severe economic problems of the United States.
I would expect to see more developing central banks put some of their reserves into gold over time, as the developed world sells some of their gold. I would also not be surprised to see another bubble in gold develop at some point, as there is something about the metal that seems to alter mental reality when it starts to run.