The POG, the Gold Stocks and especially the juniors (EAG) have been getting hammered most recently, out of sync with Gold Demand.
Is Gold Money? The war is waging between Safe Haven Gold and/or Safe Haven $USD/Treasuries. Fiat Currency or Gold, which is the real money in our near future and store of wealth creation? The Fed has a printing press, while Gold is finite, with increases limited to what is mined. Below Gold Demand, cheers, Mark
18 Nov 2011,
“Despite record high nominal prices and bubble claims, demand for gold continues to grow. In its most recent Gold Demand Trends report, the World Gold Council finds that third quarter gold demand volume increased 6% to 1,053.9 tonnes. By the end of September, the quarterly average price of gold increased 39% to $1,702.12, compared to $1,226.75 in last year's third quarter.” (Paper Gold is being sold, and great downward pressure is being brought unto the Gold Stocks especially the Juniors)
“As the world drowns in debt, central banks continue to stock up on the yellow precious metal. Net purchases amounted to 148.4 tonnes, the highest since central banks became net buyers of gold in 2009. For comparison, central banks only purchased a net of 22.6 tonnes in the third quarter of last year. This represents an amazing increase of 556%! "Central bank buying was a highlight of the quarter.”
- Technology demand remained stable at 120.2 tonnes,
Investment demand attributed to a large portion of the total gold demand.
- Gold investment demand, which includes demand for gold bars, coins, and ETFs, reached 468.1 tonnes in the third quarter. This represents a 33% increase from last year's third quarter. Interestingly, ETFs and similar products only accounted for 77.6 tonnes of the total investment demand. This means 390.5 tonnes of investment demand came from investors buying some form of physical gold. Holders of physical gold are less likely to be speculators!
Increased investment demand is more than making up for decreased jewelry demand in India, creating continued positive growth in overall gold demand. Central banks are increasing their purchases significantly, as they attempt to diversify away from U.S. dollars. Given the aggressive buying from central banks such as China, Russia, Thailand and Mexico, we will likely see a floor under the gold price going forward. I believe gold will hit $2,000 in the next 3 to 6 months and continue well beyond the inflation-adjusted high of $2,400 during 2012. If hyperinflation hits or investors lose faith in fiat money and scramble for a safe-haven investment, gold is likely to reach $5,000 or higher. (Introduction of QE3 as Final Outcomes of unresolved European and USA Debt imbalances implode)
I believe the bull market in precious metals is far from over and the current correction will prove to be yet another excellent buying opportunity. It can be hard to buy when others are fearful, but I am confident that gold anywhere under $2,000 will soon seem very cheap.
Will Gold Stocks continue to move lower or follow the POG HIGHER!!!
The Juniors are dirt cheap here at $1700 POG. Place your Bets!
The Safe Haven of Gold/Gold Stocks or Safe Haven Treasuries/$USD Fiat Currency.
