Gold ETF Sales Dwarfed By Jewellery, Coin and Bar Demand

Gold ETF Sales Dwarfed By Central Bank, Jewellery, Coin and Bar Demand

Today’s AM fix was USD 1,385.25, EUR 1,068.95 and GBP 917.81 per ounce.
Yesterday’s AM fix was USD 1,386.00, EUR 1,074.92 and GBP 919.16 per ounce.

Gold climbed $24.80 or 1.78% yesterday to $1,392.00/oz and silver finished up 0.16%.

After a volatile and momentous week for global markets, gold and silver look set to finish higher in all currencies and have their best week in a month.
GoldCore Market Performance Table
Holdings in gold exchange-traded funds fell to fresh four-year lows yesterday but demand from central banks for bullion coins and bars, plus store of wealth jewellery demand is supporting gold.

SPDR Gold Trust, the world's largest exchange-traded gold fund, said its holdings fell 0.15% to four-year lows of 1,018.57 tonnes on Thursday.

Gold held by gold-backed ETFs, which in 2012 accounted for just 6% of the world's gold demand, fell by 177 tonnes in the first quarter according to the World Gold Council data.
Gold, 5 Min, May 20-24 2013 – (Bloomberg)
Gold, 5 Min, May 20-24 2013 – (Bloomberg)

ETF demand is just one facet of the broad based global demand that gold enjoys today and this fact continues to be not fully appreciated by many market participants who are tending to focus on falling ETF demand and liquidation to the exclusion of all else.

In the first quarter alone, central banks acquired 109 tonnes of gold – the seventh consecutive quarter of central bank gold accumulation.

Interestingly, demand for jewellery in China alone at 185 tonnes and central banks demand at 109 tonnes equals 294 tonnes of demand for physical gold bullion which is much greater than the fall in ETF demand of just 177 tonnes.

This 294 tonnes of demand does not include global jewellery demand, excluding China, coin and bar demand globally, investment demand for digital gold, allocated gold demand and storage.

Insight: Cyprus, Energy & Gold: Wealth Protection In A Lawless World
April's edition of Insight takes a close look at the recent banking crisis in Cyprus and how it is causing other states to consider the imposition of taxes on depositors' savings. The reasoning behind these 'taxes' is to part cover the colossal levels of indebtedness that most nations find themselves in.
Chris Sanders, our Insight April contributor, maintains that it is only capital accumulation enabled by real economic growth that can alleviate the massive levels of indebtedness. Unfortunately, Sanders finds that this is nigh on impossible given the excessive energy costs required, or as he puts it, 'the marginal energy to power such growth is not there to do so.'

On April 15th, a small number of traders executed a suspicious sale of futures on the COMEX in New York which resulted in an 18% fall in the price of gold. Sanders points out that on the one hand we have this level of indebtedness that isn't going to go away, and on the other, we have a financial system that appears to operate outside the general rule of law. When you take everything into account, Sanders surmises that it's all a great advertisement for holding gold or silver in secure storage on an allocated basis.
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