| WGC / rapport extremement bullih sur la D gold |
par marie Mer 19 Nov 2008 - 23:04
commentaires de Murphy et d'Adrian Douglas soulignés en rouge et bleu .. en ce qui concernent les soit disants intitutions censées "effacer " cette demande proprement hallucinante..
comment le même type d'investisseur pourrait'il à la fois être si acheteur et si vendeur?.. bref une démonstration involontaire du WGC sur ce que démontre le Gata depuis 1999 .. www.lemetropolecafe.comFor gold, a tussle between two groups of investors
Retail-based demand jumps even as institutions undergo a massive exodus
By Moming Zhou
Wednesday, November 19, 2008
NEW YORK -- Retail investors sharply increased their demand for gold bars and coins in the past few months as they struggled to find a safe place for their money amid the financial crisis, research shows.
But institutional investors have kept the upper hand, according to Wednesday's report from the World Gold Council, a gold mining industry association. Heavy selling by institutions has more than offset retail buying and pushed gold prices to their lowest level in more than a year.
Moves by retail investors, including demand for bars and coins, resulted in a net inflow of 232 tons (7.46 million ounces) in the third quarter, compared to 105 tons in the same time frame a year ago.
The figures, compiled independently for the council by GFMS Ltd, a precious metals consultancy, show strong bar and coin buying in Swiss, German, and U.S. markets.
Meanwhile, gold holdings in exchange-traded funds rose 150 tons, compared with an increase of 4 tons in the second quarter and 139.5 tons in the third quarter a year ago. The peak in ETF inflows occurred in late September after the collapse of Lehman Brothers.
Much of that money added to the gold holdings in the SPDR Gold Trust (GLD), the largest gold ETF, to more than 770 tons in October, a cache that exceeds the official holdings of Japan, which has the world's seventh-biggest gold reserves.
Demand for physical gold didn't slow even when some financial institutions were forced to sell their gold assets to ease the squeeze in their cash balances….
"Funds who would like to keep their asset of last resort are being forced to sell," said Peter Spina, an analyst at GoldSeek.com. "This is causing weakness in the paper gold market price but it is not a true reflection of the physical market."
"There will be more victims of the fund collapse and more forced liquidations even if it requires selling your most desired assets such as precious metals," he added. "Once this process works itself through, the true market prices for gold will readjust."
Gold futures closed at $732.80 Tuesday on the Comex division of the New York Mercantile Exchange, more than 25% lower than its record high above $1,000 an ounce hit in March.
Comex futures dropped to below $700 an ounce last month, the lowest since September 2007.
The London gold-fixing price, a benchmark for gold traded between big institutions, stood at $738 an ounce, down 28% from its record high of $1,023 hit in March.
Despite selling on the institutional side, physical demand for the metal has remained strong.
Including industrial and dental use, physical gold demand in dollar value hit an all-time high of $31.8 billion in the third quarter, the WGC reported. In tonnage terms, it stood at 647.6 tons, the highest since the second quarter of 2007.
... Institutions dump gold
On the other side of the tussle, some institution investors sharply reduced their gold holdings for much-needed cash in the face of the credit crunch.
Institution investment saw a net outflow of nearly 300 tons in the third quarter, according to the WGC, which more than offset the inflows in the retail sector.
Big institutions trade with each other directly in large orders through the opaque over-the-counter markets. They also bet on futures exchanges in New York, Tokyo and a few other places.
Gold was "one of the few assets remaining that could be sold at a reasonable price to meet margin calls on other, worse-performing assets," the WGC said in the report.
The significant outflow in the institutional level explains why the gold price did not perform better in the face of strong jewelry buying and demand for physical gold, the WGC said in the report.
Comex gold futures topped $900 an ounce in September after Lehman's bankruptcy filing. But prices have since seen roller-coaster declines. Futures tumbled 18% in October, the largest monthly loss since February 1983. See story on slumps in gold prices.
Some analysts said gold prices would rebound soon as much of the selling that occurred among institutions had a short-term focus and did not reflect a decline in gold's fundamentals.
"Institution investment saw a net outflow of nearly 300 tons in the third quarter, according to the WGC, which more than offset the inflows in the retail sector."
So let’s see, we are undergoing the greatest financial crisis since The Great Depression … a crisis which has the retail, small investor buying gold like never before in history … with every kind of investor (large and small) pouring money in the Gold ETF’s, but mysterious institutions are selling their gold, to the tune of a staggering 300TONS!
Talk about a disingenuous presentation by the most worthless industry organization in history. Sure, there was some hedge fund liquidation, but the institution doing most of that amount in size was THE UNITED STATES GOVERNMENT, and perhaps the IMF. The main institutions selling were The Gold Cartel. The World Gold Council can’t explain why the price is going DOWN with demand SOARING, so they blame it on institutional selling in the over the counter market. How convenient!
This sort of drivel emanating from the WGC twits is nauseating. At least they are pitifully consistent.
Adrian has the significance of this WGC report nailed (for the market and GATA)…
I have read some of the newswires reporting on the World Gold Council Q3 demand report but NONE of them come close to conveying the screaming bullishness of the WGC report itself. IT IS A MUST READ.
Here are some key points from the report
- Dollar demand for gold reached an all time quarterly record of US$32bn in the third quarter of 2008
- This figure was 45% higher than the previous record in Q2 2008.Tonnage demand was also 18% higher than a year earlier.
- Identifiable investment demand, which incorporates demand for gold through exchange traded funds (ETFs) and bars and coins, was the biggest contributor to overall demand during the quarter, up to US$10.7bn (382 tonnes), double year earlier levels
- retail investment demand rose 121% to 232 tonnes in Q3
- Gold ETFs enjoyed a record quarterly inflow of 150 tonnes in Q3. Net inflows surged by an unprecedented 111 tonnes during 5 consecutive trading days, equivalent to US$7bn.
- Q3 saw a record US$18bn of consumer demand for gold jewellery with buyers returning to the market on lower price points, around and below US$800, demonstrating the underlying positive sentiment towards gold and its recognition as a store of value.
- Despite a deteriorating global and domestic economic climate, demand in India, the largest market for gold demand, recovered during the third quarter, encouraged by lower gold prices, a good monsoon and the onset of the festive season. At 250 tonnes, total consumer demand was 31% higher than Q3 2007 levels. In value terms, demand hit the record quarterly sum of US$5bn.
- Demand in Greater China rose 18% to 109 tonnes, with the majority of this increase attributable to a strong rise in demand in mainland China (+16 tonnes).
- Jewellery demand in the Middle East, which accounts for more than 90% of total consumer offtake in the region, rebounded in Q3 with tonnage demand up 15% on Q3 2007 and up 47% in dollar terms, hitting a new record of US$2.8bn. Retail investment demand, while relatively small in size at 7 tonnes, recorded strong growth of 23%, and 57% in dollar terms. In Turkey total Q3 offtake, at 99 tonnes, was up 15% on the levels of a year earlier, with investment demand smashing all previous records to reach 31.7 tonnes.
- Gold supply was down 9.7% on year-earlier levels, largely driven by a significant reduction in central bank sales. Sales under the Central Bank Gold Agreement (CBGA) totalled a provisional 357 tonnes in the CBGA year ending September 26, the lowest annual figure since the first Agreement was signed in 1999.
The word "Record" was used 11 times in a one page press release! But the most interesting of all is this:
As the financial crisis deepened these increases in identifiable investment demand were offset by outflows in "inferred investment". This was characterized by hedge funds liquidating investment positions in gold as they were forced to raise cash and by institutions liquidating commodity index investments, including gold, as fears of recession deepened. The trend largely reflects gold’s better performance relative to other assets and also explains why the gold price did not perform better during the quarter in the face of very strong demand.
Notice the categorization of "inferred investment". The physical gold market was ON FIRE breaking all records while the paper market of futures contracts (inferred investments) was being sold off. As we know this was instigated by 1 or 2 US banks selling short 10% of annual gold production and 25% of annual silver production in 4 short weeks during July.
When you see the massive record breaking physical demand one has to wonder where the banks might source such supply if they had to deliver on the contracts and WHY would anyone sell such a massive amount of "inferred investment" with the physical market on fire. This is ABSOLUTE VINDICATION of GATA’s WORK. The only viable reason was this was intended to cool off the physical market. It obviously failed. On the contrary it probably stimulated the physical market as real money was being sold at a discount.
The most important point about this report is that the huge record breaking physical demand has to be met with real record breaking supply…but mine supply has declined 9.7% and Central Bank sales that have been reported are declining. This would imply that gold sales or loans that are not being reported are having to fill the growing gap between demand and supply. Such a supply squeeze is totally consistent with the Mints limiting supply, coin melt bars from Fort Knox showing up on the market, and gold supply being rationed to India with pathetic excuses of credit risk exposure and the unprecedented massive covering of the traditional shorts on the TOCOM who are going neutral to net long!
The sell off on COMEX is liquidation of demand for gold that doesn’t exist. This has helped the Cartel but it has NOT SOLVED THEIR PROBLEM OF LACK OF SUPPLY. There are still 250,000 gold futures contracts outstanding that are above and beyond the ability of the COMEX to deliver. A percentage of these contracts will stand for delivery. Perhaps it will be a large percentage, who knows? but we will soon find out. A percentage of this "inferred investment" can shortly become REAL DEMAND for PHYSICAL METAL. You can see from this report that the record demand has strained the system to the limit and created unprecedented shortages. The system can not deliver on even 10% of the Open Interest currently outstanding on COMEX. The stage is set for a coming massive short squeeze.
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