I'm back from my gold show. I learned a couple of facts. Global demand for gold, according to the presenters, is 4000 tons per year. 2700 tons are mined every year. The rest comes from selling gold that is already above ground.
The GLD ETF owns around 300 tons. They contend that GLD is not having that big of an impact on gold. You can decide for yourself.
In addition to the US based ETF there is also one in the UK, Australia and South Africa. I asked about retail demand growth, and for now the largest source of investor demand is coming from the US. The World Gold Council expects to list an ETF in Hong Kong soon. Successfully penetrating the China market (through Hong Kong) and its 1.3 billion people would be big and could move the price of gold. However I doubt all 1.3 billion Chinese will be buying gold, probably more like 900 million (humor attempt).
One other thing came up and that was silver. I don't have the numbers, but if the silver ETF comes to be, the existence of the ETF could have a much more visible effect on the price of the metal. The idea behind this numberless assertion is that silver gets consumed where gold does not.
I can't vouch for any of this but it makes intuitive sense and is something I plan to look into. If the silver story is accurate, I will be buying across the board when it lists. Let me stress IF IT IS ACCUARATE. I do not know the answer yet. All I am suggesting is to try to research it. Hopefully this is clear.
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4 comments:
Re: silver ETF -- have you seen this? http://www.dailykos.com/story/2005/9/16/83732/1257
great stuff, thank you!
Great gold information!
I've been working on a new gold nugget website. Please visit it at:
http://www.california-gold-rush-miner.us
Tim
Hello Roger:
You have inspired me to write a post on the gold/silver question.
"The idea behind this numberless assertion is that silver gets consumed where gold does not."
My major points are that I see gold also being consumed especially in the area of dental.
While commodity prices can not go to zero price, they are not a hedge on inflation. The return on these investments over time has a nominal rate of return of zero or negative. Which means it does not even increase in value over time, let alone keeping up with inflation.
But of course any thing that has price moves is potential for short term gains.
The Peak production of Silver/Gold has passed us by. Hurry hoard that silverware.
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