Price of Gold and the Media

That is a good point. The general public doesn't seem to want gold yet, and this is another sign that the bull market has farther to go before the top.

 

Log in or Sign up to hide this ad.

IDK Cloud. I would agree with both of you it would be an end signal, I simply don't remember the general public BUYING that heavy in the last market runup. For gold, (ignore silver due to the Hunts), in 1979/80, I remember a lot more selling than people wishing to buy. What was the signal then? Would there HAVE to be general public buying to signal an end?

 

Gold consumption in US has been flat or slight decline for last 2 decades.

 

I remember TV stories with photos of people lined up around the block to buy gold. I remember people at work talking about how they pulled their savings out of the bank to buy gold. I remember listening to the business report on the car radio in the morning and the lead story was the daily move in the stock prices for gold miners. Nobody knows if this will happen again, but it seems doubtful that the current condition of the gold market will mark the end of the bull market. At least that's the way I'm playing it.

 

Do you have a source for that?

Thanks.

 

This actually brings up a point. US consumption won't be critical, right? Is it REALLY US consumption that we worry about, or world consumption? If you look at China and India gold consumption has been going up considerably in the last few years.

 

This is because interest rates (prime rate) in 1980 hit 20% and someone could simply put their money in an ordinary insured savings account and earn 12-15%. Simple savings bonds purchased from that time turned out to be a windfall for those who held them for their entire 30 year life. Holding gold or silver does not make sense in this scenario because there is no need to hedge against the $. This is why people sold their physical assets because with interest rates such as that, cash was king.

There is nothing like this now. Rates are being deliberately held low in a futile attempt to protect the TBTF banks, the housing & car industry, and to keep the stock market propped up. Unless you are one of the very few beneficiaries of this governmental intervention, then there are few options to hedge against it. Gold and potentially silver are one method.

 

Scroll down page 20 US demand for gold (in jewelry and investment coins) declined for 2010 compared to 2009.

http://www.scribd.com/doc/49201507/World-Gold-Council-Global-Demand-Trends-Q4-2010-02172011

Overall Gold Consumption vs production by USGS.
http://minerals.usgs.gov/ds/2005/140/gold.pdf

 

China imported more gold in Q3 of this year than they did in all of 2010, and 2010 was a record year for them. US consumption is not much of a factor IMO, we are not on the ball in this race.

 

You must not have noticed their consumption figures include paper gold. That is the gold leveraged in ETFs. There was a 50% drop in people buying paper gold which offset the purchases of physical gold. Remove the paper gold from it and you will see a marked increase in gold consumption.

It also excludes central bank purchases/redemptions.

 

It should come as no suprise that the hacks on CNBC and other main stream financial media are consistently bashing gold. These outlets are little more than shills for Wall Street. Look at who advertises on CNBC; Paine Webber, Smith Barney, Morgan Stanley, Merrill Lynch etc, etc.

If you're putting your money in physical gold or silver instead of the equities to which they control access, that's money that the brokers and financial advisors who bankroll these media outlets aren't getting a commission or a management fee on.

Always know and recognize the agenda of the media organization from which you get your information, it will help you interpret the information and put it into context.

 

Not sure what you are talking about it specifically breaks down jewelry and coin investment and it doesn't mention anything about etfs. Jewelry sales has clearly declined.

 

I am talking about Table 2 & Table 3 Gold Demand -USA on the link you provided.

http://www.scribd.com/doc/49201507/World-Gold-Council-Global-Demand-Trends-Q4-2010-02172011

It breaks down exactly what those categories mean, and they are counting paper gold in the coin/invest category.

 

I was looking mainly at Jewelery gold sales which is what we were talking about (gold sales in pawn stores).

 

Ahh OK, Then it seems to me it's a bit of a stretch to say this:

"Gold consumption in US has been flat or slight decline for last 2 decades. "

 

Remember reading an article that stated that but can't find it only data i can find is from USGS but it doesn't break it down by sectors. Regardless it does show that gold sales here were flat from 09 to 10 and US consumers are mainly selling ?

 

Well... it wouldn't surprise me that US consumers are buying less jewelry. With real unemployment exceeding 25%, close to 50M on foodstamps, falling incomes, and people being tossed out of their homes, I should image that jewerly sales have dropped. On the other hand, IMO, people buying silver and gold for investment purposes is going up. One only has to look at mint sales for indications of that.

 

Can't use US mint sales to track US consumer demand since a lot of that is exported.