“For gold to extend its current modest rally into a move beyond $2,000 an ounce, it will more than likely need the support of the physical market and this means more buying by consumers in China and India,” argues Reuters market analyst Clyde Russell.
Referencing the above graph showing the divergence in price and demand, he writes that “While China’s gold consumption may have gained, given that Hong Kong’s exports to the mainland nearly doubled in July, it’s still unlikely to have recorded the kind of jump needed to bring physical demand back into correlation with the third-quarter price gains. It’s the same story for India, with imports likely to have improved in the third quarter as the rupee gained strength, but unlikely by enough to give a physical platform to gold’s rally.
Right now it appears central bank buying remains solid, investment demand has picked up with a 6 percent gain in holdings by exchange-traded funds since the end of July, but it remains to be seen if Indian and Chinese demand has improved. If it has, then the case for a gold rally may be complete, but if the third quarter growth in the world’s top two consumers is modest, then gold’s rally will look shaky.”
MarketWatch/Jesse’s Café Américain: Gold futures tumble 0.7% on Europe’s woes; silver off 1¢; Gold and silver charts: Silver turns it around
Washington Post/Financial Times: Why Europe is looking like a mess (again); Euro zone deal over bank bailout in doubt
KWN: Tom Fitzpatrick – What to expect next after the recent surge in gold & silver; John Hathaway – Gold shorts to panic as this key level is breached
Mineweb/Business Insider: Don’t fool yourself, gold is unlikely to go up forever; Deutsche Bank: Here’s how to know when gold prices are too high
Zero Hedge: Presenting Warren Buffett’s “Gold Cube“; 39% of South African gold production is now offline
MoneyWeek: Is the world running short of gold?
Globe & Mail/Got Gold Report: Precious metals funds: Silver emerges from gold’s shadow; Eric Sprott on CNBC
MarketWatch: Morgan Stanley: Silver to outperform gold in fourth quarter and 2013
Hard Assets Investor/Commodity HQ: ETF holdings hit records as investors buy millions of ounces of gold & silver, prices poised to spike
Bloomberg/CNBC: Fed’s Evans calls for more easing, warns of ‘lost decade’; Fed virtually funding the entire U.S. deficit
Eric Parnell/WSJ: Where has the stock market’s QE rally gone?; QE rally not yet over
Gary North/MarketWatch: Five mainstream economists sound a warning; 8 early warning signs inflation is percolating
Hugo Salinas Price/Alt-Market: Comparing the negative effects of war and fiat currency; Globalist think tank suggests using engineered event as excuse for war with Iran
Guardian: “Inside Job” director Charles Ferguson: Why the 2012 election will be another inside job