Physical Gold Continues To Be A Investment Strategy
Sales of physical Gold rose 8% according to the recent World Gold Council’s report “Gold Demand Trends for the Third Quarter 2015.”
Total demand for the precious Yellow metal from July to October was 1,120.9 tons. Sales were led by strong demand for bars and government struck bullion coins. Sales of Gold jewelry grew a strong 6% and demand from central banks was the 2nd highest on record.
Bars and bullion coins were bought by both individual and institutional investors.
Economic data in Q-3 showed continued decline of the US and global economies. That led the US Fed to hesitate raising interest rates. Combined with low Gold prices, investors bought 295.7 tons of Gold. That is a 27% increase from Q-2 and a 33% increase Y-Y.
Bullion coin sales nearly 2X’d from Q-2 to 76.1 tons. This was the 2nd highest Quarterly sales over the last 15 years. The United States Mint sales of American Eagle Gold coins reflected this global rebound.
American investors were not the only ones interested in Gold bars and bullion coins. Europe’s bar and coin demand jumped by 33% and China’s demand rose by 20%.
Gold jewelry made a comeback.
Y-Y global demand increased from 594.1 tons to 631.9 tons. India led the new demand for Gold jewelry with sales up from 184.2 tons in Q-3 of Y 2014 to 211.1 tons in Q-3 of y 2015, a 15% increase. China’s Gold jewelry sales were up from 181.2 tons in Q-3 of Y 2014 to 187.6 tons in Q-3 of Y 2015, or a 4% increase.
The world’s central banks added 175.0 tons to their reserves in Q-3 of Y 2015. It was the 2nd highest Quarter of central bank Gold purchases on record. Russia led other governments by adding 77.2 tons.
Russia added a total of 144 YTD in Y 2015. China added 50.1 tons, bringing their total to 1,708.5 tons. This makes China the country with the 5th largest Gold reserves after jumping over over Russia.
While Gold prices continue to soften in anticipation of the US Fed raising rates in the near future, the demand for physical Gold has surged.
Wherever there is economic uncertainty, diversifying into some physical Gold continues to be a popular investment strategy.
Have a terrific weekend.
HeffX-LTN
Paul Ebeling
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