Does a Gold Supply Crisis Loom?
If we look at the WGC (GFMS) headlines for the second quarter, it's pretty straightforward. Gold demand was down 7%, gold supply was down 6%. Looks pretty even, with perhaps a slightly bearish bias. Right? Wrong.
We don't even get to the end of the first paragraph before we begin to see the slipperiness of these numbers. We note that, expressed in dollar figures, gold demand was only down about 1%. So we immediately see the following dynamic: A 1% drop in (sales) demand -- virtually no decline at all -- is accompanied by a 6% drop in supply.
In other words, based upon GFMS' own numbers we see the decidedly bullish scenario of a market that can only be kept in balance if accompanied by steadily rising prices, a markedly different picture than what was presented in the headlines, and entirely different than what GFMS asserts in its analysis in talking about "The lack of a clear price trend..."
When a market can only be kept in balance with steadily rising prices, that certainly looks like "a clear trend" to me.Dig deeper into the numbers and we find that: ...
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