'Twas the night before Christmas, when all through the market, not a trader was stirring, not even a goldbug…
Well, maybe not. But many gold investors have grown rather quiet as 2013 comes to a close. So by way of a reminder that spring follows winter, especially in cyclical markets, Casey Metals Analyst Laurynas Vegys has collected some encouraging thoughts for us all.
We'll be taking a break from these daily dispatches until January 2, so I want to add my personal encouragement to all our readers—and thanks for your interest and frequent support.
May you all have wonderful holidays—whichever one(s) you celebrate—and may we all have a very, prosperous 2014!
Senior Metals Investment Strategist
|Rock & Stock Stats||
One Month Ago
One Year Ago
|Gold Producers (GDX)||20.53||22.85||45.07|
|Gold Junior Stocks (GDXJ)||29.28||33.38||80.84|
|Silver Stocks (SIL)||10.60||11.60||22.38|
|TSX (Toronto Stock Exchange)||13.399.60||13,430.01||12,388.71|
It's been one of the worst years for gold in a generation. A flood of outflows from gold ETFs, endless tax increases on gold imports in India, and the mirage (albeit a convincing one in the eyes of many) of a supposedly improving economy in the US have all contributed to the constant hammering gold has taken in 2013.
Perhaps worse has been the onslaught of negative press our favorite metal has suffered. It's felt overwhelming at times and has pushed even some die-hard goldbugs to question their beliefs… not a bad thing, by the way.
To me, a lot of it felt like piling on, especially as the negative rhetoric ratcheted up. This year's winner was probably Goldman Sachs, calling gold a "slam-dunk sale" for 2014 (this, of course, after it's already fallen by nearly a third over a period of more than two and a half years—how daring they are).
This is why it's important to balance the one-sided message typically heard in the mainstream media with other views. As you break for this holiday season, we'd like to leave you with some of those contrarian voices, all of which have put their money where their mouth is…
And then there's the people who should know most about how sound the world's various types of paper money are: central banks. As a group, they have added tonnes of bullion to their reserves this year…
China will end 2013 officially as the largest gold consumer in the world. Chinese sentiment towards gold is well echoed in a statement made by Liu Zhongbo of the Agricultural Bank of China: "Because gold has capabilities to absorb external economic shocks, growth of its use in the international monetary system will be imminent."
And those commercial banks that have been verbally slamming gold—it turns out many are not as negative as it might seem…
None of these parties thinks the gold bull market is over. What they care about is safety in this uncertain environment, as well as what they see as enormous potential upside.
People say the gold bull is dead? Bah, humbug!
We can speculate about when the next uptrend in gold will set in, but the action for today is to take advantage of price weakness. Learn about the best gold producers to invest in—now at bargain-basement prices. Try BIG GOLD for 3 months, risk-free, with 100% money-back guarantee. Click here to get started.
According to the US Geological Survey, the US exported 416 tonnes (13.3 million ounces, Moz) of gold bullion through September, 47% more than during the corresponding nine-month period in 2012, which surpasses by 12% the total exports of 371 tonnes (11.9 Moz) during the entire year.
More than 80% of the exports went to three major destinations: Hong Kong (176.3 tonnes or 5.6 Moz); Switzerland (130.9 tonnes or 4.2 Moz); and the UK (26 tonnes or 0.8 Moz). As we've written before, much of the Hong Kong gold ends up in China.
During the first 11 months of 2013, gold exchange-traded products (ETPs) have had record outflows of $36.4 billion, data from asset manager BlackRock suggests. "This year we see an unprecedented exodus from gold ETPs, and next year it is expected that global holdings can be pushed to their lowest since the 2008 financial crisis, as an improved outlook for the world economy weakens the investment case for bullion."
ETPs and ETFs—so-called "paper gold"—proved to be a popular way to invest in gold since their inception in 2003. Being one of the easiest ways to invest in gold, it's also one of the easiest to sell.
Most buying has been of physical metal. Even in strongly pro-gold China, ETFs are not that popular. As Reuters reports, the newly launched gold ETF in China had a muted start because investors there have a strong preference for physical products. Interest in gold ETFs could change in China…
China's Reforms May Boost Gold ETFs (Wall Street Journal)
Gold consumption in China could accelerate as the country shifts toward more market-oriented policies. Beijing pledged after its Third Plenum last month to give the market a more decisive role in a number of sectors—which could lead to policies that make it easier for investors to access gold exchange-traded funds.
"I don't think investors will shy away from investing in gold … instead I think more people will buy gold and invest in it," said Roger Liu, the WGC's investment director for the Far East, adding that investment demand for gold will pick up further as Chinese become wealthier.
Given the relatively low consumption level—per-capita consumption of 4.5 grams per year compared with a 24-gram global average—China is poised to be the biggest gold consumer not only this year, but during the coming decade.
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