Gold producers accused over 'misleading' data


By Neil Hume
Financial Times, London
Friday, October 25, 2013

A furious row has broken about between a high-profile gold investor and the industry body charged with promoting the precious metal on behalf of the world's biggest gold producers.

Eric Sprott, chief executive of Sprott Asset Management, which runs several bullion funds, has accused the World Gold Council of painting a misrepresentative picture of the real demand for gold.

In an open letter published early this week --

-- Mr Sprott said a massive imbalance between supply and demand was not being reflected in the gold price because widely followed statistics circulated by the WGC were misleading.

... Dispatch continues below ...


How to profit with silver --
and which stocks to buy now

Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million.

Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets.

To learn about this report, please visit:

"Over the past few years, we have seen incredible demand for gold," he wrote in the letter. "But demand statistics reported by the World Gold Council consistently misrepresent reality, most with regard to Asia."

Mr Sprott believes annualised demand for gold could be more than 3,000 tonnes more than supply.

Gold has fallen 20 per cent this year and is on course for its first annual loss in more than a decade.

Concerns about an end to ultra-loose US monetary policy and heavy selling by institutional investors have been among the factors driving the price lower.

On Friday, gold, which started the year at almost $1,700 a troy ounce, was trading at $1,350.

"I urge the leaders of the WGC, for the benefit of their members, to improve the quality of their data and find alternative sources than GFMS, which paints a misleading picture of the demand for gold," Mr Sprott wrote.

GFMS, which is owned by Thomson Reuters, is a leading precious metals consultancy and produces one of the most authoritative reports on the gold industry.

But the WGC has hit back, saying Mr Sprott's estimates of gold demand lacked sophistication.

“The use of import data as a proxy to measure gold demand is somewhat simplistic and does not take into account factors such as round-tripping and stocking/destocking," the WGC said in a statement. "To effectively measure gold demand, a more detailed holistic analysis is required."

Thomson Reuters GFMS said it stood by its 2013 supply and demand gold estimates. The figures were "based on highly detailed on-the-ground analysis by a large team of analysts based around the world and which are figures supported by experts at the World Gold Council," the company said.

* * *

Join GATA here:

Mines and Money Australia
Melbourne Conference and Exhibition Centre
Tuesday, October 29-Friday, November 1, 2013

New Orleans Investment Conference
Sunday-Wednesday, November 10-13, 2013
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana

* * *

Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:

Or by purchasing a colorful GATA T-shirt:

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

To contribute to GATA, please visit:


Buy metals at GoldMoney and enjoy international storage

GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, ­taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: