Asia takes every ounce West unloads but gold will fall for two years, GFMS says

Section:

Gold Price Likely to Average $1,225 in 2014 as Investors Shy Away: GFMS

By Ben Kilbey
Platt's Metals Daily
Thursday, April 17, 2014

http://www.platts.com/latest-news/metals/london/gold-price-likely-to-ave...

LONDON -- A lack of investment interest in gold is starting to take its toll on the price, with an average of $1,225/oz forecast for 2014 and heading lower in 2015, GFMS said Thursday in its Gold Survey 2014.

The price forecast is 13% lower than the 2013 average of $1,411.23/oz.

"The price is expected to post 2014 lows in mid-year, with a fundamentally driven rally thereafter, but this is likely to peter out in early 2015," the Thomson Reuters/GFMS survey read.

Despite the "heavy visible sales from Exchange Traded Funds, driving a 25% price fall in the second quarter [of 2013], OTC investors were net buyers in 2013, notably in East Asia and the Middle East," the report read.

... Dispatch continues below ...



ADVERTISEMENT

Buy precious metals free of value-added tax throughout Europe

Europe Silver Bullion is a fast-growing dealer sourcing its products from renowned mints, refiners, and distributors. Because of a legal loophole that will close soon, you can acquire the world's most popular bullion coins free of value-added tax throughout the European Union. You can collect your order in person at our headquarters in Tallinn, Estonia, or have it delivered in any of the 28 EU countries.

Europe Silver Bullion is owned and operated by North American and European experts in selling, storing, and transporting precious metals. We have an extensive product inventory of silver, gold, platinum, and palladium, and our network spans the world.

Visit us at www.europesilverbullion.com.



Physical demand -- including official sector purchases -- came in at an all-time high in 2013 at 4,957 mt -- "a 15% increase over 2012 and some 703 mt higher than the supply of new gold and scrap" during the year.

"While demand is forecast to outstrip new gold plus scrap supply in 2014, the market is expected to be closer to fundamental balance than last year."

Rhona O'Connell, head of metals, GFMS research, and forecasts at Thomson Reuters, pointed out that ETF holdings peaked at 2,698 mt at the start of 2013 and fell by 880 mt over the year, for a net dollar outflow of $40 billion, while gold inventories on the major exchanges fell by 99 mt, "so these sources between them released not far short of 1,000 mt into the market last year."

Still, the analyst pointed out that, "this was easily absorbed by the voracious appetites in East Asia and the Middle East. As a result, metal flowed rapidly out of North America and the United Kingdom and much went through Swiss refineries for recasting from London Good Delivery -- 400 oz bars -- into smaller products favored by Asian investors."

Bar investment in Asia "rocketed by 43%, rising to 1,060 mt, from 740 mt in 2012, contributing to the global increase of 341 mt. Investment-grade jewellery gained 21% -- or 326 mt -- in the region, comprising the bulk of the 362 mt gain on a worldwide basis."

Looking at price action, O'Connell said that fundamentals point to a trading range of $1,200-$1,300/oz in the short term.

"There is however a distinct possibility of a slump towards $1,100, while as the year unfolds, seasonal strengthening physical demand could then propel prices towards $1,400 again. Investor appetite is not strong, however, and without this important element the price is expected to resume a downward course in 2015," she said.

* * *

Join GATA here:

Porter Stansberry Natural Resources Conference
AT&T Performing Arts Center
Margot and Bill Winspear Opera House
2403 Flora St., Dallas, Texas
Saturday, May 31, 2014

http://stansberrydallas.com/

Committee for Monetary Research and Education
Spring Dinner Meeting
Union League Club, New York City
Thursday, May 22, 2014

http://www.cmre.org/news/spring-meeting-2014/

Canadian Investor Conference 2014
Vancouver Convention Centre West
1055 Canada Place, Vancouver, British Columbia
Sunday and Monday, June 1 and 2, 2014

http://cambridgehouse.com/event/25/canadian-investor-conference-2014-inc...

New Orleans Investment Conference
Wednesday-Saturday, October 22-25, 2014
Hilton New Orleans Riverside Hotel
New Orleans, Louisiana

https://jeffersoncompanies.com/new-orleans-investment-conference/home

* * *

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

http://www.goldrush21.com/order.html

Or by purchasing a colorful GATA T-shirt:

http://gata.org/tshirts

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

http://gata.org/node/wallstreetjournal

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:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16



ADVERTISEMENT

Safe and Private Allocated Bullion Storage In Singapore

Given the increasing risks in financial markets, it is more important than ever to own physical bullion coins and bars and to store them in the safest vaults in the world in the safest jurisdictions in the world. Gold advocates Jim Sinclair and Marc Faber have recommended Singapore.

Now, with GoldCore, you can own coins and bars in fully insured, segregated, and allocated accounts in Singapore with the ability to take delivery. Learn more by downloading GoldCore's Essential Guide To Storing Gold In Singapore:

http://info.goldcore.com/essential-guide-to-storing-gold-in-singapore

And for more information call Daniel or Sharon at +44 203 0869200 in the United Kingdom or at +1-302-635-1160 in the United States. Or email them at info@goldcore.com.