So, what did the retail gold purchaser do since the price hit a new high after five years? Well, it appears as if they took this opportunity to sell a great deal of metal, quite the contrary of the Paper Gold Buyer. And we can see this in the very weak need for the U.S. Mint Gold Eagles. The U.S. Mint reported sales of just 5,000 oz of Gold Eagles in June:
Gold Eagle Earnings Feb-Jun 2019 = 43,500 oz
Of course, the figures reported by the U.S. Mint are for the Authorized Purchases, who sell to the general public, but they’re a fantastic indicator of the total requirement by the physical investor. As an Example, Once the announcements for England’s Brexit vote (to leave the European Union) as well as the Chinese Authorities Yuan-denominated gold benchmark at April 2016, the U.S. Mint Gold Eagle sales surged:
Precious metals shareholders need to understand that there are two Gold Markets… just one physical and one paper. Sure, even if investors could just purchase physical gold rather than the countless thousands or millions of COMEX Paper contracts and Gold ETF shares, then we’d observe a higher gold price… but the whole marketplace is set up that way.
Finally, when the Fed and Central Banks lose control of the economies, watch as physical gold and silver buying hit levels never noticed before. While its highly probable the paper golden buyers are going to breaking new documents in the COMEX and GOLD ETFs, the actual winners will be acquiring the PHYSICAL METAL.
For instance, the U.S. Government creates money to issue or buy back U.S. Treasuries. There is not just manipulation of silver and gold ; IT’S EVERYWHERE. And, as I have mentioned, why can investors buy gold and silver right now when they could make 200-300percent in stocks such as ROKU:
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It wasn’t until the Fed failed an about-face in June and announced it would seriously think about cutting prices in July did that the gold price spike above $1,400… because of enormous newspaper gold requirement to the COMEX and Global Gold ETFs. As stated by the World Gold Council, Global Gold ETFs undergone a 126.7 metric ton net inflow in June, the greatest annual amount in seven decades.
Gold Eagle earnings were more than eight times greater in Feb-Jun 2016 than they’re this year. This suggests the physical retail gold buyer isn’t the essential driver of cost; it’s been the newspaper gold purchaser. That being said, I think we are likely to eventually find a RECORD amount of gold buying when we see a enormous increase in FEAR and FINANCIAL INSTABILITY as the markets and markets eventually head across the horizon.
The gold price took up today after Fed Chair Powell declared that a rate reduction in July was still possible. Therefore, the markets took Powell’s comment as being very Dovish, which pushed the Dow Jones Index up 180 points at the high. That is the sort of insanity now that has taken over the industry.
Gold Eagle Sales Feb-Jun 2016 = 376,500 oz
Back in June, the cost that was gold eventually broke over the $ 1,400 amount after five years. So, who had been in charge of pushing the gold price to a brand new top since 2013? But if we look at the information, it certainly was not the gold purchaser. And, according to several dealers I talked with, real gold retail investors took advantage of the $1,400+ price to market metal rather than be large buyers… that I found very intriguing.
As I mentioned in a number of posts, Traders, Hedge Funds, and Institutions look at crucial resistance and support levels, whether or not precious metals investors follow Technical Analysis. Thus, when gold finally broke above that $1,360 degree, it closed up all the way to $1,440 before adjusting. Even though the Technical Evaluation pointed into a breakout above $1,360, it was the announcement from the Fed of possible rate discounts that caused traders, Hedge Funds and Institutions to induce gold to five-year highs.
By Currency Metals News Service
Now, I really don’t know whether all of the physical gold made it to these Gold ETF’s last month or in the event the custodians hold all of the gold that they report in their own inventories. I am not a newspaper gold purchaser, but I look at what happens from the international Gold ETFs as a BAROMETER of cost and the market.
As we could see, Gold Eagle earnings have been trending lower as the start of the year. I omitted sales in January because they generally are very high on account of the new issue being released. Regardless, require for Gold Eagles has been weak, indicating that the real gold investor isn’t motivated to purchase at this moment.
And, if we look at the Worldwide Gold ETF Flow data set out by the World Gold Council, June 2019 had the Maximum amount of inflows for the past seven years:
We can see that when the broader markets were crashing into December 2018, the gold price shot up in addition to the inflows to the international Gold ETFs. However, after the Fed came in and reassured the economies, along with the listing 4 trillion Yuan hauled to the domestic market in January 2019 by China’s Central Bank (origin: Mike Pento interview Greg Hunter)the gold price subsided from the subsequent months as did the requirement for Gold ETFs.
Sales of U.S. Gold Eagles climbed to 105,000 ounce , up from 38,000 during the prior month. However, as the gold price increased to $1,366 in July 2016, Gold Eagle earnings fell to just 38,500. Thus, it does not seem like the short term price rises are the main motivation behind the real retail gold investor. Rather, retail physical gold investors have a tendency to buy more when there is money, Financial Instability, or significant price volatility… for example gold reaching new highs or lows.
ROKU still hasn’t made any real money, even though analysts say that it will take five years for the company to be profitable. I can assure you, that when the markets eventually correct and the economy heads into an overdue recession (or possible depression), ROKU will not be making profits.
Thus, in a strange and odd type of way, we could thank the Paper Gold Buyer for gold above the significant $1,360 amount which I wrote about in my essay, FINALLY… GOLD BREAKS OUT THROUGH KEY 5-YEAR RESISTANCE LEVEL. Here we can see gold eventually pushing through the primary $1,360 amount in this monthly chart:
However, if we are aware of the mind of the bigger retail investor, it is not really that surprising. The retail physical gold investor tends to purchase more metal if there’s fear, financial uncertainty, or extreme price volatility in the markets. So, if it wasn’t the physical gold investor accountable for the $1,400+ price movement… then that was?