Thursday, May 3, 2018

Gold prices in 1st quarter of 2018 following same trajectory as in 2008 as demand falls off to 10 year lows

Even through the Financial Crisis of a decade ago took place in steps over the entirety of 2008, it wasn't until a year later that gold prices really began to climb.  And ironically in 2008, the gold price actually stagnated from its previous two year move as banks and investors sold off long-standing assets to get liquidity for what would become a 60% stock market collapse.

And now that peak equities appear to have been reached in this current eight year Bull Market, gold seems to be moving in a similar trajectory as in 2008, with today's report that demand for the metal during the 1st quarter of 2018 was the lowest seen in a decade.

Overall global gold demand fell to its lowest first-quarter level since 2008, driven by a slump in demand for gold bars and exchange-traded funds backed by the precious metal, according to a report from the World Gold Council released Thursday. 
Total gold investment demand fell to 973 metric tons in the first quarter, down 7% from 1,047 metric tons in the first quarter of 2017, the WGC reported. The decline came as total investment demand dropped 27% to 287 metric tons from the same time a year earlier. 
“A buoyant economy coupled with a lacklustre gold price saw U.S. Mint Eagle sales fall 59% [year on year] in Q1 2018,” the report said. 
Data from the U.S. Mint showed sales of 4,500 ounces of American Eagle gold coins in April, down 25% from the same month a year earlier. - Marketwatch
If the current trend continues to follow that of a decade ago, then 2019 should be a very strong year for gold, especially if the equity markets succumb to a crash or correction, or if inflation proves to be too much for central banks to deal with. 


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