• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 6 days If hydrogen is the answer, you're asking the wrong question
  • 2 hours How Far Have We Really Gotten With Alternative Energy
  • 10 days Biden's $2 trillion Plan for Insfrastructure and Jobs
Why Oil Prices Rallied This Week

Why Oil Prices Rallied This Week

While the market navigates through…

Precious Metal Investors Face Continued Turbulence

Precious Metal Investors Face Continued Turbulence

Precious metal prices experienced downward…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Gold Buying Drops Almost 80 Percent In This Key Market

Gold strips

The gold price continues to look perky this week. With a move to near $1,350 per ounce having some analysts suggesting another breakout may be at hand.

And in the world’s biggest gold-consuming nation, those higher prices are still having a big effect on buying.

A new report Monday showed that gold consumers in India are still staying away from the physical market. In fact, they may be avoiding purchases more than ever — with the past month showing one of the biggest declines in buying since the gold price took off this past January.

That study came from gold analysts GFMS. Who estimated that India’s gold imports for July probably dropped a whopping 79.3 percent as compared to the same month in 2015.

The group pegged India’s July gold shipments at just 20 tonnes for the month. Suggesting that demand for this period may have been down by nearly 80 tonnes — a massive fall in overall demand.

This marks the sixth-straight month that India’s gold imports have fallen compared to last year. Showing that the effects of higher prices are far from abated in this key consuming center — in fact, the pinch in physical demand may be getting worse.

GFMS analysts noted that India’s gold sellers are still offering steep discounts in an attempt to attract buyers. With a survey of the market showing that many gold vendors are selling for as much as $100 below spot price. Related: Amid Drastic Reforms, Abu Dhabi Maintains 3.5M Bpd Target

That’s a record level for such discounts. Showing just how strong India’s aversion is to buying at higher prices right now.

At the same time, Reuters also reported that another problem is emerging — increased scrap supply of gold. With officials from local jewelry trade bodies telling the news service higher prices are coaxing a lot of recycled supply out of the woodwork the last two months.

All of which shows that physical demand is decidedly not the driver right now for the global gold price. Paper buying by investors and speculators continues to be the major factor here — which means we could see some big swings, up or down, if sentiment shifts.

Watch the trading — and keep an eye on the data from India, to see when buyers here will capitulate and start restocking.

Here’s to the golden months of summer.

ADVERTISEMENT

By Dave Forest

More Top Reads From Oilprice.com:

 


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News