• 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
  • 44 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 19 hours The United States produced more crude oil than any nation, at any time.
  • 6 days e-truck insanity
  • 2 days How Far Have We Really Gotten With Alternative Energy
  • 5 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 4 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 5 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 6 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 6 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 9 days Bankruptcy in the Industry
Mad Hedge Fund Trader

Mad Hedge Fund Trader

John Thomas, The Mad Hedge Fund Trader is one of today's most successful Hedge Fund Managers and a 40 year veteran of the financial markets.…

More Info

Premium Content

A Review of the Gold Fundamentals

With gold crashing through to $1,500 this morning, I thought that I would once against re-examine the fundamentals for the barbarous relic. That is most easily done by reading the Q1 report from the World Gold Council, the final authority on all matters regarding the yellow metal (click here for their link).

Among the many nuggets that I was able to glean was the fact that per capita gold ownership in the US is $1,197 per person. In China, it is $36. Chinese per capita incomes are rising dramatically. What do you think they are going to buy, with a fixed currency encouraging raging domestic inflation? In fact, a rising share of the global trade is moving to the Shanghai Gold Exchange, where imports of the yellow metal are sold to retail buyers.

The US is still on top with gold reserves of $372 billion, followed by Germany ($155 billion), the IMF ($128 billion), Italy ($112 billion), and France ($114 billion). In 2010, central banks turned net buyers of gold for the first time in 21 years, thanks to the end of a decade long liquidation of the European Community’s collective holdings, and that trend has continued this year.

Interestingly, the Gold Spider ETF (GLD) is now the sixth largest holder of gold, followed by China, Switzerland, and Russia. Despite rising prices, (GLD) actually saw a 69.5 metric tonne outflow in holdings in Q1. Perhaps this is smart money, like George Soros’ Quantum Fund, getting out at an intermediate term top? I believe that one of our many future financial crises will derive from redemptions hitting (GLD) faster than the market can handle them.

A weak US dollar and exploding American debt levels this year have been big factors in the rising demand for gold. But a little known fact is that gold is actually falling in price when valued in the currencies of several emerging markets, like India, China, and Turkey.

I think that a global “RISK OFF” trade will hit gold just as hard as the other precious metals and commodities, possibly taking it down as much as 20%-30%. But then the long term fundamentals will reassert themselves, ultimately taking it up to the old inflation adjusted all time high of $2,300. The great thing about gold is that they’re not making it anymore.

GOLD

GLD

ADVERTISEMENT

By. Mad Hedge Fund Trader


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