Will gold and silver follow the same pattern twice-repeated over the past decade so that we can expect outsized price gains in the precious metals the next two years? Yes, I think so because gold and silver remain undervalued, and the world's monetary and financial problems have not been solved. The correction is now over, the new floor is in place, and investors should expect to see spectacular moves for gold and silver over the next two years. - James Turk, King World News (KWN)Recently there has been a lot of "noise" about the level of global gold demand. A lot of the so-called "data" comes from the World Gold Council, which because of its name is considered an authority on annual supply/demand data. But in studying this sector as closely as I have for the past 12 years, I can't find anyone considered knowledgeable who thinks the WGC's data is reliable. For instance, in general the WGC is nothing more than an de facto industry association for the global jewelry business, and most of its data reflects demand data from that segment of the market. They completely ignore the voracious ongoing accumulation by many big Central Banks. The truth is, no one really knows for sure just how much gold is being "consumed" globally both overtly and covertly.
I wrote a piece addressing this issue, mostly in response to a piece posted on Seekingalpha last week making the claim that lowered gold demand would lead to lower gold prices. The article relied heavily on source links that referenced the World Gold Council numbers:
As you can see, the truth stands much larger than myth. The demand of gold/silver is not only unequivocally not in decline, it is in fact globally getting even stronger. This will underscore what I expect to be a significant price rise in gold and silver during 2013.Here's the link: Lack Of Demand....?
The one thing I can say for sure: the fact that gold has gone up every year for the past 12 years, despite the heavy headwinds of western Central Bank/Government price suppression schemes, is evidence alone that the demand for physical gold is far greater than the supply. Moreover, the supply of printed fiat currencies of all nationalities is accelerating. It is this increasing supply that will push the relatively fixed supply of physical gold and silver a lot higher over the next several years.