Indian imports for gold is down, as surging gold prices has cut down on demand for the precious metal, according to Citigroup (NYSE:C).
“Import data indicates that the surge in gold prices during May appear to be taking their toll,” Citigroup economists said in the report. “Although jewelry demand is typically price inelastic, the run-up in prices has begun to hurt consumption.”
Gold acquisitions in the country dropped by over half, as only 16 metric tons to 17 metric tons were purchased in May, plunging from the 34 metric tons acquired in April.
India has been the largest consumer of gold in relationship to jewelry use, although it really hasn't been a factor in gold prices during the year, although in the wedding season it at times can give it a bump up in price.
Economics is what's driving gold prices now, and that's the reason Indian demand for gold is down. That won't be a factor in the price of gold going forward, but a consequence of it.
Showing posts with label Gold Jewelry. Show all posts
Showing posts with label Gold Jewelry. Show all posts
Monday, June 21, 2010
Saturday, June 12, 2010
Citigroup (NYSE:C) Sees Silver Outperforming Gold
Over the medium term, Citigroup (NYSE:C) says silver prices could outperform gold prices, as industrial demand for silver continue to rise.
Citigroup analyst David Thurtell said this, "Gold is likely to encounter repeated resistance at the US$1,250 mark over the coming month. The seasonal low period for buying in India is upon us, which will take some of the heat out of the market."
Over the six to twelve months, Citigroup thinks silver could reach $20 an ounce.
I'm not that impressed with the idea Thurtell is making his decision in what appears to be seasonal fluctuations in demand from India, which is high during their seasonal wedding periods.
To tie the existing gold market into India gold jewelry demand doesn't compute, and doesn't account for any of the factors as to why gold prices continue to rise.
That being said, the possibility silver will rise higher than gold in the medium-term is definitely a possibility, although it has nothing to do with whether the people of India are buying gold jewelry.
Citigroup analyst David Thurtell said this, "Gold is likely to encounter repeated resistance at the US$1,250 mark over the coming month. The seasonal low period for buying in India is upon us, which will take some of the heat out of the market."
Over the six to twelve months, Citigroup thinks silver could reach $20 an ounce.
I'm not that impressed with the idea Thurtell is making his decision in what appears to be seasonal fluctuations in demand from India, which is high during their seasonal wedding periods.
To tie the existing gold market into India gold jewelry demand doesn't compute, and doesn't account for any of the factors as to why gold prices continue to rise.
That being said, the possibility silver will rise higher than gold in the medium-term is definitely a possibility, although it has nothing to do with whether the people of India are buying gold jewelry.
Friday, April 2, 2010
China Running Out of Gold?
China's Gold Supply
China has increased gold production in the country in a relatively few years to become the largest gold producer in the world in 2007. That surprised everyone at the time because to do it China's output grew at an extraordinary annual rate of 84 percent.
At that rate of production, the question must be raised as to whether China is going to run out of gold any time soon.
If they continue at the production rate they're currently at, China would run out of gold in about six years. That of course assumed no other gold is found and no mines come online.
But it does take time to get mines ready for production, so the supply of gold in China is going to pull back in the near future, and it's something to keep in mind in the years ahead.
One other interesting factor, is demand for gold in China is growing at a rate of about 13 percent annually, with the majority of that being used for jewelry. India has largely been the retail leader in that area for decades, and it didn't have much effect on the prices of gold. But add China retail jewelry demand, and you could have a demand for gold unique in history, as far as the amount of that demand is.
Right around 80 percent of China's demand for gold is from the jewelry industry.
As they get used to investing in gold - which they will because the government is encouraging them in that direction - that will create even great demand with a diminishing supply.
Anyway, we're in for interesting times for gold, and if China does begin to run out of gold, or at minimum assuredly slow down significantly in production, it's anyone's guess as to where the price of gold will go if investment demand continues for years and a significant jewelry demand from China creates a sigificant secondary market for the metal.
China has increased gold production in the country in a relatively few years to become the largest gold producer in the world in 2007. That surprised everyone at the time because to do it China's output grew at an extraordinary annual rate of 84 percent.
At that rate of production, the question must be raised as to whether China is going to run out of gold any time soon.
If they continue at the production rate they're currently at, China would run out of gold in about six years. That of course assumed no other gold is found and no mines come online.
But it does take time to get mines ready for production, so the supply of gold in China is going to pull back in the near future, and it's something to keep in mind in the years ahead.
One other interesting factor, is demand for gold in China is growing at a rate of about 13 percent annually, with the majority of that being used for jewelry. India has largely been the retail leader in that area for decades, and it didn't have much effect on the prices of gold. But add China retail jewelry demand, and you could have a demand for gold unique in history, as far as the amount of that demand is.
Right around 80 percent of China's demand for gold is from the jewelry industry.
As they get used to investing in gold - which they will because the government is encouraging them in that direction - that will create even great demand with a diminishing supply.
Anyway, we're in for interesting times for gold, and if China does begin to run out of gold, or at minimum assuredly slow down significantly in production, it's anyone's guess as to where the price of gold will go if investment demand continues for years and a significant jewelry demand from China creates a sigificant secondary market for the metal.
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