Record-breaking central bank and ETF buying boosted 2019’s first half demand to a three-year high, according to the World Gold Council. Also contributing to demand was a more positive environment for Indian consumers, which have always been big jewelry buyers.
The WGC further noted that as the gold price moved higher that profit-taking kicked in and retail investment all but dried up. Not exactly the case at CMI Gold & Silver Inc.
Yes, there was selling as gold’s price moved higher, but there was also considerable buying because buyers could get standard products, such as Gold Eagles, Krugerrands, and 100-oz silver bars, at lower premiums. When the primary supplier of such products are the mints, the products carry much higher premiums. Because of the selling, premiums are much lower. That remains the case today.
Further, this precious metals bull market is now in its fourth year, the bear market having bottomed December 2015. It has hardly been recognized and still has a long way to go. Lower interest rates, which the President is determined to have, seem to be in cards. September is the next FOMC meeting, where the Fed discusses interest rates, and already there is speculation that another cut is likely.
When the Fed announced its Wednesday cut, gold dropped $19 (right along with stocks.) However, gold is now up $30 and stocks continue to sink. The Dow Jones Industrials closed today 672 points below their Wednesday high.