I believe we have a genuine conspiracy on our hands. Someone or something is straight monkey hammering the price of gold on the stock market (what we
pay) to cataclysmic lows while the demand has never been higher for it. To what ends is wherein lies the conspiracy.
Someone, a group... a conspiracy i believe is artificially keeping the price of gold down for their own reasons, we can only speculate at this time
but i believe it's good ol supply and demand. There isn't enough gold in circulation to meet current demand, so to keep things from spiraling out
of control and crashing economies thereby making paupers from princes, the game continues. Here me out...
The Big Picture
How much gold, really, is 165,000 metric tons (the total mined throughout human history) and 2,500 metric tons (the total that’s currently mined
An Olympic swimming pool is 50 by 25 by 2 meters. It therefore contains 2,500 cubic meters of water. Each cubic meter of water is one metric ton. Gold
is 19.3 times as dense as water. Therefore an Olympic swimming pool would contain 48,250 metric tons of gold. It follows that 3.42 Olympic-sized
swimming pools could contain all the gold that’s ever been mined. Another way to imagine this is to think of all the gold in the world ever mined as
a single cube. That would be a cube with each side just over 20 meters, or 67 feet, in length. Given that about 2,500 metric tons of gold is mined
each year, this annual production of gold would fit in a cube whose sides were 5 meters, or 16.6 feet, in length. All the production of gold in the
world for a given year would thus fit in a 20 by 30 foot room with an 8 foot ceiling.
Keep that in mind. It's how much gold is physically out there.
Two different stories, and this is one reason why I'm calling foul. The talking heads are saying global demand for physical gold is low. That's why
the price is so low. Take a look Gold's Price Plunge Not Met by Stronger Physical Demand
FYI, when the price of gold drops bellow a certain price, mining it will cost more than the price invested into it.
"We have not seen a substantial increase in demand," agrees Victor Thianpiriya, commodities analyst at ANZ Bank.
That's from the same
source. Here's more so you get the picture painted to your average Joe
FOCUS: Gold Continues
Slide; Traders Watching For Pickup In Physical Demand
. Remember when market prices fall below the magic number, gold mines shut down or go
India is attempting to curtail it's consumption of gold. Why? The largest hedgefund said the demand is for it low so it must be and yet...
India Move to Douse Gold Demand Unlikely to Succeed
Monkey hammering. Demand is as high as ever in India and India has traditionally been the largest consumer of gold. Don't believe me? Smack!
Gold Demand in India Heads for
Quarterly Record After Price Drop
. That was about a month ago.
India has increased the duty on gold imports for the second time in six months, in an attempt to rein in surging demand for the precious
. Trying to curtail demand or consumption.
China? Next in consumption. How is it demand there? Visualizing Gold
Demand In China
. Let's get another angle so we can get an encompassing view on the real demand vs what's told.
Demand from China's two largest sectors - jewellery and investment - reached a combined total of 423 tonnes in 2009, with 314 tonnes supplied by
domestic mines. "This shortfall creates a snowball effect as China's gold industry may not be able to keep pace with the annual leap in domestic
consumption despite rising to be the world's largest gold producer since 2007," WGC said in the report.
China Gold demand may hit landmark 1,000 tons this
Demand in China is as strong as ever. To give you a backdrop, Asia (India and China) consumes more gold than the entire world combined. Just both of
them account for more than half global consumption. Remember what SPDR Gold Trust said, global demand for physical
(see how i bolded the
physical now) gold is low. And yet Asia is wants more!
What global physical demands?
Physical demand reached the point last week where it was overwhelming the New York markets slowly but surely. In
summary, the gold market is seeing sales from the SPDR gold ETF which have persisted for nearly three months now. The total held in the SPDR fund is
expected to fall below 1,000 tonnes this week if the sales continue as before. We do believe there is a core of holders keeping their gold for the
very long term, such as Paulson’s funds. What proportion of the fund these comprise is not certain, but we must be getting close to the point where
the selling stops. When it does the robust demand, particularly from China, will quickly absorb all available gold. The timing of that event is
impossible to say.
Translation; the demand for physical gold is surging and someone has to put the breaks on it as people are getting out of paper gold (a piece of
paper saying you own X amount of gold or ETF's
China and India physically rule to the gold market. Commercially, you mine gold, you sell it in India or China. Or use it to backup your currency
(the conspiracy). And the market demand for the physical is strong! Shouldn't gold prices reflect such a strong demand in gold? Perhaps we should
take a look at supply, maybe that can explain the low price of gold. If you have crates of gold sitting around, it should explain the low value.