As The Crisis Deepens, Gold Flows East – Part 1 (of 3)

Gold rose $1.50 or 0.11% on Friday and closed at $1,333.00/oz. Silver fell $0.17 or 0.84% and closed at $20.03. Gold and silver both gained last week 2.98% and 2.77% respectively.

Gold inched lower today after three weeks of bullish sentiment saw gains for the yellow metal. Caution arrived as investors await the U.S. Federal Reserve, the Bank of England and the ECB’s policy meetings this week. Bullish bets on gold futures and options increased this week from a fourth month high seen last week; on speculation that the U.S. Fed will keep interest rates low reported the CFTC on Friday.

Gold 5 Year – (Bloomberg)

At GoldCore we have been monitoring the activity of gold buyers with China and India top of the list, in the main due to the significant quantities both countries are ‘consuming.’ What is behind this significant rise in both public and private sector purchases and is it sustainable?

The July edition of Insight aptly titled ‘As The Crisis Deepens, Gold Flows East’ builds on our recent commentary and offers another viewpoint on why there is a marked flow of gold from west to east.

The next three editions of Market Update will quote extensively from ‘As The Crisis Deepens, Gold Flows East’ as we delve deeper into the story and its implications for our financial well being.

Crisis: the new normal

The parlous state of world financial markets has been underlined in the last few months with the selloff of all asset classes: stocks, bonds, commodities, and of course, silver and gold. We are just about due for a crisis.

We have had them like clockwork over the last thirty years. 1981-82, 1987, 1994, 2000-01, 2008-09: the intervening periods have been between six and seven years. But today there is an additional factor: the world faces a severe energy shortage that caps real growth prospects. Any realistic “solution” to this is intergenerational, making that light at the end of the tunnel very dim indeed for most adults alive today. One doesn’t electrify a transportation network overnight, or even in ten years.

World Conventional and Unconventional Oil Production and Price – (Campbell)

In spite of a huge rise in the price of oil, world oil production has been unable to climb. The production plateau is bounded on the upside by what the world economy can bear in terms of a price rise and on the bottom by what most businesses and people can afford to pay. This regime has ruled since the global conventional oil production peak in 2005, and there is no sign of this ending.

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