This Is a Big Deal for Gold Prices
If you want to know where gold prices are going, then look at the demand. It suggests the precious metal could see a massive move to the upside and it could happen sooner than later. Saying the least, buyers are increasing despite gold prices remaining low. As I see it, this is bullish for gold prices ahead.
Consider that as of January 28, the U.S. Mint has sold 124,00 ounces of gold in American Eagle coins. In the entire month of January 2015, the Mint sold just 81,000 ounces of gold in American Eagle coins. This represents an increase of 53% year-over-year. If we assume this is the final figure for January, then it would be the highest since 2013. (Source: “Bullion Sales/ Mintage Figures,” U.S. Mint, last accessed January 28, 2016.)
Don’t for a second believe that the U.S. Mint is the only place witnessing higher demand. In the third quarter of 2015, the Royal Canadian Mint reported gold bullion demand popped 135% year-over-year.
As far as future demand is concerned, the president and the CEO of the Royal Canadian Mint, Sandra L. Hanington, said, “With still more room to grow our numismatic and bullion businesses and emerging opportunities on the international coin market, the Mint is facing the future from a position of strength.” (Source: Royal Canadian Mint, November 25, 2015.)
Don’t forget the two biggest consumers of gold: India and China.
Take China, for example; it continues to impress us. In the entire year of 2015, China imported 861.7 tonnes of gold from Hong Kong alone. This amount was 813.1 tonnes in 2014. But to bring in the real image of how much the demand is for the precious metal, know that China is the biggest gold-producing country in the world. It’s not only consuming the local gold supply, but it’s also bringing in an immense amount of gold from outside. (Source: “UPDATE 1-China Dec gold imports through Hong Kong highest since 2013,” Reuters, January 26, 2016.)
Demand is up in India, too.
According to the All India Gems and Jewelry Trade Federation, the country imported 850 tonnes of the yellow precious metal between January and September. In the same period a year earlier, in 2014, it imported 650 tonnes.
But here’s the kicker: the federation predicts that India is on track to import 1,000 tonnes of gold—for the first time ever! (Source: “Gold imports may cross 1,000 tonnes this year,” The Economic Times, November 26, 2015.)
The Bottom Line for Gold Prices
I have talked about this over and over here at Profit Confidential. Buyers are still gobbling up all of the gold they can get their hands on. At some point, this will translate into higher gold prices.