Two Promising Trends in Gold and Precious Metals

I try to keep an eye on a lot of sources. Some of them from far-flung places and industries.

One of those is the jewellery world. Where lately there have been a number of interesting happenings. Sending some important signals about the precious metals markets.

In short, metal demand from the jewellery industry is soaring. Spurred by rising buying interest at today’s considerably-lower prices.

In the U.K., for example. Where new stats show that demand for gold jewellery enjoyed its biggest increase in volume in 16 years, during 2013.

All told, gold jewellery consumption jumped 17% from 2012 levels. To a total 2,209.5 tonnes, according to the World Gold Council.

Elsewhere, we’re seeing a similar pattern of rising consumption. Even in places that can’t buy gold.

That’s been the case in India. Where recent restrictions on gold and silver imports have limited the amount of the metal available for sale in the country.

That hasn’t stopped value-seeking buyers however. Who have simply turned to another precious metal: platinum.

According to India’s Gems and Jewelry Export Promotion Council (GJEPC), that’s had a big impact on overall platinum demand. With imports of the metal into India jumping 140% year-on-year during January.

Taken together, these are both signs that precious metals markets are equalizing. With prices having fallen to a point where buyers are entering the market in a big way.

That increased demand comes even as supply is getting tighter. We’re continuing to get reports of precious metals mines closing globally, due to low prices. Right now focused around the highest-cost producing regions, like Africa.

These are both bullish factors for prices. If the world is demanding more gold and producing less, it’s only a matter of time until prices rise.

We have indeed seen some signs of life from the gold price the last few weeks. It won’t be a straight-line trend, and it could go lower before it goes higher again. But all signs are suggesting this is a promising sector to be in.

Here’s to bringing buyers and sellers together,

Dave Forest

dforest@piercepoints.com / @piercepoints / Facebook

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