Gold Buying Surges At U.S. Mint In November – China Buys 21 Tonnes In November Alone

Tuesday, December 8, 2015
By Paul Martin

By: GoldCore
GoldSeek.com
Tuesday, 8 December 2015

Editor’s Note: Despite gold at near 6 year lows, global demand for physical bullion remains very high. This is clearly seen in the recent demand data from the U.S. Mint and other mints. It is also seen in demand data from GFMS and the World Gold Council which shows very robust demand from Germany, India and of course, China.

There is also the very high official demand from central banks and, in particular, the Russian central bank and the People’s Bank of China (PBOC). Today came news that China’s gold reserves rose by another 21 tonnes in November, the biggest bout of gold buying since China began disclosing monthly data on China’s gold reserves in June – see Gold News.

Last week data showed that sales of American Eagle gold coins at the U.S. Mint surged in November, with gold demand nearly tripling month-over-month as bullion prices fell to multi-year lows.

Despite these very high levels of demand, gold prices fell sharply in November – from $1,141/oz to $1,070/oz or 6.6%.

Gold prices continue to be determined by traders and speculators in the futures market as evidenced by the Commitment of Traders (COT) data, showing that hedge funds now have record short positions. This typically occurs close to market bottoms and – along with the supply demand fundamentals – would suggest gold is close to bottoming.

Futures participants are eagerly awaiting the Fed’s interest rate decision next Wednesday, December 16th. Should the much heralded and anticipated 25 basis point rise materialise as is expected, then we expect gold could show further weakness.

Weakness into year end seems quite possible given the poor technical position, poor sentiment in western markets and momentum which can be a powerful thing. $1,000/oz gold seems increasingly likely and it appears to be gravitating to this big round number.

Chinese New Year looms and demand from China should provide support at these levels and should spur gains in January.

The Rest…HERE

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