Associate Of Paul Craig Roberts Says It’s Bullshit That Physical Demand For Gold Is Collapsing

Tuesday, March 21, 2017
By Paul Martin

KingWorldNews.com
March 21, 2017

With the war in the gold market continuing to heat up, a former associate of Paul Craig Roberts said it bullshit that physical demand for gold is collapsing.

Dave Kranzler: Seriously? “Simon Black” (it’s a nom de plume) wrote an article titled “Demand For Physical Gold Is Collapsing.” He focused on retail bullion demand numbers. The headline and the content is largely fake news as it focuses on the demand for minted coins vs the paper gold market. We’re not really sure about the intent of article, but the content was devoid of any relevance to the actual global demand for physical gold…

While the retail minted coin and small-size bar demand is down from last year’s levels, there’s two factors to explain this. First is price. The price of gold and silver was lower in early 2016 than it is now. The price of gold in February 2017 averaged $1230-$1240 while the price of gold a year ago February averaged $1175. Retail buyers of gold/silver coins are highly sensitive to price and tend to chase the price higher, up to a point. On this basis, it’s not surprising that more minted coins were sold a year ago compared to this year. This “price effect” on the demand for retail gold and silver coins likely explains about 25% of the demand comparison between 2016 and now.

The second factor is the economy. Remember, the end user of minted bullion products is largely the retail buyer. In the first two months of 2017, real wages have declined. Even more negative for retail sales of any sort is the fact that real disposable income has been declining on a year over basis since December 2015:

The Rest…HERE

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