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Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Gold Market News

Retail Gold Coin Demand Surges in Q1 2020

April 30 2020 - (Gold Market Wire) - As readers of this site know, only a very limited amount of stock is given here to the supply and demand fundamentals of Gold. That is because, firstly, so much of the world's mined gold is (still) above ground and accessible. Replenishment of stocks isn't a big factor in the Gold price because Gold is the world's ultimate storage vehicle for wealth. 500 years at the bottom of an ocean and you can pull it from the sea, and its good to go. But the demand side of Gold can be an interesting factor if it comes in the right form - namely, retail public demand.

The behaviour of the retail market is where the true fuel for Gold fever is spawned. Not on the trading desks of Zurich, London and New York. The retail "scramble" is what makes the Gold price soar, and there are solid signs now, that this scramble may be starting in earnest. Firstly we have record inflows into ETFs, some of which may be speculative and some of which, of course, reflect real public investment demand. There are now over 3,000 tons of gold demand stored in the ETF world. (Heaven help them - and the price of Gold - if the claims for physical redemption are demanded and custodian chains are revealed to be hollow.) It's a significant number as its up 10% in the past quarter, to record levels. But one must also remember that ETF holders, are also ready to dump and run with the click of a mouse, i.e., they aren't always the strongest holders of Gold.

But Gold coin buyers are. They are the true barometer of the move into Gold that arrives as a result of underlying lack of confidence in government and banks. And that is where the big change in demand came in this quarter. Gold coin demand is up 36% in Q1 2020. And that is the average man in the street, with some savings, going out and buying a handful of coins. This is the broadest spectrum of the Gold investment world, and is where the mania is truly reflected. When we reach this stage, we are starting to see the true erosion of public confidence which can propel Gold significantly higher.

When the temporary government measures end, and the unemployment checks stop arriving or become nearly impossible to procure; as the teetering pension systems of the West begin to falter and the public realises they've been had by a bunch of promises that were delivered in campaign promises by cheap salesmen and women posing as politicians, all bets will be off on the price of Gold. Q1 2020 has revealed a true watershed moment, the public is beginning its charge into Gold, much as it did in previous generations.

As the legendary Richard Russell said, back in the 1970s, "there is no fever like Gold fever."

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