Gold price falls fuel ‘record’ bullion sales. BullionByPost (an internet retailer in the UK) said its sales hit $132,796,800 in the year to April, presenting a rise of 58 percent on the previous year. Pre-tax profits are expected to be in the region of $3,052,800, up from $2,289,600 a year earlier.
Management forecasts turnover of more than $183,168,000 for the company’s next financial year. The prediction came despite a continued slide in the gold price in recent months, culminating in the “safe haven” metal dropping to a low under $1,200 an ounce last Friday.
The price has been hit by a widespread sell-off among institutional investors, who have increasingly turned to the yields offered by equities. The Federal Reserve’s recent timetabling of how it will unwind its vast quantitative easing (QE) program – which had increased the appeal of gold as an inflation hedge – has also hurt demand.
However, Rob Halliday-Stein, the founder of BullionByPost, said the plunge in the price had increased enthusiasm for gold among his customers, describing last Friday as a “record” day with over $1,526,400 in sales.
“For every seller, there’s a buyer,” he said. “The sellers tend to be big and fast and the buyers smaller and slower. The reason they are buying has not changed – it is because they are worried about the medium to long term outlook for the economy, and QE.”
All Things Considered – John’s Commentary:
The gold price has been hit by a widespread sell-off among institutional investors, not the physical investors.
Meanwhile, last week Andrew Maguire reported that 580 tons of physical gold was purchased by eastern central banks in just seven days. That is 25% of the annual gold mine production.
High net worth individuals are selling paper gold and buying physical. This is being witnessed by our bullion firm and others across the globe.
Remember that paper metals and physical metals are diametrically opposed. When the prices decline, paper investors sell and physical investors buy.
