Gold Trends for the Second Half of 2011
By: The World Gold Council The recent World Gold Council report identifies the gold trends for the second half of 2011. Gold’s strong start to the year was reinforced during the second quarter of 2011 where total global gold demand measured 919.8 tonnes, worth a near-record US$44.5 Billion. There was broad-based support across all sectors and geographies. Standout markets were India and China, as these two markets accounted for 52% of total bar and coin investment and 55% of global jewelry demand.
According to the Gold Demand Trends report for Q2 2011, gold demand in the second half of 2011 will remain strong owing to a number of key factors:
- Despite a higher gold price, Indian and Chinese demand grew 38% and 25% respectively during Q2 2011 compared to the same period of 2010. This growth is likely to continue, due to increasing levels of economic prosperity, high levels of inflation and forthcoming key gold purchasing festivals.
- The impact of the European sovereign debt crisis, the downgrading of US debt, inflationary pressures and the still-fragile outlook for economic growth in the West are all likely to drive high levels of investment demand for the foreseeable future.
- Central banks are likely to remain net purchasers of gold. Purchases of 69.4t during Q2 2011 demonstrated that central banks are continuing to turn to gold to diversify their reserves.
The World Gold Council’s Gold Demand Trends (GDT) is the leading industry resource for data and opinion on world-wide gold demand. This quarterly publication examines demand trends by sector and geography.
All Things Considered – John’s Commentary
We tend to focus on the United States and our domestic woes. In fact, the financial situation in Europe is much, much worse than our own. European banks are in extremely bad shape. Greece will default – opening the potential flood gates for other countries to follow suit.
Action to take now: I sincerely hope you are not waiting for a gold pullback. If you are, you have probably been waiting a long time, watching prices march higher. Do not procrastinate any longer. By the end of the year we may well be in the $2,000 range. If we see a pullback, consider it a short term ‘sale’ and act quickly.
Quote of the day: “The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.” – Earnest Hemingway, writer, journalist (1899-1961)
