Buyers Remain Despite Severe Pessimism Towards Gold Prices
It can’t be stressed enough; gold prices could be presenting the opportunity of a lifetime. Those who are ignoring the precious metal could be missing out on immense gains.
Forget everything you are told in the media about gold.
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You see, we continue to see major buyers in the gold market, and they are stepping up their purchases.
India Imports Massive Amount of Gold
Look at India, for instance. It’s one of the biggest consumers of gold.
If you recall, not too long ago, the Indian government tried something very obscure; it literally made the most-used currency notes obsolete. Thanks to this, Indian consumers suddenly found themselves holding onto notes that were not worth anything.
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It comes as no surprise that this caused a massive decline in gold consumption in the country as well. Would anyone be buying gold when they can’t use the money they have on hand? Very unlikely.
After this, there was a widespread belief that gold prices would drop because India’s demand would continue to be suppressed.
Wrong.
Look at the trade statistics. India is back at it, and it looks like it doesn’t matter where gold prices stand.
Consider that in May, $4.95 billion’s worth of gold was imported into the country. In the same period a year ago, this amount was just $1.47 billion. Simple math: This represents an increase of close to 237% year-over-year. (Source: “Quick Estimates For Selected Major Commodities For May 2017,” India Ministry of Commerce and Industry, last accessed June 29, 2017.)
If we assume the average price of gold for the month of May was around $1,250 an ounce, then India imported 3.96 million ounces of gold in the month. This amounts to roughly 112.26 tonnes. Considering that global mine output is around 3,100 tonnes, India imported 3.6% of global mine supply in just one month!
China’s Imports from Hong Kong: Most Gold Since 2017
But don’t get too fixated on India. Pay attention to China as well.
Although China’s gold consumption isn’t as transparent, there are certain areas investors could focus on to see how it looks. Usually, those who follow gold markets pay close attention to gold exports to mainland China from Hong Kong. It gives us a slight idea.
With that said, in 2017, gold exports from Hong Kong to mainland China are expected to amount 1,000 tonnes. If this is actually the final figure for the year, it would be the biggest since 2013! (Source: “China’s Gold Imports Seen Jumping 50% as Haven Demand Booms,” Bloomberg, June 6, 2017.)
Keep in mind, China is also one of the biggest gold-producing countries, and its gold production is consumed in the country as well.
Gold Prices Outlook: Surging Demand Could Mean Big Gains
If you look at gold prices and start to listen to the mainstream, it will have you convinced that gold isn’t even worth a look, let alone an investment.
Dear reader, it must be understood that the buyers remain, and the supply side could be in trouble due to low gold prices.
I will be bold here and say this; there’s a perfect storm brewing in the gold market for skyrocketing gold prices. Ignoring it could be a big mistake.
Ignoring gold mining shares could be an even bigger mistake. They are selling for pennies on the dollar and as gold prices go higher, they could see a super spike.
