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GLD Adds 1 Week of World Gold Mine Output to Supply Since Trump's Win, Price Steadies on Thanksgiving

Thursday, November 24, 2016 7:43
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Adrian Ash is head of research at BullionVault, the world-leading gold trading & ownership service online…

GOLD PRICES steadied from yesterday’s plunge through $1200 per ounce on Thanksgiving Thursday in London, as quiet trading on the US holiday also saw stocks, bonds, commodities and currencies little changed.
Bullion held to back the value of shares in the SPDR Gold Trust (NYSEArca:GLD) shrank another 13 tonnes Wednesday as gold fell back to its 2013 crash low and investors quit the exchange-traded fund, taking its total holdings to a new 5-month low at 892 tonnes.
The GLD has now shrunk every day since Donald Trump’s US election win a fortnight ago, the longest stretch at 10 sessions running since May 2013.
Net outflows from the GLD – the largest gold ETF – have added 1 weeks’ global gold mining output to supply since November 8.
Chart of GLD gold backing vs spot price. Source: BullionVault via LBMA, ExchangeTradedGold
“Gold prices have dropped below $1200 on the Trump reflation trade,” says a new analysis from Dutch bank ABN Amro’s Georgette Boele, referring to the jump in US bond yields and equity prices.
“We expect the current negative environment to remain in place for gold prices in 2017.
“Investor demand remains the most crucial driver pushing gold prices lower. From an investor point of view there is [now] little reason to hold gold as an investment.”
With gold prices bottoming in December 2015 at $1045 per ounce, ABN’s strategist last year forecast a further drop in gold prices to $900 per ounce by end-2016, writing this January that gold was “no longer a safe haven“.
Gold then began a 30% price rise to July’s post-Brexit peak at $1375, by when Boele had raised ABN’s end-2016 forecast to $1350, predicting in July that “a Trump victory would be bullish for gold prices.”
“I don’t believe it,” meantime says specialist consultancy Metal Focus’ Phil Newman about rumors that the government of India – the world’s No.2 consumer market – may ban gold imports.
[The rumors] seem to have been started by [India's] market participants,” he told Kitco News. “Why were they started? We don’t know.”
“Panicked gold traders and jewellers,” The Times of India reported one week ago, “have circulated messages amongst themselves saying the government could ban import of gold for domestic use from early next year.”
The rumors – widely reported since last week by global news-wires – followed the Modi administration’s shock demonetisation of India’s largest banknotes, forcing a cash crunch that has halted business across the nation as people queue outside its banks to transfer their 500 and 1000 Rupee notes for legal tender.
“What is real is that there has been tremendous uncertainty in the gold and silver market in India,” Kitco quotes Newman at Metals Focus.
Amid the global price drop, investors in Western gold markets “are looking for the white knight of the physical [Asian consumer] market,” Newman adds, “and it is hard to see where it is going to come from.”
Silver prices again outpaced gold on Thursday, holding firmer with a 1.3% loss against the Dollar for this week so far at $16.36 per ounce at lunchtime in London.
The iShares Silver Trust (NYSEArca:SLV) – the world’s largest silver ETF – has shrunk by almost 1% since Monday, liquidating nearly 100 tonnes of bullion by end-Wednesday.
That’s equal to more than 1 day’s global silver mine output.

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault – winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the mining-sector’s World Gold Council research body – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2010

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


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  • coveredlikeatent

    Amazing how much that paper weighs funny how it is implied that it was actual physical silver was sold LMAO! Nobody is selling physical it is the the pieces of shit that have been holding down these prices with frigging paper. If you have paper go and try to get physical metal for it and GOOD LUCK!

    They will be dumping this paper until and probably after Jan 20 because what they have been doing is fraudulent and there is a new sheriff in town. Better cover that ass there boys.

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