Demand has been very high in Q3 2015 at 1120.9 tonnes. Supply has declined year over year to 1100 tonnes. This created a rise in the gold price in Q3.
Demand will be subdued in Q4 because investors already bought their share in Q3.
Supply decreased due to lower mining production and lower recycling of gold. The majority of increase in supply was due to net producer hedging, which basically means that miners sell their future production to bullion dealers in exchange for cash. Bullion dealers get their cash from central banks who sell their gold into the market. So the bullion dealer actually borrows gold from the central bank and will return it in the future, when the mine produces it.
Of course, mines selling production now or selling production in the future has no net increase in supply eventually. A mine can only sell so much gold as its capacity allows. So basically, supply is drying up if we don’t take into account net producer hedging.
Demand was only 915 tonnes, dropping 12% yoy.
Supply was at 1033 tonnes, down 5% yoy.
This is confirmed by gold hitting a 5 year low recently.
This is the supply and demand trend of gold. We see a steady rise in demand while supply is waning off due to ‘peak gold’. Mines won’t be producing a lot of gold going forward, unless the gold price rises.
https://www.silverinstitute.org/site/2015/05/06/key-components-of-global-silver-demand-rose-in-2014/
While overall industrial demand remained strong, we saw a sharp drop in silver bar and coin demand. This drop was seen in the U.S., China and Europe. We went from a deficit back into surplus, which explains the drop in silver price. Demand fell 5% year over year.
Supply increased as expected on a linear basis. 6% year over year.
Today we are in contango (see chart below from Contango Report): The six month contango = 52.77 – 48.36 = 4.41. This is pretty steep when you look at history.
That means we are very close to a bottom in oil. Every investor is asking himself, when will the oil price bottom out? According to me, there are 3 things to consider when it comes to oil.
To read the analysis, go here.
First of all, the massive 2000 tonne/annum demand from China that started in 2008 and blew off in 2013 doesn’t seem to be incorporated in this chart.
Second, we see that supply has peaked in 2012 and I see this supply going down in 2015. Demand has started to pick up since September 2013.
Third, we see a massive spike in gold demand in 2008 when the crisis started, will we see this again in 2015?
Correlation Economics (Backup) 