WGC: Price Decline Spurs Widespread Physical Buyin World Gold Council: Price Decline Spurs Widespread Physical Gold Buying
By Kitco News
Thursday April 18, 2013 2:22 PM
(Kitco News) - The World Gold Council said Thursday that a “massive wave” of physical buying is occurring around the world at lower prices following the huge decline in gold at the end of last week and beginning of this week.
The Gold Council is a market-development organization for the gold industry. The WGC released the following statement from CEO Aram Shishmanian:
“It has become increasingly clear over the course of the past week that the fall in the gold price was triggered by speculative traders operating in the futures markets. Their short-term view of generating a trading profit is in stark contrast to the views of long-term investors in gold, as evidenced by the massive wave of physical gold buying that began over the weekend and accelerated following Monday’s further decline. The surge in gold purchases is spanning markets from India and China to the U.S., Japan and Europe. Buyers are viewing this as an opportunity to purchase gold at prices not seen in the past couple of years.
“The World Gold Council is uniquely positioned in the gold market to get immediate feedback on market patterns. We are already seeing shortages for bars and coins in Dubai, while premiums in Mumbai are at $26/oz and $6 in Shanghai, indicating that buyers are willing to pay more than current spot prices for the metal.
“Clearly the desire to own gold, as an investment and for adornment, has made itself felt in the physical market. Gold operates on the basic economic fundamentals of demand and supply. Our view is that demand is strong while supply remains constrained, and that this dynamic ultimately drives the long-term price of the metal.”
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