Welcome to Illuminati Silver – we tell you the truth about silver.
Today is Tuesday 4th August 2015 and we are producing this video to attempt to answer
the question, why are gold prices falling further?
In summary, Gold is down because recent events have led to a reduction in risk aversion.
The Greek crisis has been resolved, at least for now and Iran has signed the nuclear deal
with the US.
Fears of an interest rate rise by the US Fed have buoyed the dollar thereby dampening the
precious metal market price.
Gold is the least preferred asset class right now and sentiment is at a low ebb.
The total gold holdings in SPDR Gold Trust, the largest gold ETF in the world, has come
down from 1,291 tonnes in 2012 to just 690 tonnes today, a fall of 47%, reflecting this
decline.
China, the largest consumer of gold, has witnessed large scale selling and
the fall in user demand from China because of their current economic condition has also
influenced price.
In addition, Global consultancy Thomson Reuters GFMS says "seasonal strength between April
and June saw India reclaim the top spot in regard to total gold consumption for the second
quarter of 2015.
India was "easily the biggest consumer of all gold products in the second quarter,"
the report says, and please listen to this carefully, despite seeing no sizeable change
in either jewellery or gold investment demand from a year earlier.
China's household demand fell 24% in contrast, with the drop split across jewellery and investment.
Frank Holmes CEO of US Global Investors and a regular contributor to Kitco News summarises
the position like this, and we quote:
“Besides apparent price manipulation, other factors are affecting gold's behaviour right
now, three in particular:
1.
The strong US Dollar 2.
Interest rates on the rise 3.
Slowing Manufacturing Activity
He adds: “China is the 800-pound commodity gorilla, and its own PMI has remained below
the important 50 threshold for the last three months, indicating contraction.
He said on Kitco yesterday: “that the metal was acting more like a raw commodity than
a safe-haven asset…. the key outside markets are also in a bearish posture for gold and
silver, as the U.S. dollar index is higher and crude oil prices are lower.
Incidentally, Copper and aluminium prices also fell to six-year lows.
There is concern of massive deflation after the downbeat economic news coming out of China,”.
As we are entering the Monsoon period in India, the Holiday period in the UK and the west,
and historically a ‘low demand’ period for the precious metals over the next 2 or
3 months, we can only, at this time, envisage even lower prices.
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Disclaimer: Silver Illuminati owners come from a background
of Banking, International Wealth Management and Economics.
Having now retired from these worlds we are not qualified to give investment advice.
Therefore, this and other productions must not be deemed to be giving such advice and
merely represent the personal views of its owners.