Lawrence Williams -Those who precipitated the recent fall in the gold price may have unleashed a beast that will put future efforts at market manipulation way out of their control. Physical metal is now seemingly becoming key in investors’ minds.
They are no longer putting any faith in paper gold and this is being seen in all quarters with reports from virtually all continents of demand exceeding supply of physical metal, and some hefty premiums being applied on sales of gold bullion.
Add to this particularly strong demand from Asia - reports have put the volume of deliveries into the Shanghai exchange so far this year of over 1,000 tonnes as actually exceeding estimated new mine production over the period.
Now whether this is indicative of actual Chinese demand, or perhaps a liquidation of gold held in the Western ETFs and it being moved into what might be deemed as safer depositories elsewhere is uncertain for the moment – although anecdotal evidence does suggest huge demand re-occurring at Chinese and Hong Kong retail outlets.
That other hotbed of gold demand, India, has also seen a huge upturn in demand for physical metal over the last two weeks, while Middle Eastern souks are reportedly raising premiums on bullion to almost unprecedented levels.
In terms of pure physical demand – as Ross Norman notes on
