Since the middle of April we have all heard the gold bear cry of ‘it’s over, gold is done with…the bubble has burst.’ But not many of these so-called expert commentators have really looked into the strength of demand in the East.
Jeff Nichols wrote in a note to investors recently that he believed gold bears ‘have a fairly provincial view and limited understanding of gold’s increasingly bullish long-term fundamentals.’ He went onto define ‘provincial:’ ‘They are ignoring more than half the world.’
I couldn’t agree more.
Total physical gold demand for that half of the world in Q1 this year was more than 740 tonnes.
Comparing these official figures, to those in the West it seems odd that analysts believe the hunger for gold is quickly disappearing.
That’s just investment demand. Central banks in the ‘ignored’ part of the world shopped up a storm as well, purchasing 109.2 tonnes in Q1, for the seventh consecutive quarter central bank purchases were over 100 tonnes.