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.
Although the price action in gold can be frustrating at times and cause dips in quarterly demand, the bull market is still intact as demand continues to increase with the growing need to protect capital with non-printable assets.
First-quarter global gold demand totaled 1,097.6 tonnes ($59.7 billion), which represents a 5% decrease from 1,150.7 tonnes ($51.3 billion) in the same period last year. Although the demand in tonnes decreased, the average price for an ounce of gold was 22% higher.
Gold climbed during volatile trading in Asia having recovered from the NY close yesterday. In European trading the yellow metal is hovering near the $1,548/oz level. Technically, gold’s trend remains down but gold looks increasingly oversold.
On-going and spreading societal unrest in North Africa and the Middle East offered support to gold prices on Thursday, as did a weaker US dollar overnight. The greenback however recovered a bit following the release of CPI and jobless claims data.