Gold extended losses Thursday after FOMC meeting minutes revealed the Fed would remain “patient” in regard to interest rate decisions. “Patient” is the new buzzword for, our reckless monetary actions continue to destroy the U.S. economy and we have lost all control. Gold last reported a.m. is $1263.80 down $23.60 and silver is $17.22 down 88 cents.
For the past three years we have been advising clients to hold a larger percentage of silver versus gold in their precious metals portfolio. Silver’s industrial demand is the driving factor behind the metals success over the past many years. Silver remains in short supply and there is no end to demand in sight.
The U.S. Mint reports that 5.13 million ounces of Silver American Eagles have been sold in January this year outperforming January 2014 sales of 4.78 million. Silver futures jumped by an average of 18 percent this month as the European Central Bank announced the decision to “print” its way to a better economy. It didn’t work in the U.S. but who knows, maybe Europe will be different just because its Europe. Maybe math in the U.S. works differently in the EU.
India became the world’s largest consumer of gold in 2014 dethroning China. China’s gold consumption remains high but demand fell by more than a third last year to a four year low of 866 tonnes. The drop in gold purchases led to a nineteen percent fall in global physical demand. The only sector that did not see a decrease in gold purchases for 2014 was of course central banks. It’s well documented that central bank gold purchases are off the charts.
India is known for its veracious appetite concerning gold and even with restrictions in 2014, the year was no exception. Indian demand for gold jewelry rose fourteen percent last year to a record 690 tonnes. The BRICS countries, Brazil, Russia, India, China and South Africa are positioning themselves to become the world’s new economic powerhouse and gold is their path to getting there. The BRICS countries equate to one third of the world’s GDP and are purchasing more than half of the world’s available gold supply.
We don’t look for gold or silver to have a breakout year as many other commentaries suggest. Unless we see large scale economic and political upheaval, the bullion bankers will have success shorting futures markets suppressing gold prices as they have done since April 2011. Considering current global events in financial and political sectors it’s imperative that we insure at least a portion of our wealth. There’s nothing magical about precious metals, it’s just real insurance against possible losses we may incur from paper markets.
The 1 oz. Silver Canadian Maple remains available below production costs. The Maple is offered at .9999 purity making it one of the most sought after silver “legal tender” coins available.
Call us with any of your questions concerning precious metals including semi-numismatics and proof coins. 1-800-577-3195.
Gold Goliath is not your typical gold dealer.