If Gold Demand is Up, Why Are Prices Still Down?

Friday, May 18, 2012

If Gold Demand is Up, Why Are Prices Still Down?

Polski: Sztabka złota ważąca 12,5 kg. Własność Narodowego Banku Polskiego. (Photo credit: Wikipedia)

Demand for gold grew 16% over the past 12 months to 1,098 tonnes, according to the World Gold Council’s Q1 2012 Gold Demands Trend Report. Globally speaking, that translates into a tidy sum of $ 59.7 billion in gold.

While 16% growth is impressive, today’s gold prices are still around 18% lower than their 52-week high. Why the discrepancy?

The May 5 trading session was the first in a while that gold has bucked the trend by going up when the S&P 500 (NYSEArca:SPY – News) and Nasdaq-100 (NasdaqGM:QQQ – News) are down. Over the past several months, gold has traded in tandem with volatile assets like stocks (NYSEArca:SCHB – News), industrial metals (NYSEArca:JJM – News), and oil (NYSEArca:OIL – News).

On the demand side, the gold market (NYSEArca:IAU – News) has long relied on India (NYSEArca:INDY – News) for consumer buying, but the threat of bans on imported gold could stop that... Continue to read.

2 comments:

adamsmithMay 19, 2012 at 6:12 AM
very inspirational blog.i love reading your blogs,so glad you've shared this.
very interesting.thanks for sharing,
i really love all the information that stated in this blog.

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profit.bizMay 21, 2012 at 6:25 AM
The demand of gold is increasing day by day. But sometimes downfall occurs in the market for some time only this is the reason that price of gold downfall, but once again the prices of gold has increased,

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