Como se combate o populismo? "Com eleições", responde Fukuyama

[raulribeiro]

Tomorrow is a benchmark day for gold as traders have been counting on a crisis in Iran to maintain the fear premium (approximately $100) that has been slowly working its way out of the commodity since it peaked at $730 on May 12th.

This fear premium, skillfully maintained by oil traders as they pump their little commodity for all its worth, has been undeservedly bestowed upon gold, even though there is no threat to the gold supply.
The fact of the matter is there is simply too much gold coming out of the ground and if speculators stop snapping it up, we will move quickly into a glut.

World Gold Council reports show that supply hit 1,045 tons in Q4, 15% more than in Q3, while demand decreased from 891 to 850 tons. Much like the USO ETF (USO), had it not been for the StreetTracks Gold (GLD) and similar funds, which took possession of over 158 tons of gold in Q4 alone, close to 300 tons of unwanted gold would be finding its way onto the spot market.

Jewelry demand is down to 590 tons, the lowest since 2003 when gold was fetching just $350. Jewelry accounts for 71% of total global demand for gold! This is why strong GDP data trumped falling interest rates to give gold a small boost today — there are not enough speculators to support a lack of consumer interest.

As we expected, according to the AEMQ report, central banks liquidated 662 tons of gold in 2005, taking advantage of inflated prices to rebalance their holdings.