• 484 days Will The ECB Continue To Hike Rates?
  • 485 days Forbes: Aramco Remains Largest Company In The Middle East
  • 486 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 886 days Could Crypto Overtake Traditional Investment?
  • 891 days Americans Still Quitting Jobs At Record Pace
  • 893 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 896 days Is The Dollar Too Strong?
  • 896 days Big Tech Disappoints Investors on Earnings Calls
  • 897 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 899 days China Is Quietly Trying To Distance Itself From Russia
  • 899 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 903 days Crypto Investors Won Big In 2021
  • 903 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 904 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 906 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 907 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 910 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 911 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 911 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 913 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

LBMA 2011: Two Charts and An Opportunity

Plenty of reasons to be cautious were flagged up in today's "Bubble or Not?" debate...

Lots more to share from the second and last day of this year's LBMA Annual Conference here in Montreal. But the red-eye for London won't wait, not with Air Canada cabin staff starting a strike at midnight.

So two quick charts, both highlighted by Edel Tully, precious metals strategist at UBS, in her conference summary. First, she said she's adding this chart - hoisted from this morning's opening presentation by Albert Cheng of the World Gold Council in the China & India session - to her slide deck:

China Gold Demand and Supply

It shows the yawning supply-demand gap inside China's domestic gold market. Now the world No.1 for gold mining output four years running, China cannot satisfy its own private household demand.

Bigger picture, the chart makes a neat pairing with this slide, used by Franco-Nevada chairman Pierre Lassonde in Monday's keynote speech - and already a key fixture in any analyst or strategist's PowerPoint slides, according to Tully:

Global Assets under managment

Plenty of reasons to be cautious on gold were flagged by this afternoon's "Bubble or not?" debate. In particular, the risk of a parabolic rise - similar to how silver shot higher this spring - could see "safe haven" buyers scared off by volatility. (Silver investment flows have certainly turned "hesitant" since then, noted GFMS's Philip Newman.) Or maybe existing investors will soon begin tiring of year-on-year gains in gold, and start rotating into other asset classes instead of waiting for what they might forecast as a "top". Or maybe a blow-up in China - sparked by its own domestic credit and real estate markets, if not central-bank action to try and cool them, along with inflation - could see its tug on the world's gold supplies pushed the other way, as the feel-good affinity for gold is reversed by economic slowdown or even recession.

But for now, as one panellist put it in the Oxford-style debate - and with gold investment accounting for just 1% of the world's financial assets today - "This looks less like a bubble than an opportunity."

 

Back to homepage

Leave a comment

Leave a comment