Wednesday June 01, 2022
For the year, bullion demand is up a massive 617%.
U.S. gold bullion sales are up more than 400% from the five-year average
between 2015 and 2019.
"Gold will always be a long-term store of value."
While gold prices appear to be trapped in neutral below $1,850 an ounce,
physical demand for the precious metal appears to tell a different story,
one of growing investor anxiety, according to some market analysts.
In its monthly sales data, the U.S. Mint sold 147,000 ounces of gold
in various denominations of its American Eagle Gold bullion coins, the best
May performance since 2010. Compared to April, sales are up 67%. For the
year, bullion demand is up a massive 617%.
Even taking COVID-19-related production issues out of the equation, U.S.
gold bullion sales are up more than 400% from the five-year average between
2015 and 2019.
Phillip Streible, Chief Market Strategist at Blue Line Futures, said there
is a false equivalence between gold future prices and sentiment in the
marketplace.
"Bullion sales better reflects the anxiety investors are feeling right
now. When you hear economists talk about a recession, it starts to make
sense why bullion sales are so strong," he said. "Gold will
always be a long-term store of value."
"Gold futures are capped by rising interest rate, but people having
been going out to buy the physical metal to have some 'real money stashed
away," he said.
Pavilonis added that he is ultimately bullish on gold as there is solid
demand for the precious metal. He said that he sees gold as undervalued
given where inflation is and how persistent it will be through 2022.
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