The WGC’s Marcus Grubb has emphasised in a New York interview that gold demand, particularly in Asia, and likely reductions in supply, will have more than balanced the big sales out of the gold ETFs
Author: Lawrence Williams
Posted: Friday , 19 Jul 2013
LONDON (MINEWEB) -
Following on to a rather bearish view on the gold supply/demand picture by French bank Natixis earlier this week, and reported onMineweb (see Gold supply surplus could send prices plummeting--Natixis ), the World Gold Council’s Managing Director of Investment, Marcus Grubb, has presented a rather different viewpoint in an interesting video interview with The Street, in New York. Here he points out that the big outflows from global gold ETFs so far this year, which he reckoned to have been some 600 tonnes, have been more than countered in the first half of the year by enormous demand for physical gold, particularly from China and India (despite the latter’s clampdown on gold imports).
To be sure the gold ETF outflow has had a significant price impact on the yellow metal – indeed this has always been a fear within the gold market ever since the gold ETFs were introduced, and built up so rapidly. They provide a quick way of trading in and out of gold bullion without the holders actually having to store the metal themselves. Inasmuch as the ETF inflows were very significant in the rise in the gold price up until 2011, this year the outflows will have been a major contributor to the downturn.
But, as Grubb says in his interview – and the World Gold Council conducts probably the world’s most detailed and sophisticated analysis of ongoing gold supply and demand through Thomson Reuters GFMS – ...