Have gold and silver really bottomed this time?
Precious metals bulls have been calling a gold and silver price bottom throughout the recent years of price declines. Will they be correct this time around?
At the recent Mines & Money conference and exhibition In London there was a perhaps surprisingly upbeat feel given the poor performance of metals prices over the preceding 2-3 years. While this optimistic mood seemed to apply to precious and base metals producers alike, as is the norm nowadays it was the gold companies which were looking for the biggest upside. Perhaps this was because those that can nowadays afford to participate in an event like this – it is expensive to exhibit and to attend – are those who are going to survive in the current price environment come what may. But perhaps even more prevalent was the perceived view that things were at last truly bumping along the bottom and that the only way forward was up.
There are a lot of factors supporting this latter viewpoint, but it’s probably just as well for the bulls out there not to get too carried away as many of these bullish factors have been around before and still prices have continued to be driven down. But this time perhaps the optimists do have a point.
On gold and silver demand, this appears to be riding high. Chinese Q4 demand as represented by Shanghai Gold Exchange withdrawals has been just as strong as it was in the 2013 record year. True demand had slipped pretty badly in Q2 and Q3 compared with a year earlier, but it has staged a huge pick up since the end of September. But perhaps even more significant has been India’s return to the gold buying spree with November gold imports officially put at 150 tonnes, although some assessments had even suggested it might have been as high as 200 tonnes….
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