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  Jim Kingsland

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  2/16/12
  More and more often I like to say it pictures…

  

  Enough said.

  Thursday Gold Market analysis: The dollar scoots a little higher; gold scoots a bit lower. The more doubtful the European picture, the more buying interest the dollar receives (for now).

  Brief News commentary: Enjoy the positive headlines while they flow. Numbers that look good now are benefiting from a milder that normal winter which are throwing seasonal adjustments out of whack. We’ll have to wait for springtime data for the real story on what economic indicators are telling us. Watch for the contradictions as well. It’s all well and good that housing starts are doing better, but at the same time today there are headlines about a big jump in home foreclosures. The real estate story, just as one example, is still telling a story of huge shadow inventory that will continue to hurt residential real estate.

  Rekated: CNBC – Foreclosures on the Rise Again: http://soc.li/aPFMbjC

  Likewise, there are predictions of coming oil price spikes later in the year. What would that do to the economy? The tea leaves are indeed pointing the way to $5 gasoline.

  Simply stated, there are signs of recovery in the economy, but it is still a bit too early to take the patient out of ICU. In the case of the economy, if better times were straight ahead, the FED would abandon in near Zero Interest Rate Policy, but instead, the latest FED minutes show those goofy guys are still toying with buying even more bonds to keep rates low. I won’t be surprised if we soon go into NIRP mode later in the year – Negative Interest Rate Policy. I recognize some of the positive numbers, but one must still watch the action of the FED for the real clues about the state of the economy – especially in an election year.

  The latest Gold Demand report from the World Gold Council is now available. It is a must read…
  Global demand for gold in 2011 rose to 4,067.1 tonnes (t) worth an estimated US$205.5 billion – the first time that global demand has exceeded US$200 billion and the highest tonnage level since 1997.

  The main driver for this increase was the investment sector where annual demand was 1,640.7t up 5% on the previous record set in 2010 and with a value of US$82.9 billion.

  The pre-eminent markets for investment demand in 2011 were India, China and Europe. Central banks continued the trend established in 2010 of being net buyers of gold.
  Marcus Grubb, Managing Director, Investment remarked “What we can see from these 2011 figures is that there were two main factors driving the results: Asian growth and optimism on the one hand and western desire to protect assets against uncertainty on the other. Looking particularly at Asia, there was a major boost to the overall figures from the increase in Chinese demand, which is a trend that we see continuing over the next year. It is likely that China will emerge as the largest gold market in the world for the first time in 2012 demand terms. What is certain is that the long-term fundamentals for gold remain strong, with a diverse and growing demand base, coupled with constrained supply side activity.”

  Read more here: http://www.gold.org/download/pub_archive/pdf/GDT_Q4_2011.pdf

  Related: China to Surpass India as Biggest Gold Market This Year, Council Predicts http://bloom.bg/x9sjwH via @BloombergNews

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