BullionVault Weekly Update
Another gold-price record to start Platinum Week...
Monday, 15 May 2023
In the markets today...
For up-to-the-minute live spot gold and silver prices use the BullionVault chart
Gold $2000 vs. Platinum Week
from Adrian Ash
Director of Research, BullionVault
PLATINUM WEEK kicks off today in London.
Or rather, it began last Thursday for that select group of analysts invited to SFA's pre-match events over the weekend...
...and who, therefore, sadly couldn't make BullionVault's private friends and family tour of the British Museum's wonderful exhibition Luxury and power: Persia to Greece.
(If you're in London this spring, I can't recommend it enough. Nor could most reviews so far. You could even win a pair of tickets here, joining our latest winners Stuart from Clacton, Ian from Cambridge and Anthony from London in seeing this blockbuster show for free.)
For this year's Platinum Week, our friends at the World Platinum Investment Council were first out of the traps this morning with their new data and forecasts...
...predicting a much deeper deficit of supply versus demand than they had previously advised thanks to rising investment demand and a new record for industrial use.
WPIC will be followed later today by refining and technology specialists Johnson Matthey, plus the launch party for independent analysts Metals Focus' own report this afternoon.
You'll find all the top-line news, numbers and predictions crunched and shared on GoldNews later this week, as soon as we can find time to read the deluge of data in between running to the seminars and events which the platinum-group metals enjoy every May in London.
Because so many people gather together for Platinum Week, it has been hijacked somewhat by the wider precious-metals industry.
And the big question everyone's asking right now...besides how silver can dump $2 in one week when everyone thinks 2023 will see a big deficit of supply vs. demand...is whether gold can hold and push above $2000 at the 4th time of asking.
As we note in the latest edition of the London Bullion Market Association's Alchemist magazine, it doesn't always take a crisis to push gold prices higher.
But it sure does help.
Breaching $2000 per ounce has so far needed a global pandemic, Europe's most awful war since WW2, and a crash in the US banking sector that's already hit more deposits by value than the financial crisis did 15 years ago.
Now throw in a global real estate slump, inflation which just won't quit, sabre-rattling over Taiwan, plus Washington's latest debt ceiling stand-off, and could it be fourth time lucky for gold to push and hold above that $2000 mark?
Even as US borrowing costs rose by four whole percentage points last year, gold across 2022 set a new annual record, averaging $1800 per ounce. The Powell Fed has kept raising rates in 2023, yet gold this March set a new quarter-end and month-end record at $1979. Gold then set a fresh month-average record in April, topping $2000 for the first time ever across the month’s LBMA benchmark auctions...
...and it's now set yet another record to kick off Platinum Week, extending its 7-session run of trading above the $2000 level at both the AM and PM benchmark auction in London, suggesting solid physical-market appetite at that level and higher.
So far, so hot, but so what? Gold is failing to make front-page headlines, a stark difference from its financial-crisis peak of summer 2011. Weirder still, it's lacking a mania among the usual suspects too.
Yes, speculative betting in Comex gold futures and options has risen...
...but the net long position among money managers remains 1/3rd below the frenzied levels of late-2019 or the pre-Covid peak of February 2020 by value, even though gold prices are now $350 per ounce higher.
Coin and small-bar offtake has also risen from its doldrums of 2019 and 2020, but it's running far below the 2011 peak, never mind the bonanza of the 2013 price crash. And gold-backed ETFs are meantime tiptoeing towards a third year of contraction, shrinking in both 2021 and 2022 and seeing another small outflow in 2023 to date (albeit led by European profit-taking as US funds finally start to expand amid the banking scare and debt-ceiling crisis).
So, with the real, retail and hot money out of the frame...
...and with global jewellery demand starting to struggle at prices jumping 25% in six months...
...who does that leave as today's unusual suspects?
Led by the emerging-market gold-buying giants of China and Turkey, many of today's buyers are sovereign states suffering or fearing US-EU sanctions according to analysis in this paper for the IMF by economic historian Barry Eichengreen among others earlier this year. This demand is also showing in the London vault holdings data updated each month by the LBMA and the Bank of England.
Or rather, it's showing by its absence.
Key data and market events since our last Update and for the week ahead:
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