Lawrence Williams: Gold and silver—will they get worse before they get better?

It’s easy to say 'don’t panic' but gold’s fundamentals still look good. By well-researched data, Chinese demand is soaring again – the latest Shanghai Gold Exchange figures have had weekly gold withdrawals from the exchange running at the 50-60 tonne levels for almost a month now, which equates closely to global new mined gold supply on its own. Indian demand has been picking up so much that it has the government concerned again. In total it is difficult to see from where all this gold is coming.
Jeff Nichols sums up the situation pretty succinctly in his intro paragraph to his latest offering: "Autumn has been a cruel season for gold investors. In contrast to some anticipated seasonal bump up, the yellow metal’s price has been driven lower by bearish technical indicators and excessive negative sentiment among a small number of large-scale institutional speculators – bullion banks, hedge funds, program traders and the like – trading mostly in futures and over-the-counter “paper” markets for very short-term gains, while remaining indifferent to the metal’s long-term bullish fundamentals."

This post was published at Mineweb