CENTRAL BANK BAR AND COIN DEMAND GROWS IN Q3

Wayne Lin

11/14/2018 10:56:58 AM

• Gold sees continued challenges.
• Silver down as trade tensions fuel 2019 concerns.
• Demand for bullion by central banks grows in Q3.

Investment by central banks in Gold coins and bars has been on the rise in 2018 and this trend continued during the third quarter. Coin World cited numbers from the World Gold Council that indicate global demand for Gold bullion was at 964.3 metric tons during the period, which is more than 6 tons higher than the same time last year. Much of this is due to many central banks increasing their Gold reserves. Demand from central banks specifically grew 22 percent in Q3 2018 compared to 2017, seeing one of the highest levels of quarterly purchases since 2015, according to the WGC. The jewelry industry also increased purchases of Gold, up 6 percent since last year for the same period.

Gold Held Down as Inflation Data Looms

During early trading Wednesday, Gold prices were mostly held down as market watchers waited for inflation data to be released. MarketWatch pointed out there had been a pause in selling action for Gold for seven of the last eight trading sessions. This lack of movement has overall driven spot prices down. The consumer-price index number expected Wednesday could send bullion in different ways, according to analysts. A sizeable gain for the index has the potential of creating a sell-off of Precious Metals. The article also suggests the popularity of Gold as a safe-haven investment may be growing, as many expect high-risk assets to become more volatile in 2019. Pepperstone Group Head of Research Chris Weston is quoted as saying, “As we look into our crystal ball and gaze into 2019, emerging warning signs can be seen that suggest 2019 could be the year where Gold bulls finally get their day in the sun.”

Gold to Silver Ratio Strengthens

This week, Silver prices have continued to weaken relative to Gold. The Gold to Silver ratio is now getting close to the 86 mark, nearing the highest known levels since the early 1990s. According to a commodities round up from global financial institution ING, worries about the detrimental effects of trade tensions to global economic growth are likely fueling the challenges to Silver pricing. The use of Silver by industrial manufacturing companies is much higher than Gold, which is primarily purchased as a store of wealth.

At 11:54 a.m. (ET), the APMEX Gold and Silver spot prices were:

• Gold, $1,206.00 Up $2.40
• Silver, $14.13 Up $0.05
• Platinum, $834.30 Down $7.00
• Palladium, $1,118.20 Up $18.10

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