CNBC has come out with an article about why it is unlikely for gold to fall further in price. There are three principle reasons for this bullish outlook, according to the author:
- Slowdown in exchange-traded fund (ETF) liquidation
- Gold rush in China and India from strong retail demand
- Increased buying by central banks
I would add to this list the fact that U.S. Mint sales of gold coins are the highest they have been in three years amid the recent decline in gold’s price. Silver coin sales are also rising.
Of course there are naysayers such as Business Insider with this hysterical piece of uninformed nonsense.
But the public is not buying into the mainstream financial media’s fear mongering propaganda about gold not being a safe haven. They recognize the opportunity that the price correction has given them.
From Bloomberg we have this:
“People are flocking to buy physical gold,” Todd Dutkevitch, a senior account executive at Los Angeles-based American Bullion Inc., said in a phone interview. “The price drop has made it possible for many retail buyers to add gold.”
As well as this:
“Perth Mint, which refines almost all of the nation’s bullion, said that demand jumped to the highest in five years after prices plunged, with the factory kept open through the weekend to meet orders.”
This kind of demand for gold will not allow a true bear market to take hold. Every bullish factor one could imagine for gold is in place.