When looking at gold, investors need to stop focusing so much on demand and look at the over-looked supply side of the market, according to Erik Norland, senior economist for CME Group.
With many investors wondering why gold is not rallying on news coming out of Greece and China, Norland said the key lies in mine supply.
In his recent paper, the Push-Pull Dynamic in Gold and Silver, Norland highlighted that both metals’ mine supply has been growing steadily since 2009. “As this mining supply increases it tends to put downward pressure on gold and silver,” Norland said in an interview with Kitco News.
In a Q1 trends report by the World Gold Council, the organization found that mine production grew by 2% year-on-year to 729.2t, but is expecting supply to tail off in the second half of 2015.
To read more:
http://www.kitco.com/news/2015-07-10/When-it-Comes-to-Gold-It-s-Not-Just-Demand-Equation-CME-Group.html
