World Gold Council statistics contribute little to an understanding of gold market investment prospects because they do not measure gold turnover

John Robertson

PortfolioDirect

World Gold Council statistics contribute little to an understanding of gold market investment prospects because they do not measure gold turnover. The WGC reported last week that gold demand fell to 3,756.1 tonnes in 2013 from 4,414.8 tonnes in 2012. The WGC numbers only measure demand when it causes a net shift in how existing supplies of gold are held. Purchases of existing gold jewellery, for example, would not be recorded as demand. If current holders of gold were not prepared to sell, the WGC would conclude that gold demand was low, no matter how much gold prices rose. Conversely, if large numbers of current holders began selling or mine supplies rose rapidly causing dramatically lower prices, the WGC would conclude that demand for gold was hitting new records. Gold miners are wasting shareholders' funds by supporting the publication of such analytically faulty data.


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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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