Why do some nations hold more gold?

Section:

By Will Railton
City AM, London
Wednesday, December 7, 2016

As an asset, gold is entirely speculative. It provides no income or dividends and has few industrial or medical applications. Investors buy it only in the confidence that humans' peculiar and enduring fascination with the lustrous metal will ensure its value through the decades and centuries to come.

Unlike other securities, its price is not dictated to any large extent by supply and demand. "Gold trades more like a currency and its price is driven more by monetary considerations such as inflation, interest rates and exchange rates," writes Nitesh Shah, commodity strategist at ETF Securities. As "Trumpflation" expectations grow, along with anticipation that the U.S. Federal Reserve will begin hiking interest rates more rapidly next year, the gold price has duly fallen. Even a new Sharia standard for investing in gold, which could see some of the $2 trillion currently invested in Islamic finance assets reallocated to physical metal and other products, the price impact would be limited, said Shah.

Its price may have fallen but people continue to buy gold. It has always been a hedge against fears of inflation, devaluation in paper currencies, and has outperformed (as a Federal Reserve Board study has found) during periods of market volatility.

Rather, it is how we hold it that is changing. According to the World Gold Council, inflows into exchange-traded products -- a type of security -- were the main reason for the increase in demand during the third quarter of this year, while demand for physical gold in the form of bullion bars, coins, and jewellery fell sharply.

Across the world, and even within Europe, there are different attitudes to holding physical gold. Citizens in China and India -- by far the world's largest markets -- and even Germany, hold much more than others. The UK holds hardly any. Why is this? ...

... For the remainder of the report:

http://www.cityam.com/255143/why-do-some-nations-hold-more-gold



ADVERTISEMENT

Sandspring Resources Commences 2016 Exploration Campaign

Company Announcement
August 17, 2016

Sandspring Resources Ltd. (TSX VENTURE:SSP, US OTC: SSPXF) is pleased to announce commencement of the 2016 exploration campaign at its Toroparu Gold Project in Guyana, South America.

In 2015 the company completed a 3,700-meter diamond drilling program on the promising Sona Hill Prospect, located 5 kilometers southeast of the main Toroparu deposit. Sona Hill is the easternmost gold anomaly in a cluster of 10 gold features located within a 20-by-7-kilometer hydrothermal alteration halo around Toroparu. Drilling at Sona Hill in 2012 and in 2015 intercepted high-grade mineralization in both saprolite and bedrock, and confirmed the continuity and grade potential of the Sona Hill mineralization.

For the remainder of the announcement and highlights of the 2015 drill program:

https://finance.yahoo.com/news/sandspring-resources-commences-2016-explo...



Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16