Gold Supply and Demand

As I predicted here, the gold supply is declining by 1.4% in 2012 due to lower recycling. On the other hand, the gold demand from central banks soared.

It is odd that the gold price hasn't reacted on this yet.

The downward action this week in gold has much to do with the 1 week holiday in China. Fundamentals for gold look very good to me, at least on the demand supply side.

On a side note, APMEX silver premiums have gone to a new high of 16.5%. Very interesting.

Chart 1: APMEX premium on silver