Gold supply & gold demand

THE SUPPLY OF GOLD continues to face severe problems today.

   South African mining companies – hit by nationwide power shortages caused by the surging price of coal worldwide – are now looking to dig down 4 kilometres to extend the life of their largest mines. The costs and dangers are only likely to support Gold Prices going forward.

   As for new discoveries, the "easy" gold in North America and Australia has pretty much gone. Today's biggest exploration projects are in Central Asia and South America. But gold miners in those countries face "other, less tangible obstacles," as the highly respected Virtual Metals consultancy noted recently, "such as a resurgence of resource nationalist politics and a long-standing (and well-deserved) reputation for corruption at all government levels."

   The supply of gold coming from the Western world's central banks also looks set to slow. They accumulated huge reserves of gold bullion at the end of the 19th century, back when gold really was money and every banknote or coin in circulation had to be backed by a quantity of gold held in the government's vaults.

   Now, under an agreement first signed in 1999 – just after Gordon Brown famously dumped one-half of the UK's gold reserves at rock-bottom prices – the European central banks have agreed to cap their gold sales each year.

   But the supply they add to the gold market is likely to slow even further, because Gold Bullion is the only sure means of payment in times of extreme crisis such as war. Any central bank that empties its gold vault entirely would be putting its population at huge political risk.

Gold Bullion Investment: Who's buying gold?

   If gold sales are slowing, who's buying it right now? India remains the world's hungriest gold market, snapping up one ounce in every five sold worldwide in 2007.

   The autumn festival and wedding seasons see jewelry and investment demand peak around Diwali in late October, but Akshaya Thrithiya in late April also sucks a huge quantity of gold off the international market. Between Jan. and April 2007, Indian gold demand rose by 50% from a year earlier.

   Gold demand is also surging in the world's other emerging economies, too. Turkey has seen gold sales rise by 25% from last year; the United Arab Emirates grew gold sales by 26% in Aug. 2007 alone. China's gold demand has now risen by one-fifth from 2006.

   Then there's the new gold demand coming from concerned investors in the Western world. More crucially, people who don't see themselves as "investors" but rather as "savers" instead are also looking to Gold Invesment as a rare, secure and tangible store of wealth.

   Perhaps you're one of them – someone who just wants to provide for the future by saving their wealth, and protecting it, today.

   If so, you might like to visit BullionVault and claim a gram of professional-grade gold – with our compliments – by clicking here now.

   Stored securely in a professional gold bullion vault, your gold will be as safe – physically – as it can possibly be anywhere on earth. As for its future price, BullionVault offers no guarantees. This historic bull market in gold, created by a grinding erosion of the value of money, may all be over tomorrow.

   Somehow, however, we don't think so. And you?

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