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November 2015 Review

The World Gold Council Releases its Gold Market Update for Quarter 3, 2015. China is still on a Gold buying spree, boosting reserves by nearly 14 tonnes and news of a goldmine in Britain’s sewers.

The World Gold Council Releases its Gold Market Update for Quarter 3, 2015

According to the World Gold Council (WGC) report, demand for gold bars and coins from consumers globally increased by a third in the third quarter of this year. The report suggested that the demand from individuals accounted for 26% of total worldwide demand for gold and far outstripped what was acquired by central banks and other institutions. As a result of this, individual investors have ploughed $10 billion into bars and coins, sparked by the current low price of gold. It came in a quarter when the price of gold hit a five-year low, averaging $1,120 an ounce during the three months, down 12% on the previous year.

The high demand became a global phenomenon in July 2015 due high interest in Bar and Coin investment from North American, European, Asian and Middle Eastern buyers. The demand from European investors reached 60.9 tonnes, which was the strongest since 2011. One of the factors accounting for this high demand was the on-going uncertainty as to whether or not Greece will still remain in the EU.

However, the lower price was short-lived as the price of Gold increased in the middle of August 2015 due to a suspension of interest rate rise expected in September/October 2015 due to increasingly low US inflation and uncertainty over China’s economic health as well as the unexpected devaluation of its currency.

China still on a gold ‘buying spree’

The historic devaluation of the Yuan this summer was coupled with a gold bar and coin ‘buying spree’ in china as investors sought after protection from further market volatility by investing in precious metals. This increased interest shows little sign of slowing, according to the World Gold Council. Lower prices pushed up overall demand by 8% in the third quarter to 1,120 tonnes compared with a year earlier.

China boosts gold reserves by nearly 14 tonnes

China increased its foreign exchange reserves last month by nearly 14 tonnes, the slowest rate of increase since the central bank began to report on its reserves of the precious metal on a monthly basis earlier in 2015. Data from the People’s Bank of China indicated that Gold reserves were currently at 55.38 million troy ounces by the end of October, an increase from 54.93 million at the end of September.

Indian gold demand falls to eight year low during festive period

The festive seasons of Diwali and Dhanteras usually signal a large increase in gold buying in India, often accounting for around a third of India’s annual gold sales. However, India’s gold buying in the December quarter is expected to decrease to the lowest level in eight years, hurt by poor investment demand from overseas and incessant droughts that have damaged the earnings for millions of farmers in the country.

A goldmine in Britain’s Sewers

A project by Thames Water, in conjunction with geologists at Cardiff University, has discovered that the level of precious metals, in particular, gold, in our sewerage systems compares favourably to those in working mines — with an estimated £13 million worth being flushed away every year.

The cause of this surprising discovery is simple. Each time we wash our hands or brush our teeth, microscopic particles of gold from wedding rings, bracelets and gold fillings are simply washed down the sink. Cars also deposit tiny quantities of platinum and other precious metals from catalytic converters onto the road surface which later gets washed into the sewer. The result is that sewage treatment works are awash with precious metals.

While the individual amounts which are found may seem small, they still hold the possibility for an economically viable mine which could also prove more environmentally friendly.

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