More thoughts on gold’s supply and demand

This posting delves deeper into the global demand and supply situation for gold

Last Saturday, I posted my estimate of gold supply and demand, figures which in the old days we would say were concocted on the back of a cigarette packet. One of my paid Substack subscribers noticed an error, so this follow-up posting corrects it and looks at a bit more detail.

I must say, that having input from my growing band of paid subscribers adds value to the overall Substack project, and it prompts me to compare the calculation for 2023 with 2022. I use various sources as deemed appropriate, and my calculations confirm that gold still appears to be flowing from west to east, drawing down on western above ground bullion stocks predominantly, to an extent perhaps not commonly appreciated and may be beginning to run out.

As a caveat it must be admitted that the whole point of gold ownership is to disguise possession from governments. Either China and Russia disguising their ownership from the western hegemons, or America’s Federal Government not coming clean on how much gold the US Treasury actually owns. And the true position of earmarked gold held for foreign governments by the New York Fed — as opposed to the book entries which are not the same as actual possession. Furthermore, people from the very wealthy down to those having only modest possessions accumulate bars and coin away from statist prying eyes.

It is with all these uncertainties in mind that the reader must accept that there is a high degree of subjectivity in any calculations of gold demand, including mine. But the objective of this posting is to draw attention to the underlying market conditions, timely given that gold appears to be moving into new high ground in US dollars.