originally published on 2025-01
This is why Gold is rising even though there is no demand for it. It’s bonkers. This 140 pages document was where I got my answer.
If you look into any of the supply/demand charts of gold, you will quickly notice that demand has been flat while the supply has gone slightly up. Why on earth is gold rising then?
Usual articles are all the same- inflation expectations, real yields, etc. etc. They do not make sense because most of them do not touch the non-existing increase in official demand.
🚨 That is because Billions of Dollars of gold purchases are unreported.
In 2022 alone, at least(!) 435 tons of gold have been smuggled from Africa without any documentation. Most of it settles in UAE.
Saudis have been also buying- over 160 tons in the last 2 years, as per WGC data. This is likely due to Russians fleeing their country and settling in the Gulf Region as the jump of undocumented purchases peaked in 2022, at the start of Ukraine-Russia war.
As of now, around 30% of supply output is bought by unknown buyers and trend is up. (BullionVault)
As T.RowePrice estimated, in 2022 and 2023, central banks have unofficially bought around 1600 tons of gold. It’s an insane amount.
It seems like the world is quietly moving towards the gold standard.
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