Abitibi Metals boosts resource by 62% at B26 polymetallic deposit in Quebec
Indicated resources increased to 11.3 million tonnes from 6.9 Mt.
As I have been writing in these pages, after a bull market that has gone on for 12 years, the recent pullback in gold bullion prices should be seen as a correction in an ongoing bull market in the metal. I see the pullback as a buying opportunity.
While news headlines flash a bearish sentiment towards gold bullion prices, the gold bears are screaming about how much money central banks have lost due to the plunge in prices and the gold miners are facing pressures. The usual gold bullion consumer countries,IndiaandChina, are seeing robust demand.
According to the All India Gems & Jewellery Trade Federation,Indiais experiencing its greatest demand this year as gold bullion prices have declined. (Source: Bloomberg, April 18, 2013.)
In China, customers are lining up to buy gold bullion. According to the director of sales and operations at Chow Sang Sang Holdings International Limited, the number of gold bullion products sold in the Hong Kong and Macauarea during the weekend of April 13 soared 150%.
Other countries in the global economy are witnessing increased demand for the metal as well. As talk of gold bullion entering a bear market continues, consumers from countries like Australia and Japan have ramped up their gold buying.
Gold bullion sales at The Perth Mint in Australia have soared. The treasurer of The Perth Mint, Nigel Moffatt, commented on this situation by saying, “the volume of business that we’re putting through is way in excess of double what we did last week.” He added, “there’s been people running through the gate.” (Source: “Golden times for Perth Mint,” The Age April 17, 2013.)
In Japan, at Ginza Tanaka, a precious metal store in Tokyo, gold bullion buyers waited for three hours to buy the metal. (Source: Reuters, April 16, 2013.)
Regardless of what I hear from the gold bears, I am still bullish on gold. The reality is that central banks will continue to print paper money no matter what. They don’t have any other option. But the more paper money they print, the greater the fall in the value of their currencies.
Do the bears realize central banks have moved away from being net sellers of gold and have been net buyers now for a while? Readers of Profit Confidential know that in 2012, central banks bought the most gold bullion in 48 years.
It would not surprise me to see central banks rush to buy more gold bullion, just like consumers are doing right now in India, China, Japan and Australia.
