Gold’s Panic Sell-Off Presents A Buying Opportunity

From Sean Brodrick: Gold investors, forget Europe. Yeah, yeah, gold prices went down on the idea that France might vote for someone boring. Panic leaked out of the market like an old balloon.

So, gold prices went down. That’s nice. I told you why this is actually good. Meanwhile, there is a tidal wave of demand building in Asia.

I’m going to tell you some big news on China. Big for gold. But first …

First, let’s deal with India.

Earlier this month, I told you how gold imports into India jumped sevenfold in March. India’s gold imports rose to 120.8 metric tons in March from a year earlier.

Demand from jewelers in anticipation of India’s wedding season was off the charts. That’s partly due to the fact that demand was suppressed last year.

Last year, India’s gold consumption fell 37% to hit the lowest level in seven years. That was due to all sorts of chaos caused by a hike in taxes on imported gold, a resulting jeweler’s strike, and general government shenanigans.

This year, India is getting back in its golden groove. And yeah, that’s bullish.

Also in that same story, I reminded you that “India is the world’s No. 2 consumer of gold, after China.”

So we’ve all been waiting to see what’s happening with China.

Hoo, doggies! Something’s happening all right.

Here is a chart of gold imports into China through Hong Kong.

Source: Goldcore/

Whee! In fact, Reuters reports that gold bullion arriving into China via Hong Kong — its main vein for gold imports — more than doubled month-on-month in March.

Well, that’s pretty bullish. But part of the frustrating thing about China is they’re so danged secretive about their gold markets, gold holdings, you name it.

However, there is another measure of Chinese demand for imported gold: its flows through Switzerland.

And sure enough, somebody has been buying A LOT of gold from Britain and shipping it into Switzerland.

Source: Goldcore/

What happens to the gold there? Well, big bars of gold, the kind stored in London, are melted down and recast into smaller bars for sale in Asia.

“Gold exports to China from the refining hub of Switzerland almost doubled to 46.4 metric tons in March,” according to Bloomberg. That’s up from 23.6 tons in February.

Another 30.29 tons went to China. You get one guess where that gold ended up.

And let’s not forget India. India’s gold imports from Switzerland soared to 72.5 metric tons at the same time.

Singapore is a big buyer, too. Singapore is often a “back-door” channel into China. Singapore also exports gold all across Asia.

So, you get a Swiss gold export chart that looks like this.

Source: Goldcore/

The four big bars I’ve circled are Swiss gold exports in March to China, Hong Kong, India and Singapore.

So yeah, you might say that Asian demand for physical gold is rising. Heck, I’d say we’re seeing a tidal wave forming. It’s all part of the surge in demand by Asia’s the ballooning middle class that I warned you about.

So now we can add renewed Chinese demand to that long list of bullish forces for gold.

So now gold is selling off. This is due to panic leaking out of the market as France chooses the middle road. And the market seems to be hanging a lot of hope on President Trump’s tax cuts.You know what I’m talking about: declining gold reserves, a lack of spending on new exploration, a top in the U.S. dollar, declining gold grades, peak gold, rising inflation, the cyclical nature of gold. And more.

To be sure, these tax cuts are not paid for. Which means, even if President Trump is successful in getting his tax cuts, the federal deficit and America’s national debt will balloon.

The debt used to matter to the markets. It might matter again. And when it does, you’ll know what you want to know.

So go on. Give me a big pullback in gold. We’ll get the best buying opportunities we’ve had in a long time. And then on the next turn of the wheel, the profit opportunities won’t just be good. They’ll be glorious.

The SPDR Gold Trust ETF (NYSE:GLD) was trading at $120.51 per share on Thursday morning, down $0.33 (-0.27%). Year-to-date, GLD has gained 9.94%, versus a 6.72% rise in the benchmark S&P 500 index during the same period.

GLD currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 33 ETFs in the Precious Metals ETFs category.

This article is brought to you courtesy of Uncommon Wisdom Daily.

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