Gold Demand: Could This Factor Drive it Down?

Sometimes it sounds like gold is the only sector in decline these days.  After all, stock markets are making record highs, and even beaten-down retailers like JC Penney have seen their stock prices bounce. By contrast, gold demand remains sluggish.  

But all is not rosy everywhere.  Chinese growth is slowing, with demand for raw materials is projected to be 30% less in the coming year.  This does not bode well for construction materials, copper or oil – and possibly not for gold, either.  

We don’t think about gold as a construction material, per se, but there are uses for gold in electronics, which are used by companies inside buildings. The trickle-down is fairly obvious: fewer buildings means fewer companies, which means less of everything that companies use.

Commodities markets are pricing in these expectations now, and we can’t tell yet where the drop will stop.  Today’s featured article looks around the commodity space at influencing factors, hopefully saving you from reading a lot more articles.

Related: Is Bitcoin Competing With Gold? Learn More Here. 

About the author

Mike Hammer

Mike Hammer has had a wide-ranging career, with trading and investing as a continuing theme. Mike graduated from UC Berkeley with a business degree, then worked with Macy's in their operations arm. He left Macy's and spent a summer trading his own account, which taught him a lot about trading in general and markets in particular. Trading through the Black Monday and the Crash of 1987 showed him how most people are unprepared for upheavals in their trading. He then joined Waddell & Reed as a financial advisor, helping regular people understand their finances and meet their life goals.

Then came the usual story - Mike met and married the lady of his dreams. They moved to upstate New York, where Mike worked first for a small manufacturing consulting company, then Cornell University. While loving the work and the higher-education atmosphere, Mike missed the world of finance. Eventually, he signed up for stock trading coaching with the Adam Mesh Trading Group, to learn from people who understood modern markets. Within a year, Adam asked Mike to become a stock trading coach.

Since then, Mike has trained over 200 individuals, spoke at several national conventions, and is a frequent contributor to conference calls across the Adam Mesh community. Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keep him in touch with "the student mindset". Mike closely follows the gold, energy, and financial sectors. His motto is "Plan your trade, then trade your plan!"

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