Charles Payne

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> 23 works $5M plus

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Gold Buyers

Much has been made of the dramatic decline in the price of gold, but there's another phenomenon happening. People around the world are scooping up physical gold. While it's true jewelry demand has additional drivers in places like India and China, but demand popped in the United States as well in the first quarter.

People, central banks and technology still seeking the shining metal and history hedge against inflation.



Notes:

> First increase in jewelry for US since 2005

> Chinese jewelry demand of 185 metric tons a new record

> Middle East jewelry demand +15%

In addition to consumer demand for physical gold, Central Banks acquired 109 metric tons during the quarter marking it the seventh consecutive quarter above 100 metric tons. The big sellers were ETFs which saw net outflows of 177 metric tons. Technology sector demand surpassed 100 metric tons for the quarter as well.

It's obvious the anticipated great rotation into equities from bonds has already begun in the gold market. But the unreported story is that of physical demand, which has several narratives. Taken in conjunction with blazing prices in the art world, it's clear many individuals still see physical hard assets as the best way to hedge against an impending explosion in the rate of inflation. It hasn't happened yet, and it probably becomes the worst-case scenario long after most predictions.

For these purchasers, it doesn't matter when it happens. In fact if they were worried about timing, ETF demand for gold would be much higher as it's more liquid than gold bars. While he's the hot artist of the moment, you just don't wake up with the notion of dumping a Basquiat for $50.0 million that same day.


Charles Payne

Charles V. Payne is a regular contributor to the Fox Business and Fox News Networks. He is also the Chief Executive Officer and Principle Analyst of Wall Street Strategies, Inc. (WSSI), founded in 1991 which provides subscription analytical services to both individual and institutional investors.