Despite volatility, unprecedented physical gold demand leaves this as gold’s next price target.
KWN has now released an extremely powerful and timely interview with Jonathan Haycock (LINK BELOW). For now…
Unprecedented Physical Gold Demand
May 16 (King World News) – John Ing: For the past three years, gold has been propelled by central banks buying physical gold seeking to diversify from dollar assets, in a reassessment of their exposure to the US economy. Central banks have purchased up to 20 percent of supplies or more than 1,000 tonnes annually for the last three years. After a six-month pause, the People’s Bank of China (PBoC) resumed purchases last November to about 2,292 tonnes adding 13 tonnes to its official reserves. China purchased 570 tonnes last year becoming the world’s fifth largest holder while its voracious consumers purchased 510 tonnes of gold jewelry, slightly behind India’s purchases of 560 tonnes.
Official data shows that China tripled its gold holdings from a few years ago to 6 percent of total reserves. China is the world’s largest producer and is believed to have augmented “official” purchases with unofficial offtake from the Shanghai Gold Exchange (SGE), the world’s largest physical gold dealer. Türkiye and Poland were also big buyers in April.
The US remains the largest holder of gold at 8,133 tonnes valued at 42.22/oz. Given America’s financial woes there is talk of revaluing its reserves which would be worth some $800 billion, filling a financial gap. Can it be done? In 1972 the US revalued gold to $38/oz and subsequently $42.22/oz in 1973 and transferred $800 million into the country’s monetary base. Today revaluing America’s gold holdings would add $11 billion to the government’s coffers and, also put a floor under the price of gold.
A Golden Move
Gold topped $3,500/oz and is up 25 percent year to date, as geopolitical uncertainties prompted investors into one of the few haven assets left. Amid fears of a trade war, investors poured into the gold backed Exchange Traded Funds (ETFs), purchasing 226.5 tonnes in the first quarter up from 113 tonnes last year according to the World Gold Council (WGC). China has given the green light to insurance groups to purchase and hold physical gold reserves.
$4,000 Is The Next Target For Gold
We do not yet know how high gold will go. For a long time we called for $2,000/oz, then $3,000/oz and $3,200/oz. If the dollar is no longer the world’s currency, we believe gold could revert back to its former role and $4,000/oz is the likely next target. However given recent doubts about the world’s largest debtor’s credit worthiness, the moon might not be high enough.
This Bull Market In Miners Has Just Begun
Gold miners put in better performances with average all-in costs of $1,500/oz but we believe that we are still in the early stage of their move because the group remains underowned. With margins today at 60 percent, gold miners have raised dividends and instituted buybacks. M&A activity was active as companies sought to replace declining reserves since it is cheaper to buy ounces on Bay Street than to explore. With miners today generating huge cash flows and after having dusted off old projects, they are looking to replace depleting reserves. Last year, M&A activity showed that the average paid for an ounce of in-situ reserves was close to $250/oz. This bull market has just begun.
One Of The Best Audio Interviews Of 2025!
To listen to Jonathan Haycock give one of the best audio interviews of 2025 CLICK HERE OR ON THE IMAGE BELOW.
Just Released!
To listen to Alasdair Macleod discuss the takedown in the gold and silver markets and what to expect next CLICK HERE OR ON THE IMAGE BELOW.
© 2025 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the articles is permitted and encouraged.
