Gold And Silver Headlines

China’s gold “demand” dropped 19.4% in the first six months of 2014 from year ago, reports the China Gold Association. In the same period, production rose strongly as miners increased output to protect profit margins.

Chinese gold demand from January to June was estimated at 569.45 tonnes (18.3 million ounces), compared with 706.36 tonnes (22.7 million ounces) in the same period last year. The bulk of the decline was attributed to investors losing their confidence in the metal as an investment tool after the gold price registered its first annual decline in 13 years. Sales of gold bars and coins fell 62.1% and 44.3%, respectively. Lower demand this year is also attributed in part to huge buying last year, when the drop in prices prompted many to bring forward their purchases, eating into 2014 demand.

Meanwhile, jewelry and industrial demand in the first half rose 11% from a year ago to 426.17 tonnes (12.4 million ounces), while industrial consumption rose 11.3%.

The decline in Chinese gold consumer demand was foreseen. However, the long-term demand from the country is expected to expand to at least 1,350 tonnes (39.3 Moz) by 2017, due to growing China’s middle class and its wealth, the World Gold Council noted this April.

In this context, Jeff Clark’s article in last week’s dispatch debunking widespread reports that Chinese demand for gold is falling becomes particularly important.

Pay for a Hotel Room with Gold (Mining.com)

Rydges Resort and Spa, a hotel in the Wild West mining town of Kalgoorlie, in West Australia, allows travelers to pay accommodation bills with gold nuggets, bars, rings, and “anything” as long as it’s gold.

The idea came up in light of the upcoming mining conference that will take place in Kalgoorlie in August, but the resort is going to accept the yellow metal as payment all year round.

Trading in gold was standard practice in Kalgoorlie-Boulder in the late 1800s and there are still a few businesses that accept the precious metal as payment.

“People buy cars in gold here (…) I’ve also heard of some other types of businesses even doctors and stuff who have been accepting gold,” said Parkinson-Bates, the hotel manager.

So far, no one has paid the hotel in gold yet. Our guess is that people who own gold are bullish on its price and don’t want to spend it before it goes up again.

Infographic: The Gold Series—2014 Trends and Beyond (Mining.com)

As it is often said in investing, “the trend is your friend”. See the latest infographic from Visual Capitalist that defines the major trends that will favor gold for years ahead.