Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19
Crude Oil Price Fails At Critical Fibonacci Level - 15th May 19
Strong Stock Market Rally Expected - 15th May 19
US China Trade Impasse Threatens US Lithium, Rare Earth Imports - 15th May 19
Gold Mind Reader's Guide to the Global Markets Galaxy: 'Surreal' - 15th May 19
Trade Wars and Other Black Swan Threats to Your Investments - 15th May 19
Our Long-Anticipated Gold Momentum Rally Begins - 15th May 19
Defense Spending Is Recession Proof - Defense Dividend Stocks - 15th May 19
US China Trade Issues Will Drive Market Trends – PART II - 14th May 19
The Exter Inverted Pyramid of Global Liquidity Credit risk, Liquidity and Gold - 14th May 19
Can You Afford To Ignore These Two Flawless Gold Slide Indicators? - 14th May 19
As cryptocurrency wallets become more popular, will cryptocurrencies replace traditional payments? - 14th May 19
How US Debt Will Reach $40 Trillion by 2025 - 14th May 19
Dangers Beyond a Trade War with China - 14th May 19
eBook - Greatest Tool for Trading? - 14th May 19
Classic Pitfalls for Inexperienced Traders - 14th May 19
Stock Market S&P 500 Negative Expectations Again - 13th May 19
Why Rising Living Standard in China Offers Global Hope - 13th May 19
Stock Market Anticipated Correction Starts On Cue! - 13th May 19
How Chinese Trade Issues Will Drive Stock Market Trends - 13th May 19
Amazon SCAM Deliveries for Fake Verified Purchaser Reviews "Brushing" - 13th May 19
Stock Market US China Trade War Panic - Video - 13th May 19
US Stock Market Leading Macro Economic Indicators Update - 12th May 19
SAMSUNG - BC94.L - Investing in AI Machine Intelligence Stocks - 11th May 19
US Increases Trade Tariffs Against China – Stock Markets, Gold, and Silver - 11th May 19
Who Has More To Lose In A No Deal Brexit? - 11th May 19
Gold at $1,344 Will Start Real Fireworks on the Upside - 11th May 19
Make America’s Economy Great Again - 10th May 19
Big US Stocks’ 2019 Fundamentals - 10th May 19
Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - 10th May 19
Stock Market Shake-Out Continues – Where Is The Bottom? - 10th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

How Apple’s Gold Watch Will Keep the Bull Market Ticking

Commodities / Gold and Silver 2015 Mar 13, 2015 - 06:11 PM GMT

By: MoneyMetals

Commodities

An interesting message hit the news wires around the world in late February. Among many others, Mining.com announced breathlessly, “Apple buying a third of world’s gold to meet demand for iWatch.” The text continued with:

Technology giant Apple may soon buy up one third of the world’s gold in order to meet the demands of its highly anticipated Apple Watch, according to reports. Interest in the high-end model, featuring 18-karat gold casing, is picking up and the firm is already taking the necessary steps to have enough of them in stock.


Instantly, the chat rooms filled with prognosticators debating the merits or lack thereof for Apple’s next big thing. But Apple’s announcement is both less and more important than you might think.

It is less important because you can’t predict how popular the watch will be – let alone how much gold will go towards its production. Making investment decisions based upon a news tag like this one is simply not good strategy.

In the overall scheme of things, how much supply an Apple gold watch soaks up is unlikely to be a game changer compared to other factors influencing the gold supply/demand universe.

What makes this announcement very important is something that David Morgan has often discussed in his interviews at Money Metals Exchange and in presentations at conferences across North America. That concept is incremental demand.

Over time, the gold and silver bull markets will be driven by the total overall demand change in relation to available supply. But big price changes are determined on the margins of demand. It is the continued addition of new uses for the precious metals – in both the industrial and investment arenas – that adds fuel to this long-term bull market.

Acorns Can Become Mighty Oaks

Individually, the myriad of new uses are small potatoes in terms of how much supply they command on their own. But taken together, they create small waves of desire to acquire these items. Over time, they have the potential to become demand “straws” that can break the supply camel’s back. This marginal action, combined with the primary big volume consumption drivers, may cause the price of a commodity – any commodity – to shift from a solid, plodding bull run, into a vertical, public mania-fueled moon shot.

Here's one marginal demand change (just one of over 10,000 commercial uses) for silver: It’s a Mercedes-Benz Vision G-Code, whose skin acts as a solar panel.

Fear and Love Drive Gold and Silver

Frank Holmes popularized the terminology used to describe the twin drivers of gold demand, calling them the Fear Trade and the Love Trade. People around the globe buy and hold gold when they fear geo-political or economic uncertainty.

By that definition, many places in the world today demonstrate a need for the kind of financial protection that precious metals have always offered. Venezuela, Argentina, Russia, Iraq, the Eurozone – the list gets longer by the week.

Now too, this increasingly includes the United States, as investors and those who wish to protect a portion of their hard-earned savings from continued erosion by government deficit-spending and under-reported inflation start demanding more gold and silver.

But people also buy precious metals to give as gifts, to show affection and respect – the Love Trade. Massive purchases throughout Asia, most notably in India and China, have established a durable demand trend that, in conjunction with Fear Trade buying, may move the tonnage of physical metals’ sales substantially higher.

Silver benefits from this dynamic, which when added to its primary driver – industrial demand – makes for an even more compelling investment and wealth-protection magnet.

And finally, there are platinum and palladium. With the lion’s share of both metals’ uses devoted to automotive and truck catalytic convertors, they should, by any definition, be first and foremost looked upon as industrial metals. However, in both Asia and the West, these two “silvery” metals are increasingly being purchased in ingot and bullion round forms for their investment value, and in the jewelry trade for their beauty and durability.

About the possibilities inherent with Apple's new product, Stu Thomson of Graceland Updates had this to say:

With a market cap of nearly $1 trillion, and the complete instability of most global fiat, the move into gold watches with weight becomes a currency hedge for the company, in addition to being a revenue generator… The Apple watch can unlock your car and tell you how charged your electric car is, and I would argue this is the first "parabolic ramp up" of the love trade. It may also reintroduce the gold love to the West.

Gold iWatch Is One of Many "Straws in the Wind"

As an investor who is bullish on the precious metals, you want to see continued new uses being found for them. And that is exactly what is taking place in all four of today’s precious metals markets – gold, silver, platinum and palladium.

Long before Apple made its gold watch announcement, precious metals were helping people “tell time.” They gave – and continue to give – those who possess them the ability of not only protecting their wealth, but often times their families’ lives during times of approaching financial storm and political strife. The clock is ticking.

David Smith is Senior Analyst for TheMorganReport.com and is a regular contributor to MoneyMetals.com. For the last 15 years, he has investigated precious metals mines and exploration sites all over Argentina, Chile, Mexico, China, Canada, and the U.S. and shared his findings and investment wisdom with readers, radio listeners, and audiences at North American investment conferences.

MoneyMetals.com

© 2015 David Smith - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules