COLUMN-Falling gold supply a rare beacon of hope for price recovery: Russell

viernes 14 de noviembre de 2014 01:41 GYT

--Clyde Russell is a Reuters columnist. The views expressed are his own.--

By Clyde Russell

LAUNCESTON, Australia, Nov 14 (Reuters) - It must be getting increasingly hard for the World Gold Council to find something positive to focus on when compiling its quarterly report.

The latest instalment, released on Thursday, is no exception and the council, which represents gold producers, chose to highlight what it termed the "good health" of the market for jewellery.

This was despite a drop in jewellery demand of 4 percent year-on-year in the third quarter, but maybe it looks better than highlighting the fact that overall gold demand fell to the lowest level in nearly five years.

However, instead of focusing on the demand side of the gold equation, if the council was looking for some better news on the outlook for the precious metal, the supply side offers some hope.

It's becoming a more common theme in commodities this year, namely that supply-side dynamics are driving markets far more than demand, but many in the market have been slow to adjust to this.

Witness iron ore and coal, where much of the commentary is about the state of demand in China, while less is said of the massive boost to supply in recent years of these commodities, which has driven prices down to five-year lows.   Continuación...