So the gold bull is done?

Q1 gold coin sales, in ounces and the % change from Q1 previous year, 2002 to 2012

Q1 gold coin sales, in ounces and the % change from Q1 previous year, 2002 to 2012

Demand for gold is apparently collapsing, leading some folks to speculate that the bull market in gold has ended, as long ago as August 2011. The chart above shows Q1 sales of gold coins for the period 2002 to 2012 (black line)and % change quarter on quarter (red bars). Clearly sales of gold coins to retail investors has been falling, but I think there might be another explanation besides the end of gold’s bull market.

Keep in mind that physical coins are only one way to hold gold, and not that popular compared to other vehicles such as exchange traded funds (ETFs). The biggest gold ETF, GLD holds almost $70B worth of gold and continues to purchase.

I’ve previously written about gold’s quarterly returns, historically Q1 is very weak. Also keep in mind next week the ECB is engaging in another round of quantitative easing which could be a plus for gold. Speaking just for myself, I’m not selling either gold or silver yet, and in fact am adding physical from time to time.

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