Quote The annual value for gold demand in 2011 equaled $205.5 billion, an all-time high and a 29 percent gain above the 2010 value. Jewellery accounted for $99 billion in gold demand, while investment demand was close behind with nearly $83 billion. Interestingly, the majority of investment demand value was due to physical bar and coin demand, which represented $75 billion. As more investors remain skeptical and lose confidence in the global financial system, they turn to physical gold for protection. The annual report explains, "The bar and coin story is one which has traversed borders led by China, India and Europe, but other markets have also participated in terms of relative growth rates. Store of wealth demand, diversification, negative real deposit rates, the threat of inflation in developing markets, deflation in developed markets and currency debasement have all contributed to driving up demand over the last few years." In 2011, the average price of gold averaged $1,571 per ounce, which was more than 28 percent higher than its 2010 equivalent. While this contributed to the record annual value for gold demand, it also proved an argument against gold to be incorrect. Many gold critics claim that as gold prices increase, the supply of gold will also increase from people selling any form of gold they might hold. However, this is simply not true. Despite a nominal record high of $1,900 per ounce, recycled gold declined by 2 percent. In fact, recycled gold supply has been declining since 2009, when it hit a peak of 1,694.7 tonnes. The WGC explains, "Despite the rise in prices, recycling activity was constrained by a combination of expectations for higher prices, acclimatisation to a higher current price level, economic growth and exhaustion of near-market supply." http://www.kitco.com/ind/McWhinnie/feb202012.html
People will always hold out selling their stuff for a higher price until it is too late..... There is also the personal attachment to take into consideration for selling "scrap' jewlery from the wider community. You can imagine the comments at pawn shops "My girlfriend gave me this bracelet I could never sell it.....well if it hits $10,000 / ounce I might come back". Bring on $2700 + /ounce and above, I think I might consider selling around there.
