This Month in Gold – August 2015

South Korea, China Buying Up Gold
Reuters, Bloomberg – South Korea and China both reported an increase in gold purchases last month. Based on first-half sales through the country’s largest gold merchant, South Koreans are on pace to purchase $860 million in bullion – a yearly record. Analysts estimate South Koreans hold around 800 metric tons of gold in households and private vaults. China upped its gold reserves by 1.1% in July, an increase of about 19 tons. In an unexpected update, Chinese officials said the country owns about 1,677.4 tons of gold. The previous update came in July, after China had been silent on the size of its reserves for six years. Read full South Korea Article>> Read full China Article>>

Perth Mint Gold Sales Hit 9-Month High
Reuters – Gold sales at the Perth Mint climbed to a nine-month high in July. The spike followed a similar rise in US Mint sales of gold coins, which hit a two-year high last month. Perth Mint sales of gold coins and minted bars rose to 51,088 ounces in July, from 31,019 ounces in June. That was the highest increase since October 2014. The Perth Mint runs the only gold refinery in Australia, which is the world’s second-biggest gold producer after China. Read Full Article >>

Americans Core Inflation Heats Up
Associated Press – Prices on a range of United States consumer items rose the most in six years. While inflation as measured by the consumer price index has barely risen in the past 12 months, official core inflation rose 2.3% at an annual rate over the past three months. Apartment rents climbed 3.5% in June from a year earlier. Restaurant prices rose 3% in June from 12 months earlier. Coffee prices jumped 6.1% in January from 12 months earlier, the most in nearly three years. Economists say they expect price increases to continue. Read Full Article>>

Americans Pulling Cash from Bond and Equity Funds
Bloomberg – Since July, American households have pulled money from mutual funds that invest in both stocks and bonds. Credit Suisse estimates that in July, $6.5 billion and $8.5 billion was pulled from equity and bond funds, respectively. Withdrawals continued through the first three weeks of August, with investors pulling $1.6 billion from stocks and $8.1 billion from bonds. It’s the first time since 2008 that both asset classes have recorded back-to-back monthly withdrawals. Traditional analysis says an exit from both stocks and bonds at the same time suggests investors aren’t willing to take on risk in any form. Read Full Article>>

Greeks Turning to Alternative Currencies
Wall Street Journal – In the wake of the country’s economic meltdown and bank withdrawal limits, cash-strapped Greeks have turned to alternative currencies. According to an Athens-based grass roots organization called Omikron Project, there are now more than 80 alternative currency programs, double the number in 2013. One of the most popular alternative payment systems is TEM – a sophisticated form of barter exchange. Users open an account to take payment for goods and services in TEM, then use their TEM to buy products from others. Dozens of local businesses use TEM to sell goods and services, including prepared food, haircuts, doctor visits, and even apartment rentals.  Read Full Article >>

Hyperinflation & Shortages in Venezuela
Wall Street Journal – Venezuelans face crippling shortages of basic staples, as its bolivar currency continues to inflate dramatically. The government stopped releasing inflation figures in December 2014, when the annual rate reached 68%. In the absence of official figures, a financial analyst came up with a way to track the devaluation of the bolivar using the price of common cornmeal cakes. Over nine months, a fourfold increase in inflation was recorded. Basic goods are in very short supply, including milk, rice, cooking oil, corn flour, sugar, sanitary pads, and batteries. Shortages have led to more than 500 protests. Read Full Articles Here and Here>>

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