Apple Major New Gold Buyer – Propel Gold Higher?
TDC Note – If Apple is planning on selling 1 million watches per month and use roughly 750 TONS of gold annually, why are we not seeing a shift in the gold movement? Not necessarily the rigged price, but in the volume of gold? Or is this part of what we are seeing at the Shanghai Gold Exchange and their increased volumes? Inquiring minds want to know!! AND—my favorite question for well over a year—From where is gold going to originate? by Mark O’Byrne, Gold Core – There is a major new buyer in the gold market – Apple – New Apple watch could use up to one third of total annual gold supply – Apple expects to sell one million gold watches per month – Each watch to use up to two ounces of gold – May have enormous ramifications for gold market and propel prices higher Apple may consume up to 746 metric tonnes of gold per year in the production of its new luxury Apple watch, due for release in April. This equates to roughly one third of gold’s total annual global mine supply. The watch will come in three varieties – the entry level “Sports” model, the mid-tier “Apple Watch” and the upper end “Apple Watch Edition” which the company says will be made of 18k (75% pure) gold and is estimated to retail from anywhere between $4,000 and $10,000. Apple ( APPL ) have ordered their manufacturing plants in Asia to produce between 5 and 6 million units. Around half of these will be the Sports model which is expected to retail for $349. Around one third of the order will be made up of the mid-range watch leaving an estimated one sixth of the order to be comprised of the gold edition. Tidbits, the independent blog discussing all things Apple have estimated that each watch will use 2 ounces of gold. While this may be an over-estimation – a watch made of 75% gold would be be quite bulky if it used a full two ounces – it is not impossible, especially if buyers were to opt for a gold bracelet with the watch. Apple’s reported expectation to shift one million units of the Edition model will be a tall order. In the end it will probably come down to the price. Even at the lower end estimate of $4,000 it’s hard to imagine Apple shifting one million units each month. However, Apple’s ability to generate a buzz or hype, depending on your perspective, cannot be under-estimated. While details concerning the actual function of the Watch do not suggest a “must-have” motivation for buying it – at least on technological grounds – Apple raving fans may create the massive demand the company expects. It does not have the element of indispensable usefulness that one could associate with the iPhone or iPad. The major attraction of the ‘Watch’ will be a fashionable one and be about being part of the Apple ‘tribe.’ Continue Reading>>>