Chart gbpGOLD   Chart gbpSILVER  
 
Food for thought
Lack of money is the root of all evil
Mark Twain  
Search for :
LATEST NEWS  :
MINING STOCKS  :
Subscribe
Write Us
Add to Google
Search on Ebay :
PRECIOUS METALS (US $)
Gold 1297.03-7.35
Silver 20.78-0.09
Platinum 1471.10-6.65
Palladium 865.80-3.03
WORLD MARKETS
DOWJONES 17087-30
NASDAQ 447418
NIKKEI 15255-74
ASX 556733
CAC 40 43767
DAX 975419
HUI 239-1
XAU 1000
CURRENCIES (€)
AUS $ 1.4239
CAN $ 1.4452
US $ 1.3458
GBP (£) 0.7901
Sw Fr 1.2145
YEN 136.5140
CURRENCIES ($)
AUS $ 1.0581
CAN $ 1.0737
Euro 0.7430
GBP (£) 0.5872
Sw Fr 0.9024
YEN 101.4200
RATIOS & INDEXES
Gold / Silver62.42
Gold / Oil12.44
Dowjones / Gold13.17
COMMODITIES
Copper 3.230.03
WTI Oil 104.30-0.12
Nat. Gas 3.770.00
Market Indices
Metal Prices
RSS
Precious Metals
Graph Generator
Statistics by Country
Statistics by Metals
Advertise on 24hGold
Projects on Google Earth
Gold “Fever” in Asia and Central Bank Demand Could Cause an “Earthquake” in the Gold Market
Published : July 21st, 2011
816 words - Reading time : 2 - 3 minutes
( 0 vote, 0/5 ) Print article
 
    Comments    
Tweet

 

 

 

 

Gold is trading at $1,599.41/oz, €1,127.77/oz and £989.06/oz. 

 

Gold is mixed against various currencies today but is higher in euros after the euro has fallen on concerns that European leaders gathering for the summit in Brussels may not be able to resolve the Eurozone’s debt crisis and prevent contagion in the financial system.

 


Cross Currency Rates

 

Gold is trading at USD 1,600.10, EUR 1,128.1, GBP 989.50 and CHF 1,315.10 per ounce.

 

Asian indices were mixed and European indices have snapped a two day advance, and commodities declined, on signs economic growth is slowing in Europe and China. The Stoxx Europe 600 Index slipped 0.4 percent as Ericsson AB lost the most in more than two years and earnings missed analysts’ estimates. The FTSE has fallen 0.35%. Futures on the Standard & Poor’s 500 Index slid 0.3 percent.

 


Gold and G10 Currencies Versus the US Dollar – 2011 YTD

 

An interesting analysis article on gold by Reuters confirms massive and growing demand for physical gold in Asia and the risk of dislocations and rapidly rising prices in the gold market due to central bank demand.

 

The giant middle class populations in Asia, especially China and India are buying physical gold bullion in volume due to concerns about global growth, in order to protect themselves from stubbornly high inflation and concerns about the declining value of their respective paper currencies.

 

Gold demand in China alone is expected to rise about 20% to near 700 tonnes this year from 570 tonnes in 2010. 

 

Official figures show inflation at 6.4% but real inflation is likely higher and the authorities are struggling to tame annual inflation.

 


Gold and G10 Currencies Versus the US Dollar – 2011 YTD

 

The massive increase in demand from Asia is sustainable. Especially in China where gold ownership was banned from 1950 to 2003 and therefore per capital consumption of gold is increasing from a near zero base.

 

Besides this Asian demand, there is also the continuing and growing central bank demand. Central banks were net sellers for most of the last 30 years and became net buyers in 2010 due to monetary and systemic concerns.

 

The analysis piece reports something experts on the gold market have been saying for some time, which is that “central banks have to tread lightly, as sizable purchases could jolt the relatively small gold market.”

 

“Last year, global gold supply, including mine production and scrap, stood at 4,108.2 tonnes, which translates into about $210 billion at current price.”

 

Meanwhile, “the amount of U.S. debt held by the public stood at $9.75 trillion by July 19, doubling from five years earlier -- adding nearly $1 trillion a year, based on data from the U.S. Treasury Department.”

 

Dong Tao, chief regional economist at Credit Suisse said that "gold supply simply doesn't grow as fast as China's foreign reserves. Only the increase in U.S. debt can match that."

 

Central banks could raise gold holdings marginally, he said, but sizeable purchases could cause an “earthquake” in the market.

 

"We can buy whatever with our money without causing price distortion, but a $2-trillion, $3-trillion elephant will certainly cause distortion”, said Tao.

 

China has the world's biggest foreign reserves, which stood at $3.2 trillion at the end of June. Gold holdings of 1,054.1 tonnes make up just 1.6 percent of its reserves, though China ranks sixth among the world's top official holders of gold.

 

Some coverage of gold’s record nominal highs in recent days suggested that gold’s rise in value was due to investors “piling into” gold due to fears about the EU and U.S. debt crisis. The phrase “piling in” suggests that rising gold prices are due to speculative “hot money” and that therefore prices would fall as quick when the speculative money decides to sell.

 

However, Asian and central bank demand for physical gold bullion is not speculative rather it is smart money which is passively diversifying and buying and holding for the long term.  

 

SILVER 
Silver is trading at $39.84/oz, €28.09/oz and £24.64/oz. 

 

PLATINUM GROUP METALS 
Platinum is trading at $1,774.75/oz, palladium at $794/oz and rhodium at $1,900/oz. 

 

NEWS
(Reuters)
Analysis: Asian investors stricken by gold fever on record price

 

(Wall Street Journal) 
Gold Push Unlikely to Be Scrapped

 

(Bloomberg)
Gold Advances as China Slowdown Reignites Global Economic Growth Concerns

 

(Reuters)
PRECIOUS-Gold hovers around $1600/oz; euro zone summit eyed

 

(The Sun)
£3 Billion Golden Yacht is  World's Most Expensive

 

(Wall Street Journal)
Family Loses Coins (Double Eagles) Worth Millions in Dispute With U.S.

 

(Reuters Africa)
Hong Kong Mercantile Exchange to launch silver futures on July 22

 

COMMENTARY
(Forbes)
 
Gold - What The Left Fails To Grasp Is That Gold Equals Jobs

 

(BBC) 
Is Now the Time to Sell Your Gold?

 

(ZeroHedge) 
Fed Preparing For US Default Says Plosser

 

(Got Gold Report) 
Gene Arensberg: Comex commercials pile on shorts in gold

 

(Forbes)
Gold Is Truth, Unchained CPI Leads To A Dog-Food Diet

 

Mark O’Byrne

 

Goldcore

 

 

Data and Statistics for these countries : Hong Kong | All
Gold and Silver Prices for these countries : Hong Kong | All
Tweet
Rate :Average note :0 (0 vote)View Top rated
Previous article by
Mark O'Byrne
All articles by
Mark O'Byrne
Next article by
Mark O'Byrne
Receive by mail the latest articles by this author  
Latest comment posted for this article
Be the first to comment
Add your comment
TOP ARTICLES
MOST READ
TOP RATED
MOST COMMENTED
Editor's picks
RSS feed24hGold Mobile
Gold Data CenterGold & Silver Converter
Gold coins on eBaySilver coins on eBay
Technical AnalysisFundamental Analysis

Mark O'Byrne

Mark O'Byrne is executive and research director of www.GoldCore.com which he founded in 2003. GoldCore have become one of the leading gold brokers in the world and have over 4,000 clients in over 40 countries and with over $200 million in assets under management and storage.We offer mass affluent, HNW, UHNW and institutional investors including family offices, gold, silver, platinum and palladium bullion in London, Zurich, Singapore, Hong Kong, Dubai and Perth.
Mark O'Byrne ArchiveWebsiteSubscribe to his services
Most recent articles by Mark O'Byrne
7/23/2014
7/22/2014
7/21/2014
7/18/2014
7/17/2014
All Articles
Comment this article
You must be logged in to comment an article8000 characters max.
 
Sign in
User : Password : Login
Sign In Forgot password?
 
Receive 24hGold's Daily Market Briefing in your inbox. Go here to subscribe or unsubscribe.
Disclaimer