Today’s AM fix was USD 1,297.50, EUR 958.13 and GBP 757.40 per ounce.
Yesterday’s AM fix was USD 1,312.00, EUR 965.20 and GBP 765.51 per ounce.
Gold fell $12.60 or 0.96% yesterday to $1,294.10/oz and silver slipped $0.21 or 1% to $20.71/oz.
Gold In U.S. Dollars and Global ETF Holdings - 6 Months (Thomson Reuters)
Gold’s sell off yesterday was again due to concentrated selling on the COMEX. The sale of over 17,000 contracts or over $2.3 billion worth of gold futures contracts in minutes led to gold falling again. Support is likely to be found at previous resistance at $1,280/oz.
The sell off has led to increased demand for physical gold by buyers globally. In China, the world’s largest importer of gold, the sell off was greeted by Chinese buyers as local premiums edged up to just over $1 an ounce on the Shanghai Gold Exchange (SGE) from a small discount in the previous session.
Gold imports into India surged in June where there was a 65% annual rise in gold bullion imports.
Bullion is India's second-biggest import item after oil and was one of the principal factors in putting it on the brink of a full-scale balance of payments crisis last year.
In a desperate bid to trim a gaping current account deficit, India last year increased import duties on gold and imposed a rule that required a fifth of all bullion imports be re-exported.
Those measures had crimped official supply and pushed up premiums in the domestic market, sparking a huge rise in smuggling. However, a strong rebound in gold imports will likely mean the curbs stay in place for some time.
Finance Minister Arun Jaitley surprised bullion markets by keeping the import duty on gold and silver unchanged at 10% in his maiden budget last week.
India’s huge appetite for gold is due to still very high levels of inflation which are still over 7% - retail inflation in June hit 7.31%, and the continuing depreciation of the rupee.
Gold holdings in exchange-traded products rose 9.7 metric tons yesterday to 1,736.9 tons, the most since October 2012.
Gold price drops this year have led to a marked increase in demand for gold as seen in very large increases in ETF holdings (See chart - Orange is Gold, Purple is absolute change in gold ETF holdings). The smart money in Asia, the West and globally continues to use price dips as an opportunity to allocate to gold.
Leaders of theBRICS emerging market nations launched a $100 billion development bank and a currency reserve pool on Tuesday in their first concrete step toward reshaping the Western-dominated international financial system.
The bank aimed at funding infrastructure projects in developing nations will be based in Shanghai, and India will preside over its operations for the first five years, followed by Brazil and then Russia, leaders of the five-country group announced at a summit.
The new global bank is another sign that the dollar’s days as reserve currency of the world are coming to a close.
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IMPORTANT NEWS
Gold Trades Below $1,300 As U.S. Dollar Strength Hurts Demand
(Reuters) Gold traded near the lowest price in more than three weeks in London as investors weighed a stronger dollar against tension in the Middle East. The dollar rose to a three-week high against a basket of 10 major currencies after Federal Reserve Chair Janet Yellen said benchmark rates could increase sooner than expected if inflation and the job market pick up faster than anticipated, even as stimulus is still needed. Bullion slid 3.3 percent in the previous two days, the biggest two-day drop this year.
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Gold Plunges Back Below $1300 As “Someone” Dumps $2.3 Billion In Futures
(Zero Hedge) With The Fed proclaiming bubbles in some of the most-loved segments of the stock market and explaining that the economy is doing "ok" but they must remain dovish for longer for feasr of "false dawns"... what better time than now to dump $2.3 Billion notional in futures... of course the dump in gold's anti-status quo price coincided with an odd v-shaped recovery in stocks... Gold remains above its pre-June FOMC levels still. The break was precipitated by the sale of over 17,000 contracts (or over $2.3 Billion notional)...
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Buy-to-Let Inflating Real Estate Seen Perilous
(Bloomberg) Shahram Kordestani, who owns seven U.K. rental homes, has advice for investors eager to join the swelling ranks of landlords: Do so at your peril.
Kordestani, who has been renting homes in London and southeast England for about 12 years, said when interest rates rise, the jump in mortgage payments will hammer buy-to-let investors who have helped push up property values.
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LinkedIn Co-Founder: Bitcoin is in My Five-Year Investment Plan
(Coindesk) LinkedIn co-founder, early Facebook investor and Greylock Partners partner Reid Hoffman has declared his enthusiasm for bitcoin in a new interview with CNBC’s ‘Squawk Alley’.
The interview aimed to assess Hoffman’s current opinion of opportunities in the market given his experience and success in early social media.
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Germany Busts Price Fixing Cartel - Sausages
(CNN) Germany's sausage makers have been ripping off retailers and consumers for years by operating a cartel to raise prices. Antitrust officials said Tuesday they would fine 21 companies 338 million euros ($460 million) after discovering evidence of collusion dating back decades.
Known as the "Atlantic Circle" after the luxury Hotel Atlantic in Hamburg where it first met, the cartel included small scale producers as well as big international groups such as Herta, owned by Switzerland's Nestle (NSRGF).
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IMPORTANT ANALYSIS
Bank Of England Governor Warns Of A Bubble As Uk House Prices Rise 10.5%
(The Guardian) Rising house prices and high levels of household debt could tip the UK back into recession if left unchecked, the Bank of England governor has warned.
Mark Carney told MPs on the Treasury select committee that the threat of a property bubble was the "biggest risk" to economic recovery over the medium term, as official figures showed house prices rose by 10.5% in the year to May – and more than 20% in London.
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London’s Turning: Sales Collapse By A Quarter
(Property Industry Eye) The London market looks to be unravelling dramatically – and not just in its prime central postcodes – as it appears that buyers are staying away while sellers belatedly attempt to cash in.
Sales across the whole of London are sharply down, while supply is up – by 32% according, yesterday, to the property website Home. It described the surge in new instructions as “startling”.
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Gold Sell Off "Smells Of A Scheme To Push Gold To Or Below $1,300 For Expiration"
(GATA) With the only news today that seemed to have any bearing on the gold price being bullish -- Federal Reserve Chairwoman Janet Yellen's testimony to a Senate committee that interest rates will remain low long after the current round of "quantitative easing" ends ---- how could gold futures prices be smashed for $25 out of the blue?
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Sinclair: Last Take Down Of Gold - Will 'Make New Highs'
(GoldSeek) If the gold market was a horse race then after yesterday’s sudden fall for no apparent reason observers would be calling for a stewards’ enquiry. Certainly those looking at a replacement for the London gold fix ought to be paying attention.
Just days after Goldman Sachs renewed its propaganda onslaught against the precious metal in a long article on Bloomberg the price dropped by 2.3 per cent, its biggest one day drop this year. Did it fall or was it pushed?
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BRICS Announce $100 Billion Reserve To Bypass Fed, Developed World Central Banks
(Zero Hedge) As we suggested last night, the anti-dollar alliance among the BRICS has successfully created a so-called "mini-IMF" since the BRICS are clearly furious with the IMF as it stands currently: this is what the world's developing nations just said on this topic "We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF’s legitimacy, credibility and effectiveness."
As Putin explains, this is part of "a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies." Initial capital for the BRICS Bank will be $50 Billion - paid in equal share among the 5 members (with a contingent reserve up to $100 Billion) and will see India as the first President. The BRICS Bank will be based in Shanghai and chaired by Russia. Simply put, as Sovereign Man's Simon Black warns, "when you see this happen, you’ll know it’s game over for the dollar.... I give it 2-3 years."
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