|
Gold’s London AM fix this morning was USD
1,654.00, EUR 1,261.63, and GBP 1,040.25 per ounce. Yesterday's AM fix was
USD 1,643.75, EUR 1,255.92 and GBP 1,037.72 per ounce.
Silver is trading at $31.66/oz,
€24.08/oz and £19.87/oz. Platinum is
trading at $1,591.50/oz, palladium at $636.30/oz and rhodium at $1,350/oz.
Cross Currency Table – (Bloomberg)
Gold climbed $17.70 or 1.2% in New York yesterday and
closed at $1,659.00/oz. Gold gradually ticked lower in Asian trading prior to
tentative gains in Europe and is now trading around $1,655/oz.
Gold's 1.2% gain yesterday was the largest since March
26 and its four sessions of gains is the longest winning streak in two
months.
XAU/CNY (Renminbi or Yuan)
Monthly Chart – Bloomberg
A positive sign for gold was that US COMEX futures
volume was the strongest in a week and gold rose despite a sharp 1.5% drop in
the S&P 500 and other equity indices and a large fall in crude oil and
grains.
Gold appears to be catching a breather today and is
taking a break after the four sessions of consecutive gains driven by safe
haven flows on a cloudy global economic outlook.
Gold’s proven safe haven attributes were clearly
seen again yesterday as the sharp bout of risk off in international markets
saw gold again have an inverse correlation with riskier equity and commodity
markets.
SHANGHAI SE A SHARE INDEX – 2002- Today
Markets continue to digest the very poor US employment
number which has led investors to again question the rose tinted view of the
US economic ‘recovery’.
The Fed’s beige book will be released at 18.00
GMT. Investors will also watch the European government debt market, after
Italian and Spanish debt was met with decreased demand due to shaky euro zone
economies and renewed contagion concerns.
Chinese Gold Imports From Hong Kong Rise Nearly 13 Fold
– PBOC Likely Buying Dip Again
Chinese gold demand remains very strong as seen in the
importation of 40 metric tonnes or nearly 40,000
kilos of gold bullion from Hong Kong alone in February.
Hong Kong’s gold exports to China in February
were nearly 13 times higher than the 3,115 kilograms in the same month last
year, the data shows.
Shipments were 72,617 kilograms in the first two
months, compared with 10,564 kilograms a year ago or nearly a seven fold
increase from the record levels seen last year.
China’s appetite for gold remains strong and
Chinese demand alone is likely to put a floor under the gold market.
Reuters Global Gold Forum
Mainland China bought 39,668 kilograms (39.668 metric
tons), up from 32,948 kilograms in January, according to export data from the
Census and Statistics Department of the Hong Kong government.
Demand has picked up again after the Lunar New Year and
demand has climbed in China as rising incomes and concerns about inflation
lead to store of value buying.
There is also a concern about the Chinese stock market
which has gone sideways since 2001 (see chart) and increasing concerns that
various property markets in China look like bubbles ready to burst.
Consumer demand for gold beat India for the first time
in almost three years in the fourth quarter and China may replace India as
the biggest buyer annually this year.
The massive gold purchases may signal the
People’s Bank of China is continuing to secretly accumulate gold
reserves.
Reuters report that there are suspicions that the
number could include purchases from the public sector, as the market was
largely quiet during a post-Lunar New Year holiday slump in February. "On
the public level, China's central bank will continue to accumulate gold,
which is easier than liberalising their capital
account and currency," said Friesen of SocGen,
adding that building gold reserves would help China's push to turn the renminbi into a global currency.
Accommodative monetary policy will remain an incentive
for private investors to buy into gold, he added.
The nation last made its reserves known more than two
years ago, stating them to be 1,054 tons.
The PBOC’s gold reserves remain small compared to
those of the Federal Reserve and many European nations. Their gold reserves
remain tiny when compared to their massive foreign exchange reserves of $3.2
Trillion.
It is important to note that in past years, Hong Kong
gold imports have accounted for about half of China's total gold imports.
China itself doesn’t publish gold import data and the very high and
increasing demand from Hong Kong is only a component of overall Chinese
demand.
The per capita consumption of 1.3 billion people
continues to increase from a near zero base meaning that this is indeed a
paradigm shift and not a blip or ‘flash in the pan’.
It means that gold will likely see record nominal highs
- possibly before the end of the year.
Prudent western buyers wishing to protect and grow
wealth will again buy gold on the dip as the Chinese are doing.
For breaking news and commentary on financial markets
and gold, follow us on Twitter.
OTHER NEWS
(Bloomberg) -- China’s Feb. Gold Imports From Hong Kong 39,668
Kilograms
Hong Kong government announced Feb. gold exports data on its website.
(Bloomberg) -- Russia’s FinEx
Plus Plans Gold Exchange Traded Product This Year
Asset
Management Co. FinEx Plus LLC plans to start a gold
exchange traded product in Moscow and expand that to other commodities this
year.
FinEx is in negotiations with the Micex-RTS
exchange in Moscow to list the gold product, said Evgeny
Kovalishin, general director. FinEx
is partly owned by Andrei Vavilov, Russia’s
former first deputy finance minister, according to Kovalishin.
(Bloomberg) -- Raw Materials Group Sees Gold Averaging
$1,775 an Ounce in 2012
Gold will
average $1,775 an ounce this year, 13 percent more than in 2011, Raw Materials
Group said in a statement today.
Silver will drop 6.3 percent to an average of $33 an
ounce, platinum 1.1 percent less at $1,700 an ounce and palladium 2.9 percent
lower at $710 an ounce, RMG said.
NEWS
Gold pauses after 4-day rally; investors turn
cautious - Reuters
Gold futures retreat in electronic trading
– MarketWatch
European stocks stage tentative recovery
– Financial Times
Sovereign bonds ‘most overvalued asset’
– Financial Times
COMMENTARY
Was That The Bottom In Gold? – MarketWatch
Price Manipulation in the Gold and Silver Market
- RT
Norcini - Take That Gold Shorts as Massive Bids Shock
Market – King World News
JPM’s TV Appearance - Silverseek
Spain’s crisis exposes limits of ECB help
– Financial Times
Economist’s Bishop On Concerns Re Paper
Currencies and Gold – MSNBC
Mark
O’Byrne
Goldcore
|
