This completely contradicts what was just reported earlier this week. India / China Gold Markets Moving In Opposite Directions shows how both China and India’s gold markets are being impacted by the house arrest and the Wuhan coronavirus.
China, which shows the whole of the country is somehow not being impacted by the Wuhan bat-stew flu even though it first came to life in China! hmmmm,,,This leaves the gold markets to continue doing their thing and with people the world over concerned about a global economic collapse, gold is selling, well, like gold should be selling right now – like it is precious, rare and valuable.
Meanwhile in China we see the exact opposite taking place. Physical gold demand was higher, but below demand for the same time in 2019. If you look at the chart you will see there was a distinct downward trend that broke just before coronavirus shut everything down.
Au(T+D) trading volumes in March set a new record, reaching 3,935 tonnes at an average of $9 billion per day, its highest ever level. Safe haven demand amid sell-offs in Chinese stock and commodity markets following covid-19 outbreak globally was the main contributor fueling the high trading volumes, the Council said.
Au9999 trading volumes – usually seen as a proxy for physical gold demand in general – and gold withdrawals from Shanghai Gold Exchange (SGE) both saw notable rebounds in March as most Chinese companies resumed operations.
The Council noted that despite the elevated trading activities, these figures are still below the levels seen in 2019.
The above clearly reflects what is happening, in the physical gold markets, around the world. It all began in earnest in March and has accelerated in April.
Now, Reuters comes out and starts with their double speak. In the first part of this article, that we presume has been bouncing around the globe through their wire service and paints a picture of a downtrend in physical gold markets while the fact of the matter is the exact opposite. You don’t learn that until get further along into the article.
The article begins by telling you how bad gold sales have become during the bat-stew flu season…
Physical gold demand in China continued to be in the doldrums this week as the coronavirus-led restrictions stalled activity, with dealers in the top consumer offering massive discounts.
Traders and dealers quoted massive discounts of about $50 to $70 over benchmark spot prices in China, the biggest on record as per data going back till 2014.
“In the short-term, until the coronavirus disappears, I don’t see any physical demand in China,” said Peter Fung, head of dealing at Wing Fung Precious Metals.
Spot gold prices traded between $1,672.69 and $1,746.50 an ounce this week, a peak since 2012. Source
After painting this detailed ugly picture of how terrible gold sales have been they turn the picture upside down and tell the truth of what is actually happening and how people are in fact “storming the gates” to get their hands on physical gold to protect their wealth.
“Bullion sales remain very high as clients scramble to protect their wealth in physical gold and silver amidst the crisis in the real economy,” said Vincent Tie, sales manager at Silver Bullion, adding customers were opting for online purchases.
Singapore’s annual exports growth accelerated in March, driven by a jump in shipments of pharmaceuticals and gold. Source
The article then concludes, and confirms, that India’s gold sales have in fact fallen off a cliff. India is primarily a farming nation and doesn’t have a lot of technology to support massive online bullion sales.
India’s gold consumption in 2020 could fall as much as 50 percent from last year as the lockdown has closed jewelry stores during key festival and wedding seasons. Source
For those of you that like to gamble – place your bet now – look for this situation to change in a big way as soon as the house arrest are lifted and people begin to address the lack of interconnectedness all across the rural landscape of India. Someone or a group of someones, will address this situation one way or another by and for the people India. While smuggling has a massive impact on the gold market in India it seems that something is going to have to change in order for people to avoid this type of “lockdown” in the future. I don’t think smuggling will do the trick.
