|
|
London
Gold Market Report
THE
PRICE OF WHOLESALE gold bullion rose for the fifth day running against the US Dollar early
Wednesday in London, touching the best level in 4 weeks at $1127 an ounce and
breaking new record highs for Euro investors above €820.
Global stock markets also rose once again, with London's FTSE100 now
recovering half of the last month's 9% drop.
The Euro erased a little of Tuesday's sharp bounce vs. the Dollar, but US
Treasury bonds continued to tick lower after new data showed the Chinese
government selling a record amount of Washington's debt in Dec.
Import-price inflation in the United States jumped to a 15-month high of
11.5% in Jan., the Labor Dept. said.
Crude oil today rose above $77.50 per barrel.
"Gold has pushed through its 50 and 100 day moving averages," notes
one London dealer, "and also broke above an important [down]
trendline" starting at the record peak of early Dec.
"We believe that Western Gold Investment demand will remain well
underpinned," says the mining-financed World Gold Council in its latest
analysis, "regardless of whether the economic recovery gathers momentum
or stumbles in 2010.
"If the global economy falters," the WGC says in its latest Gold
Demand Trends report, "then Western investors will continue to look
towards gold for its diversification and portfolio insurance properties.
"Conversely, if the economic recovery becomes more firmly entrenched,
then inflation concerns are likely to continue to gain prominence."
New UK data today showed average earnings lagging the 14-month high in
consumer-price inflation reported Tuesday.
Thursday and Friday will bring a raft of price-inflation data from the United
States and 16-nation Eurozone.
New York's SPDR Gold Trust – the world's largest Gold ETF –
yesterday added 3 tonnes to the 1106 tonnes of gold it stores at HSBC bank in
London, held to back the value of its stock-market shares.
The first rise in trust-fund holdings since mid-Dec., that addition took the
SPDR's stockpile within 2.5% of New Year's record level.
London's GBS gold fund kept its holdings unchanged Tuesday after shedding 4
tonnes to 120 tonnes over the previous three weeks.
It peaked at 137 tonnes last June.
"The outlook for non-Western demand remains price dependent," the
World Gold Council goes on, noting that – overall – identifiable
gold demand fell 11% last year from 2008, dropping to 3386 tonnes worldwide.
The lowest global demand since 2003 by volume, that very nearly matched
2008's record gold-demand by value as the US-Dollar Gold Price averaged a 12%
rise.
On the other side of the commodity trade, "Gold supply in 2009 was up
11% on the levels of 2008," says the WGC report, based on data from
London's GFMS consultancy.
The "single biggest contributor" to support – whether through
new Western companies such as Cash4Gold or via more traditional Asian
cash-raising – was "recycling" by existing private
gold-owners selling their metal. It added a massive 1549 tonnes of gold to
global supply in 2009, according to GFMS's latest estimate.
Recycling in 2009 rose 27% from 2008 and was larger by almost two-thirds from
2007.
"There was some selling back of gold jewelry by retailers," the WGC
says of Oct-Dec.'s 3% rise over the last quarter of 2008. "The Middle
East was the biggest contributor to the Q4 increase."
In Dubai this month, the current Dubai Shopping Festival – a twice-annual
event organized by the emirate's Department of Economic Development –
has seen "subdued" sales and footfall reports JewelleryOutlook.com.
Dubai's Gold & Jewelry Group, which represents over 700 gold retailers,
decided not to take part after disappointing sales at the previous event.
"We have seen fewer tourists," the website quotes Joseph Ullas, a
manager at one Joyalukkas store in the downtown gold souk.
"However, we are still seeing good business from Indians, especially
those seeking diamond jewelry."
Adrian
Ash
Head of Research
Bullionvault.com
Receive
your first gram of Gold free by opening an account with Bullion Vault : Click
here.
City correspondent
for The Daily Reckoning in London, Adrian Ash is head of research at BullionVault.com –
giving you direct access to investment gold, vaulted in Zurich, on $3 spreads
and 0.8% dealing fees.
Please Note: This
article is to inform your thinking, not lead it. Only you can decide the best
place for your money, and any decision you make will put your money at risk.
Information or data included here may have already been overtaken by events
– and must be verified elsewhere – should you choose to act on it.
|
|
