New Year 2019 Gold Price Surge 'Astonishing' as GLD Expands Fastest in 16 Months

GOLD PRICES rose yet again in all major currencies bar the Japanese Yen on Thursday, extending New Year 2019’s gains to new all-time record highs against the Australian Dollar as Asian trading saw fresh turmoil in currency and equity markets.
 
The UK gold price in Pounds per ounce touched £1032 when Asian trade began, slipping back £10 in London hours, while gold priced in Euros touched €1033, some 12.0% higher from September’s 32-month low.
 
Gold priced in US Dollars meantime edged above $1290 for the first time since June as commodity prices hit new 18-month lows on Bloomberg’s index of natural resources.
 
Major government bond prices also jumped, pushing yields down once more to erase the last of 2018’s rise in longer-term interest rates for US, UK and Eurozone investors.
 
Termed a dash into “safe havens” by traders and analysts, the overnight turmoil in Asia also saw Yen gold prices spike down to 3-month lows as the Japanese currency leapt despite last month’s news that the world’s third largest economy shrank 2.5% annualized in the July to September period of 2018.
 
Chart of gold priced in Japanese Yen. Source: BullionVault
“Liquidity was non-existent on the move,” says a trading note from Swiss refining and finance group MKS Pamp, “with spreads [between buy and sell prices in Australian Dollars and Japanese Yen] blowing out to over a big figure for about 10 minutes.
 
“Given the rapid fall in the AUD…[gold in Aussie Dollars] opened an astonishing A$35 higher at $1875 and continued to push toward $1880.
 
“Australian [mining] producers were slow to realise,” MKS goes on, pointing to the world’s second-largest gold miner nation, “but have since been seen consistently on the offer, taking advantage of the very bullish move” to sell metal and lock in these record-high AUD gold prices.
 
Prices for producers in No.5 gold miner Canada also rose steeply, spiking to the highest since November 2017 at C$1760.
 
Chinese gold prices meantime hit their highest since April 2017 overnight Thursday, rising 10.0% in Yuan terms from last August’s multi-month lows and fixing in Shanghai at the equivalent of $1300 per ounce at today’s afternoon benchmarking auction.
 
Coming after new factory data said manufacturing activity in the world’s 2nd largest economy shrank for the first time in 19 months in December on falling export and domestic orders, that put Shanghai gold prices more than $11 per ounce above London quotes.
 
That extended the last week’s run of seasonally strong incentives for new gold imports to the metal’s No.1 consumer nation ahead of the Chinese New Year, starting the Year of the Pig on 5 February.
 
Chart of Shanghai gold price in Yuan per gram. Source: SGE
 
“My feeling is that the market is virtually positioned for a mild recession, but I just don’t think that it’s going to happen,” said Wharton professor Jeremy Siegel to MarketWatch of the US equity slump on Wednesday.
 
“If we avoid a recession, we’re going to have a really good market…I think we swung too positive last summer and now I think we’ve swung too negative.”
 
Wednesday saw the giant SPDR Gold Trust (NYSEArca: GLD) expand by 1.0% as investor demand outpaced selling of the world’s largest gold-backed ETF trust fund.
 
Growing to need 795 tonnes of bullion backing, the size of the GLD now shows a 4-week correlation with the Dollar gold price of +0.92, the most positive reading in 5 months.
 
That figure would read +1.0 if gold and the GLD’s size moved perfectly together.
 
Since Christmas Day the GLD has now grown by 21.2 tonnes, the heaviest 5-session inflow since September 2017.
 
Platinum again held little changed Thursday, trading below $800 per ounce, but silver tracked gold prices higher, touching 6-month highs at $15.62 per ounce.
 
Priced in US Dollars, silver moved in the same direction as gold prices for the 9th time in the last 10 years in 2018.
 
But while gold slipped 1.1% across last year to finish at $1281 in London’s wholesale bullion market, silver prices fell 8.3% to finish at $15.46 per ounce.

Disclaimer

This publication is for education purposes only and should not be considered either general of personal advice. It does not consider any particular person’s investment objectives, financial situation or needs. Accordingly, no recommendation (expressed or implied) or other information contained in this report should be acted upon without the appropriateness of that information having regard to those factors. You should assess whether or not the information contained herein is appropriate to your individual financial circumstances and goals before making an investment decision, or seek the help the of a licensed financial adviser. Performance is historical, performance may vary, past performance is not necessarily indicative of future performance. This report was produced in conjunction with ABC Bullion NSW.

Contact Us

Adelaide Store

Mezzanine Level
20 King William Street
Adelaide SA 5000
08 8223 2444
08 8231 5420
9:30am to 4:00pm (Mon. - Fri.)

Brisbane Store

Level 2
17-19 Mt. Gravatt-Capalaba Road
Upper Mt. Gravatt QLD 4122
07 3349 7965
07 3420 3764
10:00am to 4:00pm (Mon. - Fri.)