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Gold Price Rebounds as Fed Goes 'Symmetric' on Inflation, Near 4-Month Euro and GBP Highs

May 3, 2018

GOLD PRICES rose against all major currencies on Thursday, rallying above $1315 per ounce in Dollar terms after the US Federal Reserve held its key interest rate unchanged.

Despite manufacturing survey data this week pointing to bottlenecks and cost-price inflation at a 7-year high, the Fed altered key phrases in Wednesday’s policy decision statement, suggesting that new chairman Jerome Powell is willing to tolerate the cost of living rising faster than the central bank’s 2.0% annual target.

Official new economic data today showed US productivity and labor costs rising less than analysts forecast in the January-March quarter.

Betting on the Fed raising a total of 4 times this year eased back this morning according to the CME derivatives exchange, with the heaviest bet – that 2018 will see only 2 more rate hikes after March’s increase – growing above two-in-five of speculative positions.

“With rising interest rates on the one hand, and a sharp spike in stock market volatility on the other, gold investment was mixed” between January and March, said the mining-backed World Gold Council on Thursday, releasing its latest Gold Demand Trends report.

Against steady jewelry and strong central-bank buying, gold investment demand fell 27% from the first quarter of last year, pulling the global total down 7% to its lowest Q1 level since 2008 on the WGC data.

“Gold prices were [also] relatively subdued, [meaning] many investors lacked a clear signal.”

Q1’s weak gold investment demand extended into April, data from BullionVault showed earlier this week.

Chart of total global gold demand, quarterly data. Source: World Gold Council

“On a 12-month basis,” said Wednesday’s US Fed statement, “both overall inflation and inflation for items other than food and energy have moved close to 2%.

“[But] market-based measures of inflation compensation [ie, wages] remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.”

Also re-arranging a series of key words and phrases to stress that the 2.0% target for annual US inflation is “symmetric” rather than a ceiling, “I think the Fed are suggesting they will allow inflation to move higher…[and] won’t overreact to in the near-term,” reckons Cary Leahy at Decision Economics in New York, part of the IHS research and consulting group.

The Fed also dropped a key phrase about “monitoring current conditions closely”. That “essentially admits a soft patch” in US economic growth says Leahy.

Global stock markets fell Thursday morning, extending last night’s lower close on Wall Street, as commodities held flat and major government bond prices rose.

That pushed 10-year US Treasury yields down to 2.93%, ten basis-points below last Wednesday’s 51-month high above the 3% mark and the lowest level in 2 weeks.

Both the Euro and British Pound meantime saw gold prices rise near their highest since mid-January, gaining 0.5% and 0.7% for the week so far respectively at €1098 and £968 per ounce.

Gold Price Rallies Before 'No Fireworks' Fed After PMI Falls, Cost Inflation Rises

May 2, 2018

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GOLD PRICES rallied Wednesday morning ahead of the Federal Reserve’s May meeting on US interest rates, adding 0.5% from yesterday’s drop to within $3 of $1300 per ounce – a level last seen before New Year 2018.

Ahead of the Fed’s decision, latest survey data said Tuesday that US manufacturing activity slowed to a 9-month low in April, while labor and supply shortages worsened and cost inflation jumped yet again.

With the Institute for Supply Management‘s Prices Paid index hitting its highest level since 2011, the ISM’s PMI activity index for April retreated further from early 2018’s near-16 year high.

“Backlogs at a 14-year high, supplier delays rising (bottlenecks) and prices at a 7-year high,” tweeted Gluskin Sheff economist David Rosenberg.

“Capacity constraints are binding.”

Betting on today’s decision by speculative traders now puts the likelihood of “no change” above 94%, with a smaller than 6% chance the Fed will raise.

Betting on June’s decision now sees the very same likelihoods put on rates rising to 2.0% or 2.25% at next month’s meeting, when the Fed will also update its economic forecasts and give a press conference.

Chart of US Dollar gold price vs. effective Fed Funds interest rate. Source: St.Louis Fed

All 6 of the Fed’s rate rises since end-2015 have been coincided with these quarterly updates and press conference.

“Fed speakers have done little to push back against this expectation,” Reuters quotes US investment bank J.P.Morgan economist Michael Feroli.

“We expect no fireworks.”

Gold priced in Dollars rose 61% during the Fed’s 2004-2006 rate-hiking cycle. It has risen 23% since the Fed began the current cycle by finally hiking from zero in December 2015.

Tuesday’s drop in gold prices saw the SPDR Gold Trust (NYSEArca:GLD) – the world’s largest gold-backed investment trust – shrink in size for the first time in a month.

Now needing 5 tonnes less gold as shareholders exited the stock, the GLD had ended last week with 871 tonnes – its largest size since Donald Trump’s shock US election victory in November 2016.

In contrast to the US, UK and Japan, new manufacturing data from the Eurozone today showed activity in the world’s largest single currency zone expanding again in April.

Initial GDP data meantime said the 19-nation Eurozone economy grew as analysts forecast between January and March, expanding by 2.5% to beat both the US and UK but slowing from end-2017’s annual pace of 2.7%.

The Euro held firm on the FX market near yesterday’s 4-month lows versus the Dollar, keeping the gold price for German, French and Italian investors unchanged from the weekend at €1090 per ounce.

The UK gold price in Pounds per ounce meantime touched a new 11-week high at £963.

Gold Price Drops Near 'Key USD 1300 Level' But Firm in EUR and GBP as UK Data Worsen

May 1, 2018

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GOLD PRICES fell to 6-week lows against the Dollar but held firm against other major currencies in London trade Tuesday, extending its recent pattern into the first day of May.

With China and most European financial markets shut for May Day, gold fell 0.4% to $1308 per ounce as the Dollar rose on the currency market.

Sales of new American Eagle gold coins last month fell to their lowest monthly level since before the financial crisis began in 2007, data from the US Mint show.

Interest in gold among larger private investors also fell again, according to data from BullionVault, with the number of both first-time and repeat buyers dropping to the smallest size since gold prices hit their bear-market lows at end-2015.

Dropping 0.8% across last month, gold ended April with its lowest monthly finish of 2018 so far in Dollar terms at $1313.20 per ounce.

Priced in British Pounds in contrast, gold ended April with its highest monthly close since December.

In Euro terms, gold set its highest monthly finish since October.

Chart of gold's performance in USD, EUR and GBP (Dec 2015 = 100). Source: BullionVault via London benchmark

“Support-wise, we are nearing some key technical levels,” says today’s trading note from Swiss refiners MKS Pamp, “with the 200-[day moving average] at $1304 and the psychological $1300 level below that.”

“I remain bearish on gold,” says technical analyst Russell Browne at bullion bank Scotia Mocatta’s New York office, “targeting 1304.30 – the 200 Day MA.”

Those Asian and European stock markets open on Tuesday ticked higher, with London’s FTSE100 index of primarily global corporations adding 0.5% to new 3-month highs.

The British Pound in contrast fell again after worse-than-expected UK economic data, extending its drop from mid-April’s near 2-year highs against the Dollar to 5.0%.

Defeated in the UK’s unelected House of Lords yesterday over a key plank of her 2019 Brexit plans, Prime Minister Theresa May – forced to replace her Interior Minister on Monday in a row over immigration policy – vowed a “robust response” to avoid having to give the elected House of Commons a final say on Britain’s deal with the European Union.

After US data on personal incomes, spending and living costs came in below analyst forecasts for March on Monday, new UK data today showed consumers borrowing much less that month, with a surprise fall in the number of home loans.

Manufacturing activity in the UK last month slipped to its slowest in 17 months according to the Markit agency’s latest PMI survey.

Commodity prices slipped once more on Tuesday, with Brent crude oil again finding a floor near $74.50 per barrel, while major government bonds held little changed.

The theocratic regime in Tehran today called Israel’s Prime Minister Benjamin Netanyahu a “notorious liar” over his claims that Iran has continued and hidden its nuclear research program despite the 2015 deal enabling the No.5 oil-producing nation to re-start exports.

US President Donald Trump must decide by May 12 whether to extend that deal or revoke it, triggering economic and political sanctions against Iran.

UK Trade Secretary Liam Fox today said he welcomes an extension of negotiations around Trump’s tariffs on metals imports into the US, calling it “a breathing space” for the UK‘s small sales of aluminum and steel.

Gold Prices Fall with Oil Despite Iran Threat, Silver 'Near Inflection' as Comex Bears Turn Bull

April 30, 2018

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GOLD and SILVER PRICES fell in London trade Monday, dropping to 6- and 4-week lows respectively against a rising US Dollar as world stock markets edged higher but commodities dropped.

Brent crude oil fell to $73.50 per barrel – some $2 below last week’s 3.5-year highs – after new data showed a jump in US oil drilling but world No.5 oil producer Iran threatened to enrich uranium to a “higher” level than before the 2015 deal suspending its nuclear research if the White House of Donald Trump now quits the agreement.

New data from Germany showed inflation in the world’s 4th largest economy slowing hard in April.

Major government bond prices held firm, nudging longer-term US interest rates down from last week’s 4-year highs at 3.0%.

Gold fell 0.9% to $1312.50 per ounce for US investors while silver prices fell another 1.5% after losing 3.5% last week to trade at $16.26.

Both metals moved less in Euro or British Pound terms however, with gold edged only 0.3% lower against the “commodity currency” Australian Dollar.

“The markets have been quiet today with both China and Japan out for holidays,” said the daily Asian trading note from Swiss refining and finance group MKS Pamp.

“Gold has once again dipped below the 100-[day moving average] and [now broken through] the support level at $1315.

“Below that the psychological $1300 level awaits.”

New data after Friday’s close showed a continued divergence in speculative betting on gold and silver, with derivatives on the cheaper metal last week ending their longest stretch of net negative positioning among hedge funds and other money managers since current records began in 2006.

With silver prices spiking and then losing 3-month highs in US Dollar terms, Comex bears cancelled almost one in every four of their short silver contracts in the week-ending last Tuesday, the fastest cut to the gross short position since New Year.

That group’s bullish betting on silver meantime grew by 15%, pulling the net position into positive territory for the first time in 11 weeks.

Comex gold in contrast saw bullish betting fall last week as bearish bets grew, taking the net long position of Money Managers on gold futures and options down to its lowest of 2018 to date.

https://www.bullionvault.com/gold-guide/gold-futures

Chart of $bn notional value of net bullish gold vs. silver betting on Comex futures and options by the Managed Money category. Source: BullionVault via CFTC

Among the largest bullion-backed trust funds the picture was reversed, with interest in the iShares Silver Trust (NYSEArca:SLV) unchanged at two-month lows last week while the SPDR Gold Trust (NYSEArca:GLD) expanded to its largest size since Donald Trump’s surprise victory in the US election of November 2016.

“With 7 new short traders entering the market,” says weekly analysis of Comex positioning from French investment bank Societe Generale, “the number of traders has now turned net short.”

Silver thus moved over the last 2 weeks from one “mismatch” says SocGen – with net positive betting by the number of traders but net negative by the number of contracts – to another “mismatch”, with a larger number of bearish traders but a net positive number of bullish minus bearish bets overall.

“This move has never happened before…[and marks a] possible inflection point.”

Gold Prices Near 6-Week Dollar Low, 15-Week GBP High on US vs UK GDP and Inflation

April 27, 2018

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GOLD PRICES fell back Friday after new US data showed strong GDP growth but slower inflation, putting the metal on track for its lowest weekly finish in six against the Dollar below $1318 per ounce.

Adjusted for inflation, the world’s largest economy expanded at an annualized pace of 2.3% in the first 3 months of 2018, the Bureau of Economic Analysis said.

Slowing from end-2017’s reading of 2.9%, that real pace of growth in US gross domestic product beat analyst forecasts at 2.0% thanks to a drop in the rate of inflation, which slowed from 2.3% to 2.0% per year.

With gold prices down 1.4% from last Friday, silver also held near this week’s lows, losing 3.5% from last weekend to trade at $16.52 per ounce.

World stock markets followed Wall Street’s gains overnight, with the Stoxx Europe 600 index reaching near 3-month highs.

Crude oil slipped to trade $1 below Tuesday’s new 3-year highs above $75 per barrel of Brent.

Longer-term interest rates also edged back, holding the yield offered by 10-year US Treasury debt 5 basis points below Tuesday’s peak at 3.04% – a high matching end-2013’s then two-year high.

Chart of gold's weekly finish in US Dollars vs. 10-year US Treasury bond yields. Source: St.Louis Fed

“Rising yields tend to weigh on gold prices as they increase the opportunity cost of holding gold,” said this week’s note from specialist analysts Metals Focus.

“It is therefore likely that gold could remain capped in the short-term. However, if inflationary expectations become more entrenched [thanks to rising oil prices], gold could benefit as it starts to act as an inflation hedge.”

In contrast to Dollar-priced bullion on Friday, the UK gold price in British Pounds per ounce jumped to touch £960 – near its highest weekly close since mid-January – as Sterling sank on the currency market following the weakest GDP data since 2012.

Real UK economic output grew just 0.1% between New Year and end-March compared with the previous 3 months, the Office for National Statistics said Friday morning, well below analyst forecasts.

“The Bank of England is [now] more likely than not to sit tight at [its] May meeting,” reckons Howard Archer, chief advisor at economic forecasting group EY Item Club.

That would leave UK interest rates at 0.5% – fully two percentage points below the most recent annual pace of inflation.

“However, we suspect this delay will prove short-lived,” Archer adds, “as the economy shows improvement and the MPC looks to gradually normalize monetary policy.”

After the European Central Bank yesterday held its QE money creation and negative-interest policies unchanged yet again, gold priced in Euros meantime neared its highest Friday finish since late January at €1092 per ounce.

Gold Bullion 'On Back Foot' vs Rising US Dollar But GLD Holdings Near Brexit High

April 25, 2018

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GOLD BULLION fell to 5-week lows against a rising US Dollar in London trade Wednesday, dropping as world stock markets caught up with yesterday’s fall in New York’s stock market.

Ahead of tomorrow’s policy decision from the European Central Bank, the Euro price of gold was unchanged around €1084 per ounce, little moved from one or three months ago.

But slipping to $1320 for US investors as New York opened today, gold traded 1.2% below last week’s finish in Dollar terms.

Silver prices meantime fell more heavily than gold bullion, losing 3.3% for the week so far to hit $16.54 per ounce.

That pushed the Gold/Silver Ratio of the two metals’ relative prices back up towards 80 ounces of silver per 1 ounce of gold.

The highest level for gold vs. silver in a week, that was just below this month’s 2-year highs in the Gold/Silver Ratio.

Gold also held near record highs relative the price of platinum, trading more than $400 per ounce higher than that primarily industrial metal.

“Gold opened on the back foot today,” says Wednesday’s Asian trading note from Swiss refining and finance group MKS Pamp, “with a stronger USD providing some headwind for the metal.”

“Persistent Comex selling [of gold futures and options contracts has] continued the pressure.”

Among investment products, the size of the SPDR Gold Trust (NYSEArca:GLD) was unchanged Tuesday for the 8th day running, needing just less than 866 tonnes of bullion to back the value of its shares in issue.

Now around two-thirds of the GLD’s all-time peak size of late 2012, that was 1 tonne below the exchange-traded gold fund’s largest size since the UK’s shock Brexit referendum result of mid-2016, when Dollar gold prices hit what remains the highest level of the last 4 years at $1375 per ounce.

Chart of SPDR Gold Trust (NYSEArca:GLD) bullion backing. Source: BullionVault via ExchangeTradedGold.com

Interest in the world’s largest silver-backed ETF in contrast – the iShares Silver Trust (NYSEArca:SLV) – held Tuesday at its lowest level since late-February, needing 9,856 tonnes of bullion.

Mexico silver miner Fresnillo (LON:FRES) – the world’s No.1 producer – today said its output grew 14.0% in January-March compared to the same period last year.

That first-quarter increase was in line with Fresnillo’s forecast growth for a second consecutive annual record across 2018 of some 2,000 tonnes.

Gold prices in China – the largest mining, importing and consumer nation – slipped Wednesday to their lowest level against the Yuan since the start of this month.

Relative to Dollar quotes for London settlement, that kept the Shanghai premium around $7.50 per ounce, some 15% below the typical incentive for new bullion imports.

Direct gold imports to the Chinese mainland from global refining center Switzerland fell 40% last month from February says German financial services group Commerzbank, citing Swiss Federal Customs data, but imports through Hong Kong rose sharply.

Dollar gold prices now have “key mid-term supports” from the 100- and 200-day Moving Averages according to a technical analysis from French investment and London bullion market-making bank Societe Generale, pointing “near $1317 and $1308/1300” respectively.

Gold Mining Output -20% in Q1 at No.1 Barrick But Rising Costs Lag Price

April 24, 2018

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GOLD MINING shares rose as the broader stock market rallied Tuesday while the rise in US bond yields paused with 10-year rates just shy of 3%.

Gold bullion prices bounced $5 per ounce from yesterday’s 2-week low, touching $1328 as London opened for business.

That left gold little changed around last Friday’s finish in non-US currency terms as the Dollar joined bond yields and paused its rise of the last week on the FX market.

Silver and platinum kept all of Monday’s 2.7% and 1.0% drops respectively, trading back at $16.65 and $918 per ounce.

Palladium also failed to bounce after sinking over 6% yesterday amid reports that Washington may ease US sanctions over the metal against its No.1 miner, Russia.

The FTSE Gold Mines index meantime edged higher after the world’s largest stockmarket-listed gold miner reported a 5% rise in first-quarter earnings despite a 20% drop in gold ounces mined.

Announcing suspension of a “prefeasibility study” on the Andes mountain project at Pascua-Lama – expected to produce 125 tonnes over its first 5 years but shut since 2013 by environmental orders from the government of Chile – Barrick said its all-in sustaining costs rose 4.1% in January-March from the same period of 2017 to reach $804 per ounce.

Bullion market prices rose 9.0% year-on-year in Q1 to average $1329.

Barrick’s full-year guidance remains for maximum output of 155 tonnes in 2018, a further 6% drop after 2017’s fall of 4%.

Barrick’s output has now shrunk “nearly 40% since its peak of 2006,” according to Reuters, having sold a raft of assets to raise money in 2014-17.

Total debt has meantime halved to $6.4 billion from the peak of 2012-2013, and “Barrick does not intend to sell further assets for the purposes of debt repayment,” the company said Monday.

“Proceeds from any future portfolio optimization will be used to enhance our project pipeline, or returned to shareholders.”

At the top of gold’s bull run in 2012, ABX paid a dividend of 75 cents per share, offering a yield of some 1.6% to that year’s opening price.

Last year it paid 12 cents per share, a yield on 2017’s opening price of 0.5%.

Chart of Barrick Gold Corporation (NYSE:ABX) vs Dollar price of gold, 1985-2018. Source: BullionVault

Barrick’s stock fell 1.8% on Monday, dropping to 1-week lows.

First quarter results are due from No.4 gold miner Goldcorp (NYSE:GG) on Wednesday, No.2 Newmont (NYSE:NEM) on Thursday, and No.3 Anglogold Ashanti (JSE:ANG) in early May.

Data from the world’s largest gold producer nation China last week said its mining output fell 3% in Q1 after falling 6% across 2017 as a whole.

Gold and Silver Fall, Ratio Turns Up as US Bond Yields Rise Near 4-Year High

April 24, 2018

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The GOLD / SILVER RATIO rose from near 2-month lows in London trade on Monday as both metals fell against a rising Dollar after new US data beat analyst forecasts.

With manufacturing activity and sales of existing homes both stronger than Wall Street predicted, world stock markets held flat as falling bond prices saw the yield on 10-year US Treasury debt rise near 4-year highs at 2.98%.

Silver prices erased all of last week’s 2.8% gain by mid-afternoon in London, trading back down at $16.65 as gold fell to 2-week lows of $1323 per ounce.

That pushed up the Gold/Silver Ratio of the two precious metals’ relative prices, with one ounce of gold equal to 79.5 ounces of silver.

“Higher real [interest] rates have not always resulted in negative gold returns,” says analysis from the mining-backed World Gold Council today, pointing to a “waning” correlation between gold prices and bond yields adjusted for inflation expectations, while “the US Dollar is again [becoming] a stronger indicator of the direction of price.”

Chart of gold priced in Dollars vs. real 10-over-10 US bond yields. Source: St.Louis Fed

Based on monthly returns since 1971, the WGC finds that gold prices have risen twice as much during weak Dollar periods than they fell when the Dollar rose, adding 1.5% on average versus a weaker USD but losing only 0.7% against the greenback when it strengthened.

“Weaker USD and [investors] hedging tail risks [are] supportive, but easing geopolitics [make] price risk broadly balanced,” says a precious metals note from analyst Robin Bhar at French investment and London market-making bank Societe Generale.

“More downside than upside potential,” says the SocGen note of gold, silver and platinum, with palladium “the [only] highlight from a range bound complex – buy the dips.”

Net of bearish bets, the position of hedge funds and other money managers on Comex gold futures and options last week grew to the most bullish since end-March.

Rising to the equivalent of 446 tonnes of notional gold, it was one-eighth greater than the ‘Managed Money’s average net speculative long position of the last 10 years.

Betting on silver prices in contrast stayed negative among money managers for the 10th week running, now the longest stretch since current records began in 2006.

Rising again after falling from 2-year highs when silver prices jumped last week, the Gold/Silver Ratio has risen 81% of the time that silver has fallen on a 1-month basis since 1968.

“Gold failed at resistance [around] $1355 and the 100-day moving average might be the first support level at $1328,” said a brief technical analysis from the trading desk of Belgian refinery group Umicore Monday morning.

Silver “[has] found buyers once again below $17,” says a trading note from Swiss refining and finance group MKS Pamp.

“Gold should find support at the April lows around $1321.”

Silver Price Up 3.2% on Week as Trump Turns on Opec, Inflation 'All Over' US Data

April 20, 2018

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GOLD slipped Friday in London but silver prices spiked to 11-week highs as US President Donald Trump berated the Opec oil cartel for “artificially” pushing energy prices up to 4-year highs by discussing new output cuts.

Asian stock markets fell but Europe held flat on the day, keeping the Stoxx Europe 600 Index unchanged from last Friday’s finish.

Silver prices hit $17.35 per ounce, extending their outperformance of gold for a 3.2% weekly gain as New York opened for business.

Gold in contrast slipped to $1341 per ounce, erasing almost half of last week’s $13 gain.

That pushed the Gold/Silver Ratio back down to 78 – the one-month low reached yesterday after gold had traded up to 2-year highs against the cheaper precious metal.

Major government bond prices fell meantime, pushing the interest rate offered by 10-year US Treasury bonds up to 2.92%, just shy of February’s 4-year highs.

“Inflation thumbprints all over the Philly Fed,” says asset manager Gluskin Sheff’s economist David Rosenberg of the latest Philadelphia region manufacturing data.

“The workweek soared to its highest level since October 1987; production bottlenecks too – vendor delays soared to an all-time high! Prices-paid [rate of gain] highest since March 2011. Prices-received jumped to a ten-year high.”

Chart of the Philadelphia Fed's manufacturing current prices-paid index vs. Dollar gold prices. Source: St.Louis Fed

“Looks like OPEC is at it again,” tweeted Trump as the oil cartel met with other producer states in Jeddah, Saudi Arabia to discuss output quotas.

“Oil prices are artificially Very High! No good and will not be accepted!”

Oil on Friday eased back from this week’s 4-year highs at $74 and $69 per barrel of European Brent and US West Texas crude respectively.

Thanks to Opec’s previous quota agreements, “The oil stockpile surplus that’s weighed on prices for three years is all but gone,” says Bloomberg.

“Still, the curbs should continue because another important goal – boosting investment in oil and gas production – remains far out of reach, said Saudi energy minister Khalid Al-Falih.”

Tempering that view, Russia’s energy minister Alexander Novak said today that both Opec and non-member producer countries could start to relax their oil production quotas “as early as this year,” Reuters quotes Moscow’s Tass news agency.

Growth in US shale-oil production meantime “could equal global demand growth” in 2018, the International Energy Agency said in a report earlier this year.

Priced in British Pounds, silver today jumped to 11-week highs above £12.20, offering a 4.6% weekly gain as Sterling extended a fall on the currency markets begun when Bank of England chief Mark Carney told the BBC last night that the UK’s 2019 exit from the European Union “could delay” interest rate rises.

Euro silver prices also rose to 11-week highs, coming within 3 cents of €14 per ounce.

Silver Prices +4% for Week, Gold Ratio Falls as India's Akshaya Tritiya Finds Only 'Token' Buying

April 19, 2018

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SILVER PRICES extended their sharp rally in London trade Thursday, reaching new 11-week highs for US investors at $17.30 per ounce while gold edged back from an overnight rise.

Tokyo and Shanghai’s stock markets closed the day higher, but other major equity markets held flat as base metals and crude oil pushed the CRB Commodities Index up to its highest level since late 2015.

Silver held 4.0% higher for the week so far as New York opened for business, while gold at $1348 was barely changed from last Friday.

That pushed down the Gold/Silver Ratio of the two metals’ relative prices to its lowest level since 30 January, with one ounce of gold equal to 77.9 ounces of silver.

The ratio has averaged 71.0 over the last 5 years, rising to 2-year highs near 82 this spring as hedge funds bet heavily on silver falling.

Chart of Gold/Silver Ratio, daily since 1968. Source: BullionVault via LBMA

Over in China overnight, and with Dollar gold prices trading at their highest level around Shanghai’s daily benchmarking auction since late-March’s sharp rise in US-China ‘trade’ war tensions, the Yuan price of bullion held unchanged on the day.

That cut the premium for gold landed in the world No.1 consumer nation one-third below the average incentive for new imports out of London – heart of the world’s wholesale bullion trade.

Gold prices in India also stayed soft on Thursday, with wholesale bars trading at a $0.75 per ounce discount to London quotes after accounting for the No.2 consumer nation’s 10% import duty.

Indian households made only “token” purchases of gold and silver for the Hindu festival of Akshaya Tritiya yesterday, Business Today reports.

“Consumers want to make purchases for Akshaya Tritiya,” Reuters quotes one Hyderabad retailer, “but they are not comfortable with the current price.

“They are making smaller purchases.”

Besides the 4% rise in Rupee gold prices so far this year, dealers also blamed the festival’s lackluster sales on a shortage of bank notes – denied by the Finance Ministry but met with extra note printing by the Reserve Bank of India.

After China reported solid 6.8% economic growth for the first quarter, led by consumer spending, “With the growth of high-end consumption and the development in second- and third-tier cities, the Chinese gold market will show substantial demand,” said China Gold Association director Song Xin last week

“[It’s] mostly unexplored for physical gold. More and more people [will] start to realize gold’s stored and retaining values in the long term.”

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