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Gold Bullion Nears 4-Week Friday Low as 'No Way Currency' Bitcoin Rallies, Turkey-US Tensions Worsen

December 2, 2017
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GOLD BULLION prices gave back a rally against the US Dollar on Friday to head for their lowest weekly close in four as European stock markets retreated, relations between Turkey and Nato ally the US worsened again, and Bitcoin rallied 6% below this week’s new all-time record high.
 
Falling back to $1273 per ounce at lunchtime in London, wholesale gold bullion bars began December 10% higher for 2017 to date against the Dollar, but was lower from New Year for Eurozone investors and flat in terms of the British Pound.
 
Rising over 10-fold for 2017 to date in contrast, crypto-currency Bitcoin — widely called “digital gold” by pundits and headline writers — rose to $10,500 as derivatives exchange the CME Group said it has received regulatory approval for Bitcoin futures contracts to launch on 18 December.
 
Sales of gold and silver bullion coins by the US Mint have in contrast totalled the lowest in 10 years, before the financial crisis exploded, so far in 2017 according to data compiled by Reuters.
 
“We need to be clear,” said French central bank chief François Villeroy de Galhau today, speaking in Beijing.
 
“Bitcoin is in no way a currency, or even a cryptocurrency. It is a speculative asset. Its value and extreme volatility have no economic basis, and they are nobody’s responsibility.”
 
Adding that the Banque of France itself is “experimenting with [the] innovative technology” of blockchain and distributed ledger record-keeping, “We have also noted with interest the measures taken by the Chinese authorities regarding ICOs,” said villeroy de Galhau, referring to Beijing’s September ban on what it called “illegal and disruptive” initial coin offerings of other digital tokens.
 
After new data yesterday put US economic growth at its strongest pace in 3 years, manufacturing surveys today said business at European factories is expanding the fastest since 2000.
 
Gold prices for Eurozone investors fell to new 3-month lows beneath EUR 1070 per ounce.
 
The gold price in Pounds per ounce meantime headed for its lowest Friday finish since mid-July at £945, as the Markit data agency’s UK PMI survey put manufacturing activity at a 4-year high.
 
Chart of UK gold price in Pounds per ounce. Source: BullionVault
 
Hong Kong’s stock market fell for the fifth session running, trading over 3% below last week’s new 10-year high.
 
Commodities meantime ticked higher as crude oil rallied towards last month’s 2-year highs following confirmation of a 2018 output cap by producer-nation cartel Opec together with Russia.
 
Over in New York, Iranian-Turkish gold trader Zarrab yesterday implicated Turkey’s president, Recep Tayyip Erdoğan, in evidence against bank executive Mehmet Hakan Atilla over sanction-busting cash transfers to Iran.
 
Avoiding prosecution himself by pleading guilty and co-operating with the US authorities, Zarrab said Turkey’s former economic minister Zafer Caglayan — whom he claims to have bribed — told him that Erdogan had approved payments to Iran by two Turkish banks in 2013.
 
Cut off by Western sanctions over its nuclear program, Iran allegedly used money paid into Atilla’s Halkbank to buy gold bullion, smuggle it to Dubai, and then sell it for cash.
 
Erdogan’s team last week said Zarrab was being held “hostage” by the US in a politically-motivated case.
 
Today the Public Prosecutor in Istanbul today issued an arrest warrant for former CIA vice-chairman Graham Fuller, claiming he was involved in July 2016’s failed coup attempt in Turkey.
 
Accused along with US academic Henri Barkey of “attempting to overthrow the government” of Turkey, Fuller supported the 2006 immigration to America of Turkish cleric Fethullah Gülen — blamed by Ankara as the mastermind of last year’s coup attempt — and last month named as part of the plot by Russian political strategist and philosopher Alexander Dugin.
 
Nicknamed “Putin’s brain” for his reported sway over the Russian president, Dugin said Moscow has “concrete evidence that CIA agents commanded the failed coup attempt.”
 
Tensions between the US and fellow Nato military treaty member Turkey – the world’s No.5 gold bullion consumer – have risen sharply in recent months over policy towards the Assad regime in Syria and also Ankara’s purchase of a new missile system from Russia.

Bullion Down, Gold Mining Stocks Up as Opec Extends Oil Cap, Bitcoin Whips 17% Below New Peak

December 1, 2017
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BULLION PRICES slipped again but gold mining shares rose Thursday in London as Asian stock markets followed Wall Street lower but Eurozone equities rose.
 
Crypto-currency Bitcoin jumped and slumped again, retouching yesterday’s low of $9,300 to trade 17% below Wednesday’s fresh all-time record above $11,300.
 
Gold fell 1.7% from Monday’s attempt at 6-week highs of $1300 per ounce, trading down at $1278 as silver fell over twice as hard, down to 8-week lows at $16.44.
 
Platinum prices held firm again, unchanged from last week’s finish at $941 per ounce.
 
Crude oil rose meantime towards this month’s 2.5-year highs at $64 per barrel of Brent after the Opec cartel of major producers, meeting in Vienna, said they’re ready to extend a cap on output to the end of 2018.
 
Major government bond prices edged lower with gold, nudging 10-year US Treasury yields up to 2-week highs at 2.39%.
 
But South African and London-listed gold miners added 0.5% as a group for the day by lunchtime, as Harmony (JSE:HAR) jumped 2.3% following the re-start of work at its Hidden Valley project in Papua New Guinea two weeks ahead of schedule.
 
The UK gold price in Pounds per ounce fell to its lowest level since mid-July at £950, down over 8% from start-September’s 10-month highs above £1000.
 
Euro priced gold meantime fell back near its cheapest level since early August at EUR 1081 per ounce.
 
Gold priced in Australian Dollars meantime erased this week’s earlier 1.1% gain, but held within 9% of mid-2016’s return to the all-time record highs of mid-2011.
 
Chart of spot gold prices in Australian Dollars, last 20 years. Source: BullionVault
 
With the Australian Dollar falling over 30% against the US Dollar since 2011, gold mining costs in the world’s No.2 producer have fallen sharply compared to other countries’, with annual output rising by more than one-tenth.
 
Over the first half of this year Australia’s average mining costs rose 3% per ounce, driven mostly by a rally in the AUD’s exchange rate according to specialist analysts Thomson Reuters GFMS, but its total “all in sustaining costs” still held below the global average.
 
Today the ASX stock exchange in Sydney opened trading in Canada-based Kirkland Lake Gold (TSX:KL), now operating a quarter-million ounce mine in the east of Australia and one of 25 listed companies exploring the nugget-rich edge of the western Pilbara region.
 
“In the past year,” says Mining Weekly, “a record 1,896 gold prospecting licenses were granted by the Western Australia Department of Mines,” mostly to individual prospectors using metal detectors.
 
“The Pilbara will be the next big thing or we’ll be looking back in 12 months saying, ‘Oh, that was interesting and that’s all’,” says Joe Treacy of Australian gold explorer Marindi Metals.
 
Currently trading 94% below its share-price peak of start 2011, Marindi reports finding 63 nuggets of gold in Pilbara this month, “the biggest a 6mm nugget” says Mining Weekly.
 
Contrary to other forecasts of gently declining gold mine output worldwide, consultants BMI Research now forecast annual average growth of 2.3% over the next decade, a “slight deceleration [from] the previous eight-year average of 3.1%.”
 
BMI expects the growth to come from mining companies in China — now the No.1 producer since 2007 — as they buy and expand new projects overseas in a bid to meet the country’s growing consumer demand for the metal.

Strongest US GDP in 2 Years Erases Week's Gold Price Gains, Platinum 'Oversold' Says HSBC

November 30, 2017
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GOLD PRICES dropped on Wednesday as new data said the US economy expanded 3.3% per year between July and September, its fastest pace since 2014.
 
Falling from its 6th attempt above $1296 so far this week, the gold price lost $10 per ounce against a rising US Dollar while silver and platinum fell sharper still.
 
Broader commodity prices slipped for the second day running as major government bond prices fell, edging the yield offered by 10-year US Treasury debt up to 1-week highs above 2.35%.
 
North Korea’s overnight missile test — reported by the dictatorship of Kim Jong-un as proving Pyongyang could hit anywhere in the United States with a nuclear weapon — saw US President Donald Trump vow to “take care of it.”
 
But the test “appeared calculated to avoid crossing red lines that could provoke military action by Washington,” according to the Wall Street Journal.
 
With gold prices erasing this week’s previous 0.9% gain to the Dollar, silver fell twice as hard, hitting new November lows at $16.71 per ounce.
 
Platinum held firmer, fixing at its highest price since mid-September at London’s AM benchmarking before halving this week’s gain so far to 0.4% at $942.
 
“We regard platinum as being oversold and look for a recovery in prices,” says a note from global investment and London bullion clearing bank HSBC.
 
“Concerns of loss of market share in the auto sector, while valid, may be exaggerated,” says the note. 
 
“[Other] supportive factors, such as limited supply and a potential for increased investment [and] jewelry demand…have yet to buoy the market. Low prices have crimped mine investment.”
 
Chart of US Dollar platinum price. Source: BullionVault
 
South Africa’s Public Investment Corporation — which runs $150 billion of assets for state-employee pensions — today asked for two seats on the board of troubled platinum miner Lonmin (LSE:LON), raising what it called “urgent” concerns over the firm’s leadership and challenges.
 
Also asking Lonmin to move its main stockmarket listing to Johannesburg from London, PIC owns some 30% of the world’s No.3 platinum miner after stepping in when a 2015 rights issue failed to find enough private investment.
 
Non-profit organization the Mining Forum of South Africa this week called on the government to suspend Lonmin’s operations over what it calls the miner’s failure to comply with social and labour plans such as building 5,500 houses for employees planned in 2006.
 
Major stock markets meantime rose everywhere on Wednesday except China and the UK, where the FTSE-100 index fell as the Pound surged on the forex market on news of Britain doubling its “divorce payment” offer to the European Union.
 
With no official statement on the size of the deal  — reported at EUR 55 billion by the BBC — UK foreign secretary Boris Johnson called it a “fair offer” intended “to get the whole ship [of Brexit negotiations] off the rocks.”
 
New survey data today put economic confidence across the 19-nation single Euro currency zone at a 17-year high, rising for the 6th month in a row.
 
Versus the Dollar however, the Euro fell further from Monday’s 2-month highs, despite yesterday’s US report of the worst trade deficit on goods for more than 2 years.
 
Meanwhile in Turkey — the world’s No.5 gold consumer nation, where bullion prices have hit record highs on a plunge in the Lira — the prime minister today called opposition claims that President Recep Tayyip Erdoğan paid millions of dollars to offshore banks accounts “lies”.
 
Next week’s New York trial of Turkish-Iranian gold trader Reza Zarrab — accused of breaching sanctions against Tehran — may now be suspended after he pleaded guilty and turned witness for the prosecution of Turkish banker Mehmet Hakan Atilla over the same  multi-billion dollar allegations.
 
Zarrab is expected to testify later today, reports the New York Times.

Gold Price Tries $1300 Again as Betting on Fed Rate Shock Grows, Bitcoin Triples in 3 Months

November 29, 2017
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GOLD PRICES held in a tight $5 per ounce range on Tuesday morning in London as major government bond prices rose, nudging interest rates lower, ahead of key US data and central-bank testimony.
 
Holding within 0.4% of what would be a 6-week high at $1300 per ounce, Dollar gold prices extended their longest run of a tight trading range since the start of 2016.
 
With Jerome Powell, Donald Trump’s nominee to head the Federal Reserve, speaking to Congress later today, European stock markets shrugged off yesterday’s drop on Wall Street and overnight fall in Asian equities.
 
Wednesday then brings Q3 GDP figures from the US, and “barring any major downside surprises this should bring cheer to US equities, industrial commodities and expectations of rate hikes,” writes Japanese conglomerate Mitsubishi’s precious metals strategist Jonathan Butler.
 
“All of that could negatively impact investor sentiment towards gold,” Butler says, warning that the Fed may raise interest rates more aggressively in 2018 because the cost of borrowing has been “kept low for too long amid subdued inflation…stoking up trouble for global financial markets in future.”
 
Betting on US Fed interest rates now sees zero chance of “no change” at the central bank’s mid-December meeting, with a near 93% certainty of a 0.25 percentage point rise to a ceiling of 1.50%.
 
The other 7% of bets now predict a half-point hike to 1.75% in the Fed Funds rate, according to data from the CME Group‘s FedWatch tool, up from just a 2% chance this time a month ago.
 
The heaviest betting on Fed rates 1 year from now, however, sees just one further hike after December.
 
Having come within $1 of $1300 per ounce at the start of US trade on Monday, the price to buy wholesale gold bars dipped below $1293 in Asian trade Tuesday, recovering to $1296 in London.
 
“Gold has been showing accumulation above the 200-day moving average,” says the latest technical analysis from French investment bank Societe Generale.
 
The 200-dma now comes in at $1263 per ounce.
 
But pointing to a potentially bullish pattern marked by the two gold price lows around that same level in October, “a break above $1298 is essential to affirm a retest of the neckline of [that] double bottom,” says SocGen.
 
Chart of Dollar gold price, last month. Source: BullionVault
 
“Major central banks such as the Fed, ECB and BoJ have created over $6 trillion of surplus liquidity since the financial crisis,” notes FX strategist Steven Barrow at Chinese-owned investment and bullion bank ICBC Standard today.
 
“In our view this liquidity build-up…even if it has helped to smooth the post-crisis economy…has led to a number of risks [which] include imploding asset prices, rising inflation and even an increase in the challenge from alternative monies, such as Bitcoin.”
 
Almost tripling in US Dollar terms over the last 3 month, so-called crypto-currency Bitcoin today touched $9,924 before retreating 1.3% from that fresh all-time record.
 
Asset managers GMO – now running $77bn of client assets – have cut their 7-year forecasts for all investment class returns, reports the UK’s Investment Week today.
 
Looking ahead to 2025, GMO now reckons that stocks in large US corporations “will fall 4.4% on an annual basis,” says the magazine, “compared to a forecast of -3.1% made in Q4 2016.”
 
Over the 12 months to 31 October, US large caps returned 23.3% according to index compilers MSCI.
 
Gold priced in other major currencies meantime edged higher on Tuesday as the Euro and Pound eased back versus the Dollar on the FX market ahead of Powell’s testimony and the Q3 US GDP data.

Gold Buying Price Near $1300 on 'Cyber Monday' as Dollar Hits 2-Month Low, 'Fraud Bubble' Bitcoin Jumps

November 28, 2017
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GOLD BUYING grew on Monday morning as Asian stocks resumed their decline and the US Dollar dropped to a 2-month low ahead of tomorrow’s key US Congressional hearing on Donald Trump’s choice of Jerome Powell to replace Janet Yellen as head of the Federal Reserve, writes Steffen Grosshauser at BullionVault.
 
With US consumers expected to keep shopping as Wall Street traders returned to work on ‘Cyber Monday’, the Dollar fell on the FX market to 2-month lows against the single Euro currency as new data showed strong business confidence in Germany.
 
With 1 Euro buying almost $1.20 this morning, Chancellor Angela Merkel’s Conservative Party also agreed to pursue a “grand coalition” with the Social Democrats to break the political deadlock in Europe’s biggest economy.
 
Prices to buy gold with US Dollars climbed $10 from last week’s close at $1288 per ounce, rising above what analysts called “resistance” at mid-November’s prior peak of $1296.
 
“The inverse relationship between the Dollar and gold prices is in effect,” says research chief Mark To at Wing Fung Financial Group in Hong Kong.
 
“But I don’t think that kind of relationship is robust enough to wager larger bets…While prices are moving up, movement will still be range bound.”   
 
Gold buying prices at the daily London benchmarking auction have traded in a $37 range for the last 6 weeks, the tightest range since the start of 2016 and tighter than all but 3 periods of the last 10 years.
 
Chart of Dollar gold prices showing tightest 6-week ranges of last decade. Source: BullionVault via St.Louis Fed via LBMA
 
Investors on Monday were meantime looking towards tomorrow’s Congressional hearing of the US Fed chair nominee Jerome Powell.
 
The current incumbent, Janet Yellen will testify to lawmakers on the economy on the following day.
 
US President Donald Trump is also scheduled to speak Tuesday, this time to Senate Republicans about his planned US tax reforms.
 
“We expect gold prices to trade sideways,” reckons broking firm Angel Commodities in Mumbai, “as the expectations of the [US Dollar] rate hike seems to have been delayed on account of the spate of poor economic data.”
 
Although a rate hike at the Fed’s next policy meeting on 12-13 December is widely considered as certain, some policymakers expressed concerns over further action in 2018 at the November meeting.
 
Cryptocurrency Bitcoin meanwhile surged to a new record high of $9600 on Monday after already breaking its previous record during the Thanksgiving weekend.
 
According to a recent CNBC poll, 27.9% of chief financial officers surveyed thought that Bitcoin was “real but in a bubble” while the exact same proportion considered it a “fraud”.
 
Only 14% of the survey’s 43 participants thought Bitcoin was “real and going higher”.

Gold Bullion 'Beefs Up Security' Says Russia as Turkey-Iran Gold Trading Trial Hits US Relations

November 25, 2017
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GOLD BULLION slipped against a falling US Dollar on Friday, heading for a 0.3% weekly drop as the US Thanksgiving holidays left world stockmarkets to edge higher and diplomatic tensions worsened further between Turkey and Washington.
 
With the Dollar dropping again on the FX market, gold trading in London – center of the global wholesale market – saw the metal drop hard against all other major Western currencies.
 
Priced in the Euro, gold bullion fell to EUR 1083 per ounce, its lowest weekly close since the start of October.
 
Gold bullion rose for investors however in Turkey – the world’s 5th largest private gold consumer, and a heavy central-bank buyer – as the Lira re-touched this week’s fresh all-time record lows versus the Dollar.
 
New York court hearings are now scheduled to begin on 4 December against Iranian-Turkish gold trader Reza Zarrab for breaking international sanctions over Tehran’s nuclear program.
 
Nato member Turkey’s deputy prime minister Bekir Bozdağ this week described Zarrab as a “hostage”, and the trial – which threatens to implicate senior Turkish figures – “looks like a ticking time bomb at the heart of Turkey-US relations,” says one editorial in the Hurriyet newspaper today.
 
Ankara is now suing US-resident cleric Fethullah Gulen for damage caused in last year’s attempted coup after failing to have him deported.
 
Following this week’s summit with the leaders of Russia and Iran, Turkey’s President Recep Tayyip Erdoğan meantime repeated today that there is “no place” in war-torn Syria’s future for what he called the “terrorist” YPG party of Kurdish separatists – a group supported by the United States in its fight against Islamist extremists ISIS, but which Ankara sees as an arm of eastern Turkey’s rebel Kurdish group the PKK.
 
US President Trump tweeted overnight that he will call Erdoğan today. But amid the continuing row over a Nato military drill in Norway labelling images of the Turkish president and also its founding father Mustafa Kemal Atatürk as “enemy collaborators”, there is “increased rumbling,” says another Hurriyet editorial, “that Ankara’s true interests lie in deepening relations with Russia and Eurasia instead.”
 
Russia has quadrupled its national gold bullion reserves over the last decade “to beef up national security,” according to a Reuters report of comments from central bank First Deputy Governor Sergei Shvetsov today.
 
Since the turn of this century, the combined national gold reserves reported by Turkey, Russia and China have more than quadrupled according to data compiled by the mining-backed World Gold Council to more than 4,000 tonnes today.
 
The gold bullion reserves of Western allies the US, the UK and the Eurozone member states are nearly 5 times as large, but have shrunk by 10% since the start of 2000.
 
Chart of combined 'Western' gold reserves vs. China + Russia + Turkey. Source: BullionVault via World Gold Council
 
Mooting an ‘alternative’ gold trading venue from the existing Western-led market, Shvetsov also said that “The traditional system based in London and partially in Swiss cities is becoming less relevant as new trade hubs are emerging, first of all in India, China and South Africa.
 
Saying that Moscow and Beijing have signed a memorandum of intent regarding bilateral gold trading, “We are discussing the possibility to establish a single gold trade [system] both within the BRICS, and at the level of bilateral contacts,” potentially leading to the launch of new pricing benchmarks.
 
The term ‘BRICS’ – referring to the highly diverse nations of Brazil, Russia, India, China and South Africa – was coined by US investment bank economist Jim O’Neill in 2001 as a marketing tool for selling emerging-economy investments to Western money managers.
 
With sales of Russian-mined gold curbed by Western sanctions over the 2014 annexation of Crimea – a move linked by analysts to Moscow’s surge in gold bullion buying – gold-trading bank  VTB Capital said this week it plans to double sales of bullion to China in 2018.

Gold Bullion Recovers vs. Weak Post-Fed Dollar as Bitcoin and Blockchain Grab Headlines

November 24, 2017
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GOLD BULLION regained the last of this week’s prior 1.3% loss against a weakening US Dollar in London trade Thursday, as other markets whipped amid uncertainty on the path of US interest rates following yesterday’s release of notes from the Federal Reserve’s latest policy meeting.
 
Holding rates unchanged on 1 November, but signalling a rate-hike will come in December, minutes from the Fed meeting showed policy-makers split over the strength of inflation and thus the need to raise further in 2018.
 
Stock markets in China today fell over 3%, the worst 1-day pace in 2 years according to Reuters data.
 
The Dollar meantime sank at its fastest pace in 5 months, helping gold bullion recover last Friday’s finish at $1292 per ounce, but gold priced in all other major currencies held lower for the week so far.
 
Crypto-currency Bitcoin meantime traded 1.7% below Tuesday’s fresh all-time high at $8347, some 11-fold higher for 2017 to date.
 
With Google searches for the phrase ‘buy bitcoin’ overtaking ‘buy gold’ last month, UK asset manager Old Mutual “is jumping on the Bitcoin wagon” reports Bloomberg, by enabling a 5% allocation to the crypto currency in its Gold & Silver Fund.
 
Chart of Google Trends data for "buy bitcoin" vs. gold vs. silver (100 = peak)
 
“The idea is to take profits from Bitcoin as it advances to reinvest in gold and silver assets,” Bloomberg quotes fund manager Ned Naylor-Leyland.
 
Data site FE Trustnet says the price of Naylor-Leyland’s fund ended Wednesday 6.0% below its level of 1 year ago.
 
The UK gold price in Pounds per ounce was 0.6% down over that time.
 
Old Mutual’s own factsheet for end-October reports the fund losing 16.0% in Pound Sterling terms from 12 months before.
 
That was almost twice the drop in Sterling gold prices.
 
Shares in Riot Blockchain (Nasdaq:RIOT) – a biotech company since 2000 until switching to distributed record-keeping technology this October – meantime rose 42% on Wednesday, nearly doubling the stock’s price from this time last week.
 
Trading as Bioptix, the company made multi-million dollar losses every year since at least 2012, according to data from MarketWatch.
 
Its stock-price doubled in the week prior to 4 October, when it announced the change.
 
“The company has exploded into popularity on investing social media forums,” says stock-tip research site Zacks.com, “[but] for many, Riot’s [new] business model is still relatively unclear.”
 
“We want to use blockchain to optimize the antiquated arena of commodity trade finance,” writes French investment bank Natixis’ head of global energy and commodities-trade & structured finance in the Americas, Arnaud Stevens, today.
 
“Distributed ledger technology brings some much-needed innovation into our industry.”
 
With US investment banks Goldman Sachs and J.P.Morgan meantime “remaking financial services” with a successful 6-month trial of a centralized ledger for equity swaps, “The most impressive trick that blockchain-in-banking advocates have performed,” writes Bloomberg columnist Matt Levine, “is getting the world to pay attention to back-office technology upgrades, and to think that they might be revolutionary.”

Gold Prices Recover as India, China Premiums Rise But GLD Flat After Institutional Jump

November 23, 2017
Latest News
GOLD PRICES recovered two-thirds of this week’s earlier 1.3% drop against the Dollar on Wednesday, trading up to $1286 per ounce as Asian demand edged premiums in China and India higher, and world stock markets rose yet again.
 
Government bond prices sat tight, keeping 10-year US Treasury yields unchanged at 2.36%, in the middle of the last month’s range.
 
Crypto-currency Bitcoin slipped 2.0% from Tuesday’s new all-time record high at $834, while silver recovered above $17 per ounce.
 
Gold priced in Sterling meantime halved its earlier loss for the week, touching £972 per ounce as the Pound fell while UK finance minister Philip Hammond delivered his second Budget of 2017.
 
Downgrading next year’s GDP growth forecast to 1.5% from 2.0%, Hammond announced a raft of extra spending including a further £3 billion to “prepare” for exiting the European Union in March 2019.
 
Shanghai premiums over London quotes meantime closed Wednesday back above their long-term average at $9.33 per ounce, as a slip in the Yuan gold price was more than offset by a 0.3% rise to a 2-month high in the Chinese currency’s Dollar exchange rate
 
Wholesale gold premiums in India meantime edged up to $1 per ounce according to data from futures exchange the NCDEX’s series for the key import terminal of Ahmedabad.
 
“Suggests quite healthy demand and no oversupply of gold in the local market,” says John Reade, chief market strategist at the mining-backed World Gold Council market development organization.
 
Chart of India gold premiums at Ahmedabad. Source: BullionVault via NCDEX
 
Western investment interest in contrast stayed flat Tuesday judging by the largest gold-backed trust fund – the giant SPDR Gold Trust (NYSEArca:GLD) – which ended yesterday unchanged in size for the 5th session running.
 
Near its smallest in two months, the GLD now needs 843 tonnes of gold to back its shares in issue.
 
With gold bullion rising 3.3% between July and September against the Dollar, institutional shareholdings in the GLD grew by 8.9% according to quarterly filings, reaching the highest number in a year.
 
As a proportion of all GLD stock then outstanding, institutional investors – led by asset management giant Blackrock since Spring 2016, and now followed by investment banks Bank of America-Merril Lynch and then Morgan Stanley – accounted for 39.1% as of 30 September this year.
 
The largest proportion since New Year, that rose from 36.4% as of end-July.
 
“[After] it achieved support at recent lows of $1263,” says the latest gold price technical analysis from French investment bank Societe Generale – “also the 200 day moving average – [this] rebound is likely to remain contained at $1306-1313.”
 
“Near-term resistance at $1286,” reckons bullion bank Scotia Mocatta’s New York office, pointing to the 50-day moving average.
 
Meantime in the Black Sea resort of Sochi, Russian president Vladimir Putin today began a summit with the leaders of Turkey and Iran to discuss the future of Syria, whose dictator Bashar Al-Assad he met at the weekend.
 
Opening the event, Putin is said to have thanked Turkey’s Recep Tayyip Erdoğan and Iran’s Hassan Rouhani for “not allowing [Sunni extremists] ISIS to take over Syria.”
 
Groups opposed to Assad are meantime meeting in Saudi capital Riyadh for 3 days of talks on the same subject.

Gold Bullion Holds 1.1% Plunge Despite Turkey-US Tensions, German 'Crisis'

November 22, 2017
Latest News
GOLD BULLION held onto yesterday’s 1.1% plunge in Asian and London trade Tuesday, moving sideways as world stock markets rose with government bond prices despite the threat of fresh elections in Germany and the rapid escalation of political tensions between Nato military alliance members Turkey and the United States.
 
With commodities holding firm overall, gold bullion traded at $1276 per ounce as the start of US trade approached.
 
Versus the Dollar, the single-currency Euro retreated to a 1-week low near $1.17, down 1.5 cents from last week’s 1-month highs.
 
That failed to put gold priced in Euros back above EUR1090 per ounce however.
 
Ahead of UK Chancellor Philip Hammond presenting his 2018 Budget to Parliament on Wednesday, pro-Brexit members of the Cabinet meantime agreed to offer the European Union up to £40bn in a “divorce” settlement, sources report.
 
The UK’s public sector deficit is currently running 10% below 2016’s level for the fiscal-year to date, new data showed today.
 
The UK gold price in Pounds per ounce today held near Monday’s 2-week lows at £965.
 
Gold bullion in Turkish Lira meantime hit new all-time highs as the currency sank to new all-time lows versus the Dollar amid a worsening diplomatic row between Ankara and fellow Nato member the United States.
 
“The Zarrab case aims to damage Turkey’s ties with Iran, Russia and other countries,” said a spokesman for the government of Recep Tayyip Erdoğan, pointing to the US prosecution of a politically connected gold trader for breaching UN sanctions over Tehran’s nuclear weapons program and smuggling bullion to Turkey’s Shia Islam neighbor.
 
“[This] is a clear plot against Turkey, a political case lacking any legal basis,” the spokesman went on, relaying comments from a meeting of the Turkish cabinet today.
 
With Iran accounting for the bulk of Turkish gold exports back in 2012, Ankara defied the United States in 2013, saying it would “not be bound” by Washington-led sanctions against its Shia Islam neighbor over Tehran’s nuclear program.
 
So far in 2017 Turkey has imported a record $13.8bn of gold, Bloomberg reported earlier this month, more than 3 times last year’s level.
 
The central bank in Ankara has grown its gold bullion reserves to a 3-year high. Consumer demand has also risen sharply according to data compiled for mining-backed market development organization the World Gold Council.
 
Chart of Turkey's household gold demand, 2011-2017. Source: BullionVault via World Gold Council
 
Turkey this weekend withdrew 40 soldiers from the Nato alliance’s Trident Javelin exercises in Stavanger, Norway, in protest at the use of photos – apparently posted by a civilian contractor – of Erdoğan and modern Turkey’s founding father Mustafa Kemal Atatürk as “enemy collaborators”.
 
The UK’s soon-to-depart ambassador to Ankara, Richard Moore, apparently called the error “disgraceful”.
 
Moore is also reported defending Ankara’s purchase of Russian missile technology, as well as “welcoming” Turkey’s talks with Russia and Iran over the crisis in Syria, whose Iran-backed dictator Bashar al-Assad yesterday met with Russian president Vladimir Putin.
 
Anti-Erdogan cleric Fethullah Gülen, now a resident of the US – and the target of an alleged kidnap plot involving President Donald Trump’s security advisor Michael Flynn – stands accused of fomenting 2016’s failed coup in Ankara, for which 40 people were sentenced last month to life imprisonment.
 
“Why are trucks loaded with weapons coming to northern Syria? Which country are you preparing this armament against?” Erdoğan asked of apparently US-supplied arms at a meeting of Turkey’s ruling AKP party today.
 
“No one should expect Turkey to sit back with its hands tied.”
 
Meantime in Germany, “There has rarely been such political uncertainty at any time in the country’s post-war history,” says financial services group Commerzbank its latest bullion-market note after the weekend’s collapse of coalition talks following September’s inconclusive elections.
 
“For years, Germany’s party spectrum has been fragmenting while the fringes have radicalized,” says Speigel columnist Ullrich Fichtner.
 
“The sticking point is Merkel’s “welcome policy” [for Syrian refugees], which she does not want to distance herself from, although she has long since been forced to change it,” says financial newspaper FAZ publisher Holger Steltzner.

Platinum Betting Turns Positive as Gold Bullion Finds Another 'Event-Driven Bid'

November 20, 2017
Latest News
GOLD BULLION slipped together with silver and platinum ahead of the US open on Monday, down 0.5% from last week’s 1-month high just below $1300 per ounce as world stock markets fell following the weekend’s collapse of coalition government talks in Germany.
 
With pundits calling it Germany’s “worst political crisis in decades”, current Chancellor Angela Merkel met this morning with President Frank-Walter Steinmeier after the Free Democratic Party’s walk-out threatened to force a second election following September’s inconclusive result.
 
Gold bullion initially spiked back above EUR1000 per ounce as the single currency fell on the FX market, but it then retreated 0.7% from Monday morning’s 1-week highs.
 
European stock markets regained earlier losses by lunchtime, but Wall Street futures pointed lower once more.
 
Latest data show that money managers grew their speculative betting on Comex gold futures and options by 4.3% last week, net of that group’s bearish bets.
 
That took the ‘net long position’ in Comex gold to its highest in 6 weeks.
 
Bullish betting on silver also grew for a second week running, the same data say, taking the net long to its highest in 9 weeks.
 
Platinum betting among the ‘Managed Money’ category meantime turned positive for the first time in 4 weeks, having first turned negative – with more bearish than bullish bets – this May.
 
Speculators have so far been negative overall on platinum almost two-thirds of the time in 2017.
 
The price of platinum today traded $10 below Friday’s spike to 2-month highs at $954 per ounce.
 
Chart of Managed Money net long position in Comex platinum futures and options. Source: BullionVault via CFTC
 
“Platinum continues to portray signs of stabilization,” says the latest technical analysis from French investment and bullion market-making bank Societe Generale, pointing to graphical support at $900 per ounce.
 
“It has formed multiple double bottoms near those levels, however confirmation [of a] corrective recovery is still awaited.”
 
Looking at gold bullion’s Asian action Monday, “The initial knee-jerk reaction to the [Germany coalition] headlines saw the Euro lower and a move into the Yen and precious metals,” says Swiss refining and finance group MKS Pamp.
 
“However flows soon tempered and bullion spent the remainder of the session easing back from opening levels.
 
“Sizeable open interest in December gold [futures contracts] around $1300, coupled with [the US] Thanks Giving holidays this week is likely to see the market capped around [that] figure.
 
“Event-driven bids seem to be occurring more frequently and may be the new normal,” says a note from US financial services giant Citigroup.
 
“Even as the rates and forex channel dominate the outlook for gold pricing, the yellow metal is increasingly being used by investors as a policy and tail risk hedge.”
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