1800 4653 88
Brisbane
Adelaide

Author Archives: City Gold Bullion

Gold Bullion Hits Trump Highs as Real Bond Yields Fall, Le Pen Win 'Unlikely But Dramatic'

April 4, 2017
Latest News
GOLD BULLION rose sharply to near 5-month highs in London trade Tuesday morning, setting its highest London benchmark price since 10 November – the day after Donald Trump’s US election victory –as major government bond prices also rose, pushing bond yields down to multi-week lows amid growing jitters over this month’s French presidential vote.
 
Benchmark German Bund yields retreated to 5-week lows of just 0.24%, and 10-year US Treasury yields fell to 2.32%.
 
That cut the real rate of interest on US bonds, over and above market expectations for inflation, further below last week’s 1-month lows.
 
Gold prices in London’s wholesale bullion market fixed this morning at $1258.65 per ounce, 1.0% higher from Monday’s auction.
 
Chart of real 10-year US T-bond yields vs gold price
 
World stock markets meantime held flat for a second day overall, while commodities ticked higher, pushing US crude oil back above $50 per barrel.
 
Silver tracked the rise in gold bullion, also nearing its highest price of the 20 weeks since Donald Trump won the US presidential election at $18.34 per ounce.
 
Platinum prices failed to rally in contrast, trading at a near-record $298 per ounce discount to gold as the start of US business approached.
 
“Gold [faces] a probable double top near $1264,” says the latest technical chart analysis from French investment and bullion market-making bank Societe Generale, pointing to the Dollar price’s 200-day Moving Average.
 
“A break above is needed for an extended rebound,” says SocGen, pointing to a possible target above $1300 per ounce.
 
Gold priced in Euros  meantime hit €1181 per ounce at Tuesday’s AM fixing in London – its highest since 1 March – as a new French opinion poll said anti-Euro, anti-EU candidate Marine Le Pen is neck-and-neck with social democrat centrist Emmanuel Macro on 25% each for this month’s first round of the presidential election.
 
“Macron would go on to beat Le Pen in the second round,” says the poll from Le Monde/Cevipof – “one of the biggest samples among the many regular surveys,” according to Reuters – with the former Minister of the Economy, Finance and Industry set to beat the nationalist “by 61% to 39% on 7 May.”
 
“If there’s one lesson from the Brexit and Trump experience,” writes cross-asset analyst, former Lehman Brothers’ VP and now regular CNBC guest Larry McDonald, “it’s don’t listen to establishment (bias) tainted polls.
 
“Traders are starting to put election hedges back on…even as polls continue to show euro-skeptic Marine Le Pen will lose in May’s second round,” he adds, pointing to another sharp widening of French 2-year bond yields over the rates offered by comparable German Bunds.
 
While the odds of Le Pen winning the final round currently look low, says a note from fixed-income analyst Merveille Paja at US investment bank J.P.Morgan, her stated policy of “Frexit would create balance sheet stress and solvency challenges…[and] a FX redenomination…which would likely lead to higher yields in French bonds.
 
“This is a big risk given the fiscal deficit in France.”
 
Gold priced in Sterling also touched its highest prices on Tuesday since the end-February highs, rising above £1011 per ounce as a committee of MPs asked the Government to back up its claims that “no deal will be better than a bad deal” after the 2 years of Brexit negotiations triggered last week.
 
Six of the Brexit committee’s 14 members refused to stand behind the report however, calling it “skewed and partisan.”
 
Best-selling UK newspaper The Sun meantime said “Up yours senors” across a photo of the Rock of Gibraltar on its front-page today, referring to Madrid’s stance on the UK output amid the Brexit negotiations and also alluding to The Sun‘s famous 1990 “Up yours Delors” headline.
 
An advert appears just above today’s headline, promoting cut-price holidays to seven EU nations, including Spain.

Gold Prices Slip, Silver Comex Bets Jump Ahead of Trump-Xi Meeting

April 3, 2017
Latest News
GOLD PRICES slipped against a rallying US Dollar on Monday in London as traders looked ahead to this week’s US payrolls jobs data plus President Trump’s meeting with Chinese counterpart Xi Jinping, writes Steffen Grosshauser at BullionVault.
 
Gold traded in a narrow $5 price range around $1246, recovering from Friday’s 10-session lows as world stock markets held flat overall but European bond prices rose, edging interest rates down.
 
Russia’s Micex stock index fell back but held a small gain for the day as new broke of a deadly explosion on the Moscow metro, killing at least 10.
 
“No sign of geopolitical stress in upbeat markets,” says a headline on FT.com.
 
“[A rising] interest-rate hike cycle has set in,” reckons research chief Mark To at Wing Fung Financial Group in Hong Kong, “and that might keep gold in a wide range of $1200-$1250.”
 
Trump is set to meet Xi on Thursday and Friday at the celebrity real-estate mogul’s golfing and hotel resort Mar a Largo in Florida, with North Korea’s nuclear arms program set to feature high on the agenda.
 
“Trade is the incentive, it is all about trade,” Trump told the Financial Times this weekend when asked how the Unites States will convince China to pressure its Communist neighbor, with a failure to agree meaning unilateral US action to “solve” dictator Kim Jong-Un.
 
Silver prices meantime retreated 0.7% Monday morning from Friday’s close to trade at $18.15 per ounce.
 
New data show the Managed Money category of Comex derivatives traders growing their bullish bets on silver futures and options, net of bearish bets, to a 3-week high in the weekending last Tuesday, taking it almost 250% above the historical average.
Chart of Managed Money net long position in Comex silver futures & options, notional tonnes equivalent. Source: BullionVault via CFTC
 
Speculation in gold futures and options rebounded twice as fast as silver’s last week, with the Managed Money net long growing 50% but still holding at just four-fifths of its historic average, according to data released by US regulator the Commodity Futures Trading Commission.
 
The giant SPDR Gold Trust (NYSEArca:GLD) meantime shrank again on Friday, reversing last week’s previous 3-tonne inflow to hold the amount of bullion needed to back its shares at 832 tonnes.
 
The largest silver ETF – the iShares Silver Trust (NYSEArca:SLV) – also shrank, with shareholders liquidating 3% of the trust across the first quarter as a whole despite the metal’s 11% gain, second only to emerging-economy stockmarkets amongst major tradable assets.
 
“We think that both the gold and silver complexes will make fresh highs this month ahead of the French elections, but likely fade in their immediate aftermath,” reckons analyst Edward Meir at brokerage INTL FCStone.
 
British Prime Minister Theresa May’s Brexit negotiations with the 27 remaining European Union members grew more heated at the weekend after a senior colleague likened Spain’s interest in Gibraltar to the Argentinian invasion of the Falklands in 1982, and suggested a similar armed conflict may follow.
 
Gold prices for UK investors edged higher but held below the £1000 mark as the British Pound fell sharply on the FX market following weaker-than-expected UK manfacturing activity data on the Markit PMI survey.

Gold Price Gains in Q1 for 8th Time in 10 Years

March 31, 2017
Latest News
GOLD PRICES slipped Friday but headed on the last day of March 2017 for a 7.1% gain versus the US Dollar since New Year’s Eve.
 
Rising across the first quarter for the 8th time in the last 10 years, gold prices achieved that in just half of the January-to-March periods over the previous four decades to 2007.
 
Silver price rose harder still, gaining 11.2% in Dollar terms across the first quarter of 2017 to beat all other major assets except emerging-economy stock markets with a London price of $18.06 per ounce on Friday.
 
Rupee gold prices in India – the No.2 household buyer – have this week held at a small premium over the global benchmark of London quotes inclusive of 10% import duty, says the Hindustan Times, with demand recovering from 2016’s policy-driven slump for the spring Hindu festival of Gudi Padwa.
 
Gold premiums in Shanghai today slipped below $12 per ounce for the first time since the start of March, but still offered 4 times the typical incentive of the last half-decade to new imports into China – the world’s No.1 mining, importing, consumer and central-bank buying nation.
 
“Asian gold demand fell 22% in 2016,” said Cameron Alexander, manager of the region’s Precious Metals Demand data at specialist analysts GFMS, now part of the Thomson Reuters group, launching the consultancy’s 50th annual Gold Survey today.
 
“The region accounts for 80% of global consumption, so it is often important to the price.”
 
2016 however saw Western investment demand most notably from large money managers rebound, GFMS explained – a point also stressed at Thursday’s launch of the new Gold Focus 2017 from competitor analysts Metals Focus.
 
With physical fabrication demand for jewelry, retail bars, coins and industrial uses falling 18% in 2016, the GFMS report says, gold prices still rose thanks to exchange-traded trust fund investment and especially speculation in derivatives contracts, where traders bet on the future price rather than buying bullion itself.
 
Over the last decade, said Alexander, trading volumes in Comex gold futures have gone from just 10% to now 30% of London’s wholesale ‘over the counter’ market in gold bullion.
Chart of Comex gold futures contracts trading volumes from Thomson Reuters GFMS' fiftieth annual Gold Survey
“China’s voracious appetite for jewelry” in contrast “was more than sated last year,” Alexander went on in today’s GFMS presentation, with a change in fashion to lower-carat, higher profit-margin items likely to dent consumption again in 2017.
 
But “the decline in China’s investment bar demand has now likely run its course,” he went on.
 
India’s gold demand also looks set to recover from last year’s 37% plunge in imports according to GFMS, although the imposition of General Sales Tax in mid-2017 poses a short-term challenge to household buying.
 
As it is, Alexander said Friday, “Consumers are quite happy to purchase gold at current prices,” helped by a stronger Rupee, early forecasts for a good monsoon – key to rural incomes and demand – and economic sentiment as shown by the first-quarter of 2017’s sharp gains in India’s stockmarket indices.
 
After gold prices averaged $1250 per ounce across 2016, Thomson Reuters now predicts a 0.9% rise for full-year 2017.
 
Metals Focus’ base case sees an annual average gold price of $1285 but with a possible $1475 high if political or economic stress drives strong new investment demand.
 
“The [biggest global] risk during the second quarter of this year,” says a note from Chinese-owned bullion clearing and market-making bank ICBC Standard, “is that unresolved arguments over deficit spending [mean] the [Trump] administration fails to get any meaningful tax reform or infrastructure spending bills written, let alone passed. 
 
“That would almost certainly lead to the implied probability of another 25bp rate hike in June falling quickly from current levels around 45%. And that in turn would likely give gold prices the impetus to break up through $1300 again.”

Gold Price Stuck Below 200-Day MA as Merkel Snubs May, China 'Tries to Curb Bubbles'

March 30, 2017
Latest News
GOLD PRICES again dipped and rallied back above $1250 per ounce in Asian and early London trade Thursday, unchanged from the end of last week with analysts continuing to point to the metal’s 200-day moving average at $1260 as strong resistance to the first quarter’s 8.6% gain.
 
Asian stock markets closed lower but European shares held flat overall.
 
The British Pound meantime held sharply below this week’s near 8-week highs on the FX market after German Chancellor Angela Merkel rejected the central proposal in UK Prime Minister Theresa May’s formal Brexit letter – handed to the European Council yesterday – for negotiations on both the UK leaving and its then-relationship with the European Union to start now and run together.
 
While the giant GLD gold ETF ended Wednesday unchanged in size, the SLV silver trust shrank 0.8% as shareholders liquidated stock, forcing an 85-tonne outflow – equal to more than  1 days’ global silver mine output – and taking the fund’s bullion holdings back to mid-March’s 12-month lows at 10,291 tonnes.
 
Trading at $18.16 per ounce, silver prices held a 2.1% gain for the week so far Thursday morning in London.
 
“Resistance remains firm at $1259.40 – the 200 day Moving Average,” says the daily technical analysis of gold prices from bullion clearing and market-making bank Scotia Mocatta’s New York office.
 
“Spot gold has retested the 200-day ma,” agrees German bank Commerzbank’s weekly technical book.
 
Now acting as resistance, “This guards $1295.50, the 5-year downtrend,” it says.
Chart of the US Dollar gold price and its 200-day Moving Average
 
Chinese gold prices neared the end of March unchanged for the month in Yuan terms on Thursday,  also fixing in Shanghai at a $12 per ounce premium to comparable London quotes – a strong incentive to new imports into the world’s No.1 gold consumer nation.
 
Also the No.1 mining nation since 2007, China may have identified what Shandong Gold (SHA:600547) – the country’s 3rd largest gold producer – calls a “world-class deposit” in the far eastern Jiaodong Peninsula, with 358 tonnes of reserves.
 
Should the deposit’s likely resources also get tapped, the site could produce gold for 40 years at full capacity Shandong says.
 
The heaviest official buyer of gold so far this century, the People’s Bank of China will meantime raise its key interest rate twice in 2017 according to a survey of fixed-income analysts by Bloomberg.
 
The city of Beijing has introduced nine policies in just 10 days “aimed at curbing skyrocketing home prices,” reports the People’s Daily online, including a ban on turning commercial property into residential units and a rule that potential home-buyers must have paid tax locally for 60 consecutive months.
 
“China is far from the end of efforts to squeeze out bubbles,” reckons ANZ Bank economist David Qu in Shanghai, “[but] the PBOC will to some extent follow the Federal Reserve in tightening to keep the rate gap largely steady.”
 
After renowned Fed ‘dove’ Charles Evans this week said two further rate rises look warranted, a view backed separately by vice-chair Stanley Fischer, non-voting Boston Fed president Eric Rosengren called Wednesday for a total of four hikes in 2017 – the initial Fed forecast from December’s meeting, since downgraded in their March forecasts.
 
But “while the economy overall is recovering and the job market has improved substantially,” said Fed chair Janet Yellen in a speech yesterday, “pockets of persistently high unemployment, as well as other challenges, remain.”

Gold Price Defies ETF Outflow as UK Triggers Brexit, Pound Whips

March 29, 2017
Latest News
GOLD PRICES held $10 per ounce higher for the week so far at $1253 Wednesday lunchtime in London as world stock markets traded flat overall and the British Pound whipped on the currency market as the UK Government formally notified the European Council of its intention to leave the EU following last June’s Brexit referendum.
 
Commodities ticked higher, pushing European benchmark Brent crude oil further above $51 per barrel, while major government bond prices also rose, nudging 10-year German and UK yields 3 basis points lower to 0.35% and 1.16% respectively.
 
Losing almost 2.5 cents from yesterday’s 8-week high above $1.26, the Pound first rallied but then fell back after European Council President Donald Tusk received the UK Government’s letter triggering a 2-year countdown under Article 50 of the Lisbon Treaty – itself rejected by referenda in France and the Netherlands in 2005 but signed into law by EU member states in 2007.
 
The Pound has fallen by 15% since last June’s Brexit referendum on quitting the 28-member state EU, and almost halved against the Dollar since the UK joined what was then a 9-member union in 1973.
 
Gold priced in Sterling today spiked to a 4-week high of £1010 per ounce, higher by more than one-third from the start of 2016, before ex-prime minister David Cameron set a date for the UK referendum which then saw 17.4 million people vote to leave on 23 June, more than have ever voted for one political party or single decision in any UK ballot.
 
Some 34.7% of the 46.5 million electorate voted to remain and 27.9% failed to vote.
 
“There can be no turning back,” said Prime Minister Theresa May to the UK Parliament today, promising to “take control of the things that matter most to us.”
 
“Dear Brits, ze door is schtill open,” answered an editorial already published on the front page of Germany’s Die Welt in mock-accented English, urging “the EU’s second largest net contributor [to] correct this historical mistake.”
 
Data meantime showed the giant GLD gold ETF shrinking again on Tuesday, the 9th liquidation in 20 trading days this month by shareholders of the $33.6 billion trust fund.
Chart of the SPDR Gold Trust's bullion backing, 3 month percentage change
 
Taking the GLD’s gold bullion holdings down 1.8 tonnes to 833.5 – equal to around 100 days of global gold mining output – such liquidations have been 45% more frequent in March 2017 than during the previous 12 months.
 
The SLV silver ETF in contrast has now reversed one-third of March’s earlier 160-tonne outflow to need 10,377 tonnes of bullion backing – equivalent to well over one-third of annual world silver mining output.
 
Silver prices today held shy of Tuesday’s near 4-week high but rallied to $18.15 per ounce in London trade, keeping its year-to-date gains at 14.0% in Dollar terms.
 
That beats gold’s 8.7% gain for 2017 so far, as well as major-asset leader emerging-market equities (up 12.5%) and Eurozone stock markets (up 8.8%) on data from Reuters.
 
“We are leaving the European Union, but we are not leaving Europe,” says May’s UK letter to the EC’s Tusk, proposing seven “principles…to agree terms” such as “engag[ing] constructively and respectfully [and] giving as much certainty as possible.”
 
May states that the UK “does not seek membership of the single market…[and so British companies] will have to align with rules agreed by institutions of which we are no longer a part – just as UK companies do in other overseas markets.”
 
Forty-five per cent of UK exports went to other EU member states on the latest data, worth some £12.8 billion in January and 22% higher from the same month last year.
 
Imports from EU members were greater, totalling £19.5bn – some 17% higher from January 2016 – and £0.9bn larger than imports to the UK from non-EU states.

Gold Prices 'Bullish' Below 200-Day MA and 2011 Downtrend as Dollar Unwinds Last of 'Trump Trade'

March 28, 2017
Latest News
GOLD PRICES rallied $7 per ounce touch $1258 in London trade Tuesday morning, nearing yesterday’s new 1-month high as world stock markets also held flat but the Dollar retreated again as pundits and analysts continued to talk of the ‘Trump trade’ having ended.
 
Friday’s failure to repeal Obamacare “sends investors a cautionary message about opposing factions within the GOP caucus,” says one bank in a note.
 
“Sudden shift in sentiment,” says another.
 
Trading deadflat from this time last month, gold prices yesterday “found resistance at 1259.70 – the 200-day Moving Average,” says a technical analysis from bullion clearing and market-making bank Scotia Mocatta’s New York office.
 
“Support remains unchanged at 1237.70…Momentum indicators are bullish and gold appears poised to target the previous month’s high [at] 1264.20.”
 
“Gold is flirting with the earlier advocated resistance of $1259/1264, the 200-day Moving Average and last February high,” agrees a technical note from French investment bank Societe Generale.
 
Above there, gold prices could see “an extended recovery…more importantly towards $1307/15, the trend line resistance in place since the all-time high in 2011.”
Chart of the US Dollar gold price's 2011-2017 downtrend. Source: BullionVault
 
Gold prices outside the Dollar held lower for March to date meantime, as the US currency fell again on Tuesday to give back all of its post-Trump election-victory gains versus both the Euro and Sterling.
 
The giant SPDR Gold Trust (NYSEArca:GLD) yesterday expanded by 2.7 tonnes as new shares were created, taking its total backing to 835 tonnes – the largest size since immediately after the Fed’s mid-March interest rate rise.
 
Monday’s growth in the GLD marked only the 19th daily addition in 94 trading days since Donald Trump’s victory in November’s US presidential election – less than half the prior frequency of 2016.
 
“We probably got ahead of ourselves,” says the Chicago Fed’s voting policy maker Charles Evans of the central bank’s last 2016 forecast for the impact of Trump’s fiscal plans on this year’s growth and inflation.
 
“This last [forecast] in March, we moved much more of [the impact] to 2018,” Evans told Bloomberg on Monday.
 
“[So] you don’t want to just slam on the brakes [of monetary stimulus]. You want to ease off of the accelerator first.”
 
Silver meantime rallied with gold prices Tuesday but held 1.1% lower from this time last month at $18.12 per ounce.
 
Platinum prices traded unchanged for the week so far at $968 per ounce, some 1.6% below yesterday’s pop to 3-week highs and nearly 6.3% lower from the end of February.

Silver Price Wrong-Foots Comex Speculators, Jumps to $18 as Dollar Sinks After Trump Folds on Obamacare

March 28, 2017
Latest News
SILVER PRICES jumped through $18 per ounce Monday lunchtime in London, outstripping the rising gold price as US stock markets opened sharply lower and the Dollar sank after President Donald Trump abandoned his attempt to repeal Barack Obama’s Affordable Care Act – a key plank of his election pledges.
 
Despite House Speaker Paul Ryan working “very, very hard” to garner enough support to replace Obamacare, Trump said he will now move onto pushing tax reform instead.
 
Major government bond prices jumped, pushing 10-year US Treasury yields down to 1-month lows at 2.36%.
 
Gold touched $1260 per ounce – up 1.4% from the start of Asian trade to its highest Dollar value since 27 February.
 
Silver prices added 2.0% to touch $18.13 before easing back 10 cents per ounce.
 
Priced in the Euro the “devil’s metal” made only half that gain, touching a 3-week high at €16.64.
 
Silver’s gains were more muted again for UK investors, as the British Pound rose fast on the FX market ahead of this Wednesday’s Article 50 notice triggers 2 years until the UK formally quits the EU. 
 
“Gold [just] posted a second straight weekly gain,” says Australia bank ANZ in a commodities note, “as the USD continued to weaken under concerns that the failure to scrap Obamacare would hinder Trump’s pro-growth policies.”
 
“Investor activity will remain key to [silver’s] trend,” said a separate note last week from specialist analysts Metals Focus, “[and] should remain supported by healthy safe haven buying.”
 
While the failure of Geert Wilders to win the Netherlands’ election this month “has dampened expectations of a growing far right movement across the continent,” Metals Focus goes on, “the forthcoming French presidential election could see these fears rekindled.
 
“Even though gold will be the main beneficiary, there will also be spillover benefits for the silver price.”
 
Looking at Comex futures and options contracts, latest data say the number of bullish derivatives held by Managed Money traders shrank for the third week running in the week-ending last Tuesday, taking the total loss to one-in-six contracts since the Fed’s policy team announced their clear intention to raise rates at the March meeting at the start of this month, reaching a 6-week low.
 
The number of bearish silver bets has meantime swelled by one quarter, reaching its largest size in 8 weeks and pulling the Managed Money’s net spec long down 23% to a notional equivalent of 10,119 tonnes.
Chart of silver Comex futures and options net positioning by Managed Money category of traders. Source: BullionVault via CFTC
 
Equal to more than 4.5 months of total global silver mine output, that Managed Money net spec long is two-thirds of July 2016’s all-time record, some 180% greater than the last 10 years’ average.
 
“Unlike most other commodities, gold is often viewed as a safe haven asset as well as a pseudo-currency asset,” says a note from US finance giant Citi.
 
“Exemplifying the divergent trend in recent weeks, Comex gold open interest declined 38% versus record highs of August 2011. Conversely, robust Comex silver open interest is currently just 17% shy of the all-time high in August 2016.”
 
Year-to-date, Citi’s analysts also “note an increase in [Comex trading] turnover of 18% and 33% for gold and silver respectively – indicative of rising liquidity, largely through speculative interest.”
 
Bullion holdings to back the giant iShares Silver Trust (NYSEArca:SLV) were meantime unchanged last week at 10,342 tonnes.
 
Gold holdings for the SPDR Gold Trust (NYSEArca:GLD) shrank by 1.5 tonnes to 832 – almost exactly matching the GLD’s average holdings since the exchange-traded gold fund launched in November 2004.
 
Speculative Managed Money betting on Comex gold contracts rallied hard last week, recovering one-third of the previous week’s 46% plunge – the sharpest drop since November 2015 saw the speculative position amongst money managers turn net negative on gold for the first time in almost 10 years of data.

Silver Price Hits 2% Weekly Jump as Stocks Slip, Gold Gains, Investors Spy Platinum 'Valuation'

March 25, 2017
Latest News
SILVER PRICES shot higher Friday lunchtime in London, overtaking gold’s 1.6% gain for the week in Dollar terms to touch $17.75 per ounce as platinum also rose.
 
Currencies were little changed but commodities rallied after strong European PMI manufacturing surveys contrasted with weaker data from Japan and a 6-month low in US activity.
 
Bond prices rose again, nudging interest rates lower as Western stock markets held flat to head for their fourth weekly drop of 12 in 2017 so far.
 
With silver prices adding 2.0% from Friday last week, gold rose to $1248 per ounce but lagged yesterday’s spike to 3-week highs at $1253.
 
“Longer term our bias is bullish,” writes Karen Jones in her latest Bullion Weekly Technicals for Germany’s Commerzbank.
 
“But [that] will only be confirmed on a break and weekly close above [gold’s] 5-year downtrend at $1298.”
 
Further ahead, the gold mining industry needs to “fundamentally transform” if it’s to survive and prosper according to Nick Holland, CEO of world No.7 miner Gold Fields (JSE:GFI), speaking Thursday at the University of the Witwatersrand’s School of Mining Engineering.
 
“There are relatively few new projects and expansions expected to begin producing this year,” said the Q4 2016 analysis from data specialists Thomson Reuters GFMS last month, “and those in the near-term pipeline are generally fairly modest in scale.
 
“Hence our view that global mine supply is set to continue a multi-year downtrend in 2017.”
 
Chart of quarterly world gold mining output. Source: Thomson Reuters GFMS
 
“A number of significant headwinds battered the gold industry in recent times,” says Creamer Media’s Mining Weekly, quoting Holland’s speech, “including the need to dig deeper amid declining grades…doubling the period from discovery to production from 10 years to 18 years, and resulting in cost inflation.
 
“Exacerbating this is growing demand by both governments and communities for greater benefits” from the industry, with the number of incidents with local communities rising 20% per year between 2002 and 2015.
 
With speculation in Comex silver futures and options falling on last week’s data for the first time so far in 2017, “The positive tone to institutional investment we expect in 2017 should comfortably offset a weaker outlook for global [retail] physical investment,” says the latest weekly note from specialist analysts Metals Focus.
 
Because silver’s market is much smaller than gold’s, Metals Focus sees “likelihood for heightened price volatility [and] the price could enjoy robust gains in 2017, with the potential to comfortably exceed $20 before year-end.”
 
Platinum is also drawing larger investor interest, writes strategist Tom Kendall at the former South African-owned bullion and commodities division of China’s ICBC Standard Bank, pointing to “light buying of platinum [backed trust fund] ETFs…distributed across several funds listed in different locations.
 
“Valuation arguments may be starting to carry some weight.”
 
Platinum prices rose $5 per ounce Friday to trade at $967, just above last week’s close but some $280 per ounce below gold.
 
That contrasts with a 20th Century premium for the more industrially useful platinum of more than $150 over gold.

Gold Prices 'Challenged' at $1250 Before Trump's Obamacare Vote as Inflation Whacks UK Retail Sales

March 24, 2017
Latest News
GOLD PRICES again outpaced other precious metals to set fresh 3-week highs in London wholesale trade Thursday, rising again above $1250 per ounce as world stock markets held flat from this week’s slump ahead of US lawmakers voting on President Trump’s repeal of Obamacare.
 
With all Democrat Representatives set to vote against the change, keeping the Affordable Care Act in place, “No more than 22 Republicans can vote against the bill if it is to pass,” says the New York Times, reporting that 29 currently look likely to rebuke Trump’s plan.
 
Silver meantime popped higher to $17.69 per ounce, its strongest in 2 weeks, but platinum prices held unchanged at last week’s finish of $965.
 
Retreating below a 3-week high of $1250 as news broke Wednesday of an apparently lone terrorist killing 4 people outside the Houses of Parliament in London, gold prices then rose but failed to hold that level again overnight.
 
“This psychologically important threshold appears to be posing something of a challenge,” said the latest daily commodities note from German financial services giant Commerzbank Thursday morning.
 
“[But] the chances of the gold price rising above $1250 are good [now that] hopes of ‘Trumpflation’ are dwindling…putting pressure on the US Dollar, US stock markets and US bond yields.”
 
Most notably amongst hedge funds and other speculator traders in Comex gold futures and options, Commerzbank says, “in the run-up to [last week’s] Fed meeting their net long positions had dropped to their lowest level since the beginning of the year.
 
“There is ample upside potential, in other words.”
Chart of 'Managed Money' net betting on Comex gold futures and options to 14 March 2017. Source: BullionVault via CFTC data
 
Both the giant GLD gold ETF and SLV silver trust fund products held unchanged in size on Wednesday, remaining at 
 
“Gold has surged on the back of the 10-year US Treasury bond yield pulling back,” says a technical analysis from French investment and bullion market-making bank Societe Generale, forecasting “another leg of up-move towards $1259/1264, the 200-day Moving Average.”
 
“We saw producer selling [overnight],” says the Australian trading desk of Swiss refiners MKS Pamp, referring to mining companies selling gold “especially in crosses [for non-US Dollar currencies].
 
“However the yellow metal continued to trade bid during Asian hours,” with buyers supporting the price.
 
With new US home sales data due Thursday, and global manufacturing surveys coming tomorrow, new UK figures this morning said retail sales jumped 6.2% by value in February from a year earlier.
 
Some 2.7 percentage points of that growth came from price inflation however – reported earlier this week at a 5-year high, and creating the sharpest drop in volume growth since the crash of 2009 according to economist and former Bank of England policymaker Andrew Sentance.
 
“It is true that headline inflation rates have climbed around the world,” said Fed policymaker Neel Kashkari – formerly an assistant at the Treasury during the Lehmans Crash, and now president of the Minneapolis Fed – defending his lone vote against the US central bank’s rate rise to 1.00% last week.
 
“[But] that is due to higher oil prices, which can be transitory,” explained Kashkari, who will speak for the first time since the Fed vote later on Thursday.
 
“More importantly, core inflation rates in advanced economies continue to come in below their inflation targets.”

Gold Prices Hit 3-Week High as 'Trumpflation' Fails Ahead of Obamacare Vote, Silver & Platinum Lag

March 23, 2017
Latest News
GOLD PRICES hit new 3-week highs in London trade Wednesday, rising above $1247 per ounce as Asian stock markets closed sharply lower and European equities dipped on what pundits and analysts called worries that the ‘Trump reflation trade’ is fading.
 
Failure to pass tomorrow’s vote on the new US President’s repeal and replacement of Barack Obama’s Affordable Care Act “could imperil tax and spending reforms” Bloomberg quotes “leading Republicans”.
 
Commodities fell across the board while government bond prices rose as world equities repeated yesterday’s 1.5% loss in Wall Street stocks.
 
That nudged 10-year US Treasury yields down to the lowest so far this month at 2.40%, sharply below mid-March’s two-and-a-half-year highs.
 
With gold prices reclaiming their level of 1 month ago, silver and platinum both struggled in contrast.
 
The more industrial precious metals held 2.9% and 3.8% lower respectively from this point last month in US Dollar terms.
Gold, silver & platinum price vs. US Dollar, last 1 month rebased to 100. Source: BullionVault chart
 
The New York-listed SPDR Gold Trust (NYSE:GLD) yesterday expanded by 1.4 million shares, some 0.5%, as investor demand for the gold-backed ETF grew for only the 17th day so far in 2017, barely half as often as during the same period of 2016.
 
Taking the GLD’s gold holdings to a 3-session high of 834 tonnes – equal to some 100 days of global gold mining output – that also made Tuesday only the third time in almost 6 weeks that the world’s largest gold-backed ETF met increasing investor demand on a rising gold price.
 
“The lack of strong conviction towards gold that has prevailed so far this year suggests that the recovery…has been driven more by short-covering than longs rebuilding positions significantly,” says a note from Swiss investment and bullion bank UBS, quoted by Barron’s.
 
“If US economic stimulus reignites the ‘Trumpflation’ trade,” says Jonathan Butler at Japanese conglomerate Mitsubishi, “precious metals could once again lose out to risk assets.”
 
For now however, “Crude oil’s fall below its 200-day moving average for the first time since November…calls into question the argument that rising inflation will underpin [US Fed] rate rises in the coming months,” Butler says – “[a] positive for gold.”
 
Gold prices in China – the metal’s No.1 mining, importing and consumer nation – meantime closed at new March highs even as the Yuan rose once more versus the Dollar overnight.
 
Compared to the global benchmark of London settlement, Shanghai’s daily ‘fix’ showed a premium of $12 per ounce – in line with the 2017 to date, but 4 times the city’s previous typical incentive to new shipments.
 
Shares in China’s Tencent Holdings (HKG:0700) today fell 1.6% from Tuesday’s new all-time high after the internet and mobile services giant reported annual profits up 42% on turnover up 48% for the 12 months ending 31 December.
 
Already in 2017, TenCent has added “microgold” trading and transfers to its WeChat messaging and payments app, launching in time for late-January’s Chinese New Year as a new version of the “lucky money” traditionally gifted in red envelopes to celebrate birthdays and festivals. 
 
Tracking bullion prices on the Shanghai Gold Exchange, and developed with Chinese finance giant ICBC – the world’s largest bank by assets – the new product has seen “explosive growth” after further promotion for Valentine’s Day according to an internal memo leaked to Reuters.
older newer