1800 4653 88
Brisbane
Adelaide

Author Archives: City Gold Bullion

Gold Jumps, GLD Expands 4 Days Running as Greek Debt Crisis Returns on Maastricht's 25th Anniversary

February 8, 2017
Latest News
GOLD PRICES outran silver for a second day running in London on Tuesday, hitting new 3-month highs in Dollars and also Euros as worries spread of a return of the Greek debt crisis. 
 
Silver failed to match an overnight return to yesterday’s new 12-week highs at $17.76 per ounce, but gold touched $1236 before edging back.
 
Euro gold prices jumped to 3-month highs above €1150 per ounce.
 
European stock markets shrugged off yesterday’s dip on Wall Street, but Asian equity indices closed mostly lower.
 
Shanghai gold prices rose to new 3-month Yuan highs on Tuesday as volumes continued to increase after last week’s return from the new Year of the Rooster holidays, holding their premium above London quotes at $8.50 per ounce.
 
That’s markedly above the incentive for new bullion imports offered immediately after the last two Chinese New Year holidays.
 
“Gold closed above the 100-day Moving Average,” says a technical analysis of the Dollar price from bullion market maker ScotiaBank‘s New York office, now seeing “support” at $1205 per ounce.
 
“I am biased to the upside as gold appears poised to target the 200-day MA [now] at $1263.”
 
More bullish still are silver prices, says London bullion market-maker Societe Generale’s technical analysis team, saying that the cheaper metal has followed late-2016’s “steady correction” by making “a rebound.
 
“[Silver] has crossed above a multi-month descending channel [from July’s peak and now coming in] at $17.30 [where] immediate downside should be cushioned…
 
“Next objective for the up move will be at $18.40…the lows of last August.”
 
Hedge funds and other speculators in Comex futures and options last week grew their derivatives betting on silver prices to the most bullish position in 4 months, net of bearish bets.
 
In contrast, cash-paid positions in the giant metal-backed iShares Silver Trust (NYSEArca:SLV) held unchanged overall yet again yesterday, remaining at the 7-month low reached last week.
 
With Comex gold positioning growing but markedly lighter than silver, top gold ETF the SPDR Gold Trust (NYSEArca:GLD) grew its bullion holdings for the fourth session running on Monday, needing another 4 tonnes to back its shares at a fresh 2017 high of 818 tonnes.
 
Chart of the GLD gold ETF's bullion backing vs. benchmark bullion prices
 
The GLD last expanded for 4 days running just ahead of June 2016’s UK referendum on leaving the European Union.
 
Today marks the 25th anniversary of the European Union’s Maastricht Treaty, celebrated by the European Central Bank in a tweet as “paving the way for the Euro”.
 
Signed on 7 February 1992, and seeking to establish economic and monetary union as well as common foreign and security policy, the Maastricht Treaty was rejected by Danish voters that spring, and only narrowly backed by French voters later that year.
 
September 1992 then saw the UK forced out of the Exchange Rate Mechanism – the Euro currency’s pre-cursor – as the Pound crashed from its peg to the German Deutsche Mark amid high inflation and weak growth.
 
Greece now wants “inclusion in the [ECB’s] quantitative easing program,” said an Athens’ spokesman today, rejecting what he called the International Monetary Fund’s “illogical” position on renewing its bail-out program with Greece’s Eurozone partners only if the country’s total debt is reduced.
 
Yields on Athens’ 2-year bonds meantime jumped towards a 5-month high of 10% after German finance minister Wolfgang Schauble said an exit by the IMF – which last week called Greece’s debt repayments “highly unsustainable” – would mean “the program is over.”
 
British Pound gold prices meantime jumped towards £1000 per ounce as Sterling sank on the FX market following much weaker-than-expected house price data from the Halifax mortgage lender.

Gold Price Hits $1230, Silver Comex Bets Jump, as France's Le Pen + Ukraine 'Add to Trump Risk' on Iran

February 7, 2017
Latest News
GOLD PRICES extended last week’s 2.4% gains to reach new 3-month highs on Monday in London, briefly breaking above $1230 per ounce even as the US Dollar rose on the FX market amid news of French presidential candidate Marine Le Pen calling for ‘Frexit’ from the European Union, writes Steffen Grosshauser at BullionVault.
 
Silver rose alongside, but lagged the new highs in gold prices to hit $17.66 per ounce – some 6 cents short of Friday’s new 12-week peak.
 
Proposing a 10% cut to France’s income tax rate for lower-earners, plus retention of the 35-hour working work, Le Front National’s 144-point manifesto says Le Pen would begin 6 months of “radical” renegotiations on France’s membership of the EU if elected in May.
 
Fearing a loss of access to the EU’s 500 million consumers, more than half of UK business leaders believe the British economy has already suffered from last year’s Brexit vote, despite the actual process of leaving the EU not having begun, according to the Ipsos Mori opinion pollsters. 
 
With European shares inching lower – and French bond yields doubling so far in 2017, rising sharply above comparable German rates – gold added 0.8% for the week so far to reach the highest Dollar price since mid-November.
 
“Gold and silver [could] continue to move higher in February,” reckons brokerage INTL FCStone analyst Edward Meir, “largely on account of the continued weakness in the Dollar, coupled with geopolitical developments.”
 
While new US president Donald Trump and Nato alliance chief Jens Stoltenberg discussed the escalating violence with pro-Russian separatists in Ukraine‘s easterrn Donbass region with at the weekend, “The [US] standoff with Iran is the most problematic,” says Meir, because “if tensions escalate…one side or the other could pull out of the nuclear accords.
 
“We could see an immediate spike in gold.”
 
Looking further ahead, “gold will climb about 6%” in 2017 due to “the amount of political risk being created by this new US president,” reckons Independent Strategy analyst David Roche.
 
Winner of the London Bullion Market Association’s 2016 Forecast competition, Swiss bullion bank UBS’s analyst Joni Teves now sees gold prices averaging an 8% gain this year in Dollar terms, citing “elevated macro risks” to other investment assets.
 
Money managers betting on gold prices through Comex futures and options grew their bullish positions and cut their bearish contracts as a group last week, new data showed late Friday.
 
Altogether, that raised their ‘net speculative long’ position on gold prices by more than one-fifth to an 8-week high, still only 60% of the last 10 years’ average.
Chart of 'Managed Money' net bullish betting on Comex gold futures and options. Source: BullionVault via CFTC
 
Comex silver contracts meantime saw the Managed Money category extend its net speculative long betting another 14% according to positioning data reported to US regulator the CFTC.
 
Reaching a 17-week high, the net spec’ long amongst money managers in Comex silver stands 176% larger than its 10-year average.
 
The giant iShares Silver Trust (NYSEArca:SLV) in contrast shrank last week, cutting the exchange-traded trust fund’s holdings to a new 7-month low. 
 
Holdings of the world’s largest gold-backed ETF vehicle, the SPDR Gold Trust (NYSEArca:GLD), grew around 0.4% to 814 tonnes on Friday.

Gold ETF Trading Defies Bar + Coin Downturn, Jewelry Plunge as Bullion Gains on US Jobs Data

February 4, 2017
Latest News
GOLD TRADING in wholesale bullion and ETF trust funds saw global prices rise Friday towards the best weekly close in 12, gaining together with European and New York stock markets as the Dollar retreated following stronger-than-expected US jobs data.
 
With Wall Street expecting 175,000 net hires across the world’s largest economy for January, the Bureau of Labor Statistics today put its first estimate at 227,000.
 
The number of people actively looking for work also rose, nudging the jobless rate slightly higher to 4.8%.
 
Gold traded up to $1216 per ounce as the weekend approached in London, some 2.0% higher from last Friday’s finish, with exchange-traded gold ETF funds rising alongside.
 
Gold traders in China had earlier returned from the week-long Lunar New Year holidays – now the world’s single busiest period for retail gold demand, overtaking India’s Diwali since 2012 – to find bullion prices 1.3% higher in Dollar terms.
 
Chinese stock markets welcomed the new Year of the Rooster with a 0.7% loss, and gold trading volumes were quiet in Shanghai, where the daily benchmark price fixed at its lowest premium in 3 months above comparable London quotes.
 
At nearly $6 per ounce however, that was still over twice the typical incentive to import new bullion shipments from the world’s central storage hub to its No.1 consumer nation.
 
China’s household gold demand fell 7% in 2016 according to new full-year data published Friday by mining-backed market-development organization the World Gold Council.
 
But China still doubled its lead over historic No.1 India in tonnage terms as the subcontinent hit regulatory and economic blocks to buying gold, peaking with November’s shock demonetisation by the government of 86% of all currency in circulation.
 
Helping dampen consumer demand worldwide, Dollar gold prices rose in 2016 for the first year in four.
 
Exchange-traded trust funds backed by bullion – which give investors exposure to gold prices without any ownership of metal – also expanded worldwide last year for the first time since 2012.
 
Excluding gold ETFs however, global gold demand from visible sources fell to the lowest since at least 2009 on the World Gold Council’s new data, retreating 13% from 2015 as world prices rose, and dropping by almost one-fifth from the previous 5-year average.
 
Chart of visible global gold demand via World Gold Council
 
The largest gold ETF – the SPDR Gold Trust (NYSEArca:GLD) – expanding for a second-day running on Thursday, the first such back-to-back growth in investor demand for the stock since mid-October.
 
Adding 12 tonnes this week however, the GLD has so far reversed only 1/12th of its 155-tonne outflow as shareholders liquidated stock since Donald Trump won the US presidential election in November.
 
“2016 was the second best year for ETFs on record,” says the World Gold Council’s report today, the highest since the global economic depression of 2009 saw central banks jump to zero interest rates and quantitative easing.
 
Gold investment demand for small bars and coins “sprang into life in Q4 having been subdued for most of the year,” the report goes on, calling the late 2016 price-drop “the buying opportunity many retail investors had been waiting for.”
 
Jewelry demand meantime sank to a 7-year low on the World Gold Council’s data – compiled by specialist analysts Metal Focus – down some 14% worldwide thanks to “regulatory and fiscal hurdles in India and China’s softening economy.”
 
Competitor analysts Thomson Reuters GFMS last week put the 2016 drop in jewelry demand nearer one-fifth, pulling it down to the lowest since 1988.

Silver Price Touches 3-Month High Even as SLV Shrinks, India Adds 12.5% Tax, Gold Reclaims 2/3rds of 'Trump Dump'

February 3, 2017
Latest News
SILVER PRICES hit new 3-month highs and gold rose to the highest in 11 weeks against the Dollar on Thursday as world stock markets stalled near record highs amid news of new US president Donald Trump slamming down the phone on key Pacific ally Australia’s prime minister Malcolm Turnbull.
 
“He didn’t let diplomatic niceties get in the way of how he felt about [the] refugee policy,” Australia’s ABC News quotes Philip Rucker, the Washington Post journalist who broke the story, referring to what Trump called “a dumb deal” on Twitter.
 
Trump also today attacked long-time US antagonist Iran, as well as former president Barack Obama’s policy towards the Middle Eastern state.
 
Silver bullion rose to fresh 12-week highs at $17.70 per ounce as bond yields fell and commodities held flat overall, still some 16% below last summer’s 2-year highs in the wake of the UK’s Brexit referendum shock.
 
Gold’s jump to $1223 today still left it 11% lower from July’s 2-year high in Dollar terms, but recovered two-thirds of the metal’s sharp post-US election slump.
 
Chart of US Dollar gold price, last 3 months
 
Gold priced in Sterling meantime reversed all of last week’s 2.7% drop as the Pound fell 1.5 cents after a vote of ‘no change’ from the Bank of England – now holding £445 billion ($556bn) of QE bond purchases with interest rates at 0.25% despite raising its own 2017 economic forecast dramatically – followed last night’s parliamentary vote to let the Conservative Government trigger Article 50 and proceed with taking the UK out of the European Union.
 
“Clearly, money managers want to be diversified in these turbulent times,” reckons a note from Canadian brokerage TD Securities, “as markets question Mr.Trump’s ability to deliver strong growth.”
 
Favored hedge-fund vehicle the giant SPDR Gold ETF (NYSEArca:GLD) yesterday saw a 10-tonne inflow, needed to back extra shares issued to meet investor demand in the trust-fund product – the heaviest creation of new shares since early October.
 
Seeing only three 10-tonne-plus days in the 3 years starting 2013 – all of them in 2015 – the GLD saw 14 in 2016, helping grow its bullion holdings 28% from the lowest levels since 2008.
 
Silver’s largest ETF however – the iShares Silver Trust (NYSEArca:SLV) – saw a net outflow of metal as shareholders liquidated stock on 3-month price highs.
 
With no mention of gold meantime, yesterday’s new budget from the government of India disappointed dealers hoping for a cut in India’s 10% import duty and a higher threshold for purchases to need reporting to the tax authorities.
 
Instead, the new Union Budget added 12.5% tax to all silver bullion, including coins, in what finance minister Arun Jaitley’s department called an “anti-avoidance measure” to follow the shock demonetisation of India’s largest banknotes last November.
Chart of India's silver imports. Source: Metals Focus
As tax and curbs on gold imports rose over the last 5 years, India’s silver investment demand rose more than 4-fold, almost matching the United States’ world-leading private purchases of coin and bar before easing back according to data from specialist analysts Metals Focus.
 
The long-awaited decision on India’s General Sales Tax – aimed at unifying and simplifying the system, and likely to bring extra value-added tax to jewelry – is yet to come.

Silver 'Undervalued' vs Gold as Dollar Jumps on US Jobs in Trump Rally 'Part 3'

February 1, 2017
Latest News
SILVER and GOLD PRICES retreated from 12- and 1-week highs respectively against the Dollar lunchtime Wednesday in London, falling as the US currency jumped on news of stronger-than-expected job hiring in January.
 
The private-sector ADP Payrolls report said US employers added 246,000 net jobs last month, well ahead of the 165,000 forecast by analysts.
 
World stock markets had already risen sharply after Eurozone manufacturing saw its best month since 2011 and UK manufacturers reported their strongest January in 3 years on the Markit data agency’s PMI surveys.
 
Copper meantime touched new 2-year highs above $6,000 per tonne after workers at the giant Escondida mine in Chile – owned by BHP Billiton (LON:BLT) – rejected a new wage offer, risking strike action.
 
With government bond prices falling to nudge market interest rates higher, silver touched $17.62 per ounce for the third time in 2 days, while gol held below yesterday’s top of $1215 per ounce. 
 
That pushed the Gold/Silver Ratio of the two precious metals’ relative prices down to 68.75, the lowest value of gold in terms of silver since mid-December.
 
The last 10 years’ average stands at 61.55 ounces of silver to 1 ounce of gold, barely changed from the Feb’ 1997 to Jan’ 2007 average.
Chart of the Gold/Silver Ratio, daily London benchmarks, 2005 to 1 Feb 2017
 
Despite Tuesday’s sharp jump in gold and silver prices, both the SPDR Gold Trust (NYSEArca:GLD) and iShares Silver Trust (NYSEArca:SLV) attracted no new demand for their shares, keeping the quantity of metal held to back the legal trusts’ values unchanged.
 
The GLD has added metal only twice since Donald Trump’s victory in November’s US election, shrinking instead on 33 of those 51 trading days as shareholders liquidated their positions.
 
“We’re in Phase III of the Trump rally,” reckons  Mohamed El-Erian, chief economic adviser at German insurance and asset-management giant Allianz, writing at Bloomberg.
 
“Post election…first US stock markets soared, then they traded in a narrow range. Now [they] have entered a period of greater volatility underpinned by a tug of war between the expectation of reflationary policies and the risk of stumbling into stagflation.
 
“Where we end up will be predominantly a political call.”
 
Trump’s avowedly “reflationary economic policies” mean that real interest rates – after accounting for the rising cost of living – “may stay favourable to gold,” writes Jonathan Butler at Japanese conglomerate Mitsubishi Corporation in the new LBMA 2017 Forecast competition, pointing to “higher inflation [and] increased fiscal spending.
 
“[But] we see the potential for silver to outperform gold,” Butler adds – forecasting a 3.7% drop in gold’s average price but a 6.5% gain in silver for 2017 as a whole – “as investors become cognizant of it being under valued on a relative and absolute long-term basis.
 
“Rising physical offtake will also help silver, especially in the Asian jewellery markets and in the solar photovoltaic sector.”
 
“Gold is one of the few things you should own,” says UK hedge-fund billionaire Crispin Odey, apparently urging clients to stick with his bearish view of equities, UK government bonds and the Pound Sterling after losing half their money in 2016.

London Silver Trading Explodes as Team Trump Attacks Germany & 'Strong Dollar'

February 1, 2017
Latest News
SILVER TRADING in London’s wholesale market saw the metal shoot to an 11-week high at $17.50 per ounce on Tuesday, outpacing gold bullion once again as world stock markets held flat amid headlines that new US president Donald Trump’s chief trade negotiator blames Germany for “exploiting” the weak Euro to boost its exports, fuelling expectations that the celebrity real-estate tycoon will formally end the United States’ so-called “strong Dollar policy” of the last 25 years.
 
With Trump condemned internationally and at home for starting to implement his campaign pledge to restrict immigration by Muslims, Peter Navarro – head of Washington’s new National Trade Council – called the single Euro currency an “implicit Deutsche Mark that is grossly undervalued…[enabling] the German structural imbalance in trade with the rest of the EU and the US.”
 
The Dollar sank on news of Navorro’s comments to the Financial Times, dropping back to last week’s 1.5-month lows against the Euro and reversing all of an earlier spike against the British Pound following a shock drop in UK consumer borrowing for December, with new mortgage approvals missing analyst forecasts.
 
Gold priced in Dollars rose to $1205 per ounce, trading 1.1% higher from last Friday’s finish.
 
But jumping 2.1% higher for the week’s trading so far, silver priced in US Dollars has now gained more than 9% from New Year 2017, adding almost $2 per ounce from December’s 8-month low.
 
New data today said that silver bullion trading through London’s wholesale market – heart of the world’s physical flows – exploded by more than one-third in December to its heaviest level in well over 5 years.
 
The volume of silver traded between the clearing members of the London bullion market have only been larger twice in the last 18 years, first on the sharp spike of April 2006, and then in May 2011, as the metal began a 5-year descent from a record-high monthly average near $42 per ounce.
Chart of London bullion clearers' average daily silver volumes in tonnes. Source: BullionVault via LBMA via LPMCL
Jumping by 38% from November, last month’s silver trading volumes amongst London’s bullion clearing banks outpaced a sharp 9% rise in gold volumes, which jumped to the heaviest level since June 2013 marked the yellow metal’s initial price low from that year’s 25% crash.
 
Only 9 months have seen heavier gold trading volumes through London in the last 10 years on the data supplied by the London Precious Metals Clearing Limited.
 
Typically originating with shipments of large wholesale gold bullion bars from London storage, exports of gold refined into smaller kilobars from Switzerland directly to world No.1 consumer market China last month jumped to the largest level since early 2014 ahead of this week’s Lunar New Year celebrations, according to Swiss trade data.
 
“If we ‘buy’ the [Donald Trump] reflation story,” says the latest trading note from bullion market-maker ICBC Standard Bank strategist Tom Kendall, “we think…silver will outperform gold in 2017
 
“[That’s] partly by virtue of the fact that silver has substantially underperformed its big brother since the bull market ended in 2011/12,” says Kendall.
 
“More fundamentally, we think growth in industrial demand for silver should outpace improving global GDP growth, led by use of silver in electronics (notably in automotive-related applications) and further large investment in solar energy generation.”
 
The quantity of silver needed to back the giant iShares Silver Trust (NYSEArca:SLV) yesterday held at 10,444 tonnes, some 24 tonnes above last week’s 7-month low.
 
A direct reflection of investor demand for SLV shares – which give investors exposure to the silver price but without any physical ownership – that volume equals some 38% of last year’s global mining output on the most recent data from specialist analysts Thomson Reuters GFMS, published in November for the Silver Institute of miners, refiners, manufacturers, dealers and consumers.

Gold Price Bounces on Weak US GDP Data But Failure at $1220 'Significant'

January 28, 2017
Latest News
GOLD PRICES bounced but then fell back to 2-week lows against the Dollar lunchtime Friday in London as the US currency shrugged off weaker-than-expected GDP growth data from the world’s No.1 economy.
 
US gross domestic product grew 1.9% annualized in the fourth quarter of 2016 according to the Bureau of Economic Analysis’ first estimate, missing Wall Street forecasts and falling hard from Q3’s reading of 3.5% per year.
 
Price inflation rose above 2.1% per year for the quarter, led by fuel and food costs – its fastest pace since Q4 2012.
 
Gold prices initially popped $5 but then fell back to $1181 per ounce, heading for their lowest weekly finish in three, some 3.2% beneath Monday’s 2-month highs.
 
European stock markets slipped back after New York’s Dow Jones index recorded another new all-time high above 20,100 points last night.
 
“Resistance [in gold prices] is unchanged at $1220.20…[this week’s] high,” says the latest technical analysis from Canadian-based Scotia Bank’s New York bullion team, still “biased to the upside as long as gold closes above $1183.”
 
$1220 also represents the 38.2% Fibonacci retracement of the gold price’s July 2016 high to December low, says Jonathan Butler at Japanese conglomerate Mitsubishi, pointing to a pattern used by many technical analysts to spot trend reversals.
 
“[So] we view this failure to breach $1220 as significant, all the more so since gold has now broken out of the strong uptrend channel that has prevailed since late December.
 
“More significantly [still], the 10 year US Treasury yield continues to show every sign of breaking out of its 30-year downtrend,” Butler adds, noting that even German Bund yields have hit 12-month highs as bond prices have fallen – “a further sign of how pro-risk the market has become.”
 
Weekly chart of 10-year US Treasury bond yields
 
With China’s gold and other financial exchanges shut Friday for the start of tomorrow’s Lunar New Year celebrations, “The gold market was on the offer at the open,” says the Asian trading desk of Swiss refiners and finance group MKS, as dealers looked to sell.
 
“There is continued downward pressure in the precious metals sector,” says a note from German financial services group Commerzbank’s commodities analysts, pointing to “a firmer US Dollar, rising stock markets and higher bond yields.
 
“Silver is being pulled down with gold.”
 
Gold holdings to back the giant GLD gold ETF trust fund ended Thursday unchanged at an 8-month low, but the iShares SLV silver ETF shrank by 74 tonnes – almost a whole day’s global silver mining output – as shareholders liquidated their positions.
 
That took the SLV down almost 9% from last fall’s near record-high holdings, then equal to more than two-fifths of annual silver mine production worldwide.
 
Meantime in India – the world’s No.2 gold buying nation after China – “Wedding season demand has improved,” the Reuters news-wire quotes wholesaler Harshad Ajmera at J.J.Gold House in Kolkata. 
 
“The price correction is also luring in customers.”

Dow/Gold Ratio Near 9-Year High, 'Up, Up!' Says Trump as Dow 20,000 Sees GLD Below 800 Tonnes of Bullion

January 27, 2017
Latest News
GOLD BULLION fell to new 2-week lows in London trade Thursday, as world stock markets pushed higher following the new record close above 20,000 for New York’s Dow Jones Industrial Average.
 
Rising 26% over the last 12 months, the Dow has accelerated its gains since Donald Trump won November’s election as US president.
 
Having called the US stock market’s 8-year rise a “big, fat, ugly bubble” in a debate with Hillary Clinton last September, “I’m very proud of it,” said Trump in an interview overnight, also tweeting his approval. 
 
“Now, we have to go up, up, up; we don’t want it to stay there.”
 
Comparing the relative value of gold against the US stock market, the Dow/Gold Ratio ticked higher as equities rose and bullion fell, rising back towards December’s 9-year high of 17.
 
Bottoming at barely 2 ounces of bullion per unit of the Dow Jones Industrial Average as the Great Depression hit in the early 1930s, the Dow/Gold Ratio rose steadily following WWII, before making a new low near 1.0 in early 1980 as the stock market sank and gold soared amid the strongest peace-time inflation on record.
 
Over the following 20 years gold bullion then lost 97% of its value in terms of US equities as measured by the DJIA, before rising six-fold – with the Dow/Gold Ratio falling – to the 2011 peak of the global financial crisis.
Chart of the Dow/Gold Ratio 1901-2017, month-end data, from BullionVault
 
As gold prices fell below $1200 in the spot market yesterday, bullion needed to back the giant SPDR Gold Trust (NYSEArca:GLD) dropped below 800 tonnes for the first time since March 2016 as shareholders liquidated stock.
 
Prices on the Shanghai Gold Exchange today fell to 2-week lows versus the Yuan as trading volumes quietened ahead of tomorrow’s start to the week-long Chinese New Year holidays.
 
The US Dollar meantime pushed both the Euro and British Pound back from better than 1-month highs on the FX market as commodity prices rose with major government bond yields.
 
Ahead of Friday’s US gross domestic product data for the end of 2016, new figures from the UK today said the world’s 5th largest economy grew its GDP by 2.2% annualized in the fourth quarter, just beating analyst forecasts.
 
“The Dollar is likely to remain a substantial headwind to further price rises,” says the latest quarterly market data and analysis from specialists Thomson Reuters GFMS, “at least in the first half of 2017.
 
“Furthermore, there are few indications that physical demand from Asia is set to pick up just yet.”
 
With European elections from the Netherlands to France, Germany to Italy likely to put the 19-nation Eurozone currency union center stage, however, “There is a growing likelihood of safe haven flows” back into gold bullion GFMS goes on.
 
Also highlighting possible volatility from US President Trump’s “more unorthodox approach” to politics, GFMS now forecastis an annual average in gold bullion of $1259 per ounce in 2017 – unchanged from 2016’s 2-year high.

Gold Bars' Demand in China Jumps as Yuan Falls, No.1 Miner for 10th Year

January 26, 2017
Latest News

GOLD BARS traded in London’s wholesale market dropped near $1200 per ounce on Wednesday, retreating 1.5% from Monday’s new 9-week highs even as the US Dollar fell hard on the forex market while world equity indexes rose sharply.

Hitting new 10-week lows against the Chinese Yuan, the Dollar held firm versus the Euro but hit fresh 1-month lows against the “commodity currencies” of New Zealand and Australia.

The British Pound rose to its highest level since mid-December at $1.26 – pushing the price of wholesale gold bars down to 2-week lows beneath £960 per ounce for UK investors.

As this weekend’s start to the Chinese New Year holidays approached, Shanghai premiums for wholesale gold bars slipped below $9 per ounce versus London quotes, the smallest incentive to new imports since early November.

“The international influence of China’s gold industry is growing,” says Song Xin, President of the China Gold Association, in an address to CGA members urging them to “deepen the reform of last year [with] the five development concepts of ‘innovation, coordination, environmental care, openness and sharing’ put forward by [Communist Party] General Secretary Xi Jinping” in the coming Year of the Rooster.

China’s gold mining output has now led the world for 10 consecutive years while its gold consumption has led for 4 years, says Song, citing new data published by the CGA on Wednesday.

Demand for gold jewelry sank 19% last year to 611 tonnes on the CGA’s figures, but investment in gold bars and coins rose 29% to almost 289 tonnes.

Despite an overall drop of 7%, that most likely helped China’s total household purchases outstrip India for the 4th year running, accounting for perhaps 1 ounce in every 4 sold worldwide.

The Yuan currency fell almost 7% in 2016 against the Dollar to hit new 8-year lows in December.

China’s domestic gold mining output meantime held the No.1 spot won in 2007, creeping 0.8% higher to 453 tonnes after falling for the first time since 1999 in 2015 on the CGA’s update.

Globally, 2016’s gold mining output was set to show its first drop since 2008 according to a November update from specialist analysts Thomson Reuters GFMS.

Overtaking the United States in 2015, gold mining output from Russia “[will] surely maintain the third position after China and…very close to Australia,” said chairman of the Union of Gold Producers of Russia (UGPR) Sergey Kashuba last month.

Minister of Natural Resources Sergei Donskoi told the TASS news agency at New Year that Russia mined 293 tonnes of gold in 2016 – a massive 9% jump from the previous year’s confirmed record high.

With new US president Donald Trump vowing to “build that wall!” to try and reduce illegal immigration from Mexico, “We have a negative US Dollar view,” Bloomberg News quotes Swiss bank UBS’s wealth-management team in Singapore, advising clients to consider gold as a hedge against “the [extra] debt that Donald Trump promises through higher infrastructure and lower tax…clearly [a] negative for the currency.”

Investment through the giant SPDR Gold Trust (NYSEArca:GLD) – backed by large gold bars – however fell once more on Tuesday, retreating even as bullion prices touched new 9-week highs at the benchmark price auction in London.

The largest silver-backed ETF – the iShares Silver Trust (NYSEArca:SLV) – also shrank Tuesday, with investors liquidating almost 30 tonnes’ worth of shares.

That took the SLV’s holdings back to a new 7-month low of 10,494 tonnes, equal to some 32% of silver’s total global demand in 2016.

Gold Bullion's Rally Fails to Grow GLD Yet Again as UK Supreme Court Confirms Article 50 Ruling on Brexit

January 24, 2017
Latest News
GOLD BULLION retreated from new 2-month highs against the Dollar in London trade Tuesday as the UK Supreme Court confirmed that the British Parliament must vote on the Article 50 trigger for starting Brexit.
 
Western stock markets rose with commodity prices, and silver bullion prices held little changed at $17.13 per ounce.
 
The Pound whipped 1 cent versus the Dollar on the UKSC’s judgement before holding below $1.25, unchanged from a month ago and more than one-fifth lower from the eve of last June’s UK referendum on leaving the European Union.
 
That kept the price of gold bullion in British Pounds at £970 per ounce, down 1.3% from last Friday’s 10-week closing high.
 
In Dollar terms, gold bullion had earlier touched $1220 per ounce for the first time since 22 November at the start of Asian trade.
 
Shanghai gold premiums over comparable London quotes slipped below $10 per ounce at China’s benchmarking price auction, still 4 times the average incentive offered to new imports of bullion, but well below last month’s $40 three-year highs.
 
A favored vehicle amongst US fund managers wanting gold-price exposure, the giant SPDR Gold Trust (NYSEArca:GLD) shrank in size Monday even as gold bullion prices rose, the 7th such day in 14 sessions so far in 2017.
 
The GLD has now shrunk by almost one-fifth after swelling to a 3-year record immediately after the UK’s Brexit referendum result in June 2016.
Chart of GLD gold ETF's bullion holdings vs. metal prices
 
“Resistance is unchanged at $1230.30,” reckons the latest technical analysis of gold price charts from Canada-based bank and bullion market maker Scotia Mocatta’s New York office, pointing to “the 50% Fibo retracement level of the Nov high [to] Dec low.
 
“Support comes in at $1203.70,” it adds, pointing to the 400-day moving average of gold bullion’s daily price, saying that the charts “remain bullish gold, targeting $1255.70” short term.
 
Finding support last month at $1125, gold priced in Dollars “has staged expected rebound and the recovery should persist further towards $1242-1248,” says the technical analysis team at French investment bank Societe Generale, “and even towards an ascending trend at $1278.
 
“Short term though, a consolidation is likely between $1220 and $1196.”
 
Here in London meantime, “The referendum is of great political significance,” said the UK Supreme Court today, voting 8-to-3 that for the Government to trigger Article 50 without a vote in Parliament “would be a breach of settled constitutional principles.”
 
The so-called “Sewel Convention” on the devolved powers of Scotland, Wales or Northern Ireland is not however “a legal obligation,” the Court found, and so the devolved legislatures have no power to veto Article 50 once approved by the national UK Parliament in London.
 
“Labour respects the result of the referendum and the will of the British people and will not frustrate the process for invoking Article 50,” said a statement from opposition Labour Party leader Jeremy Corbyn, but he “will seek to amend the Article 50 Bill to…build in the principles of full, tariff-free access to the single market and maintenance of workers’ rights and social and environmental protections.”
older newer