GOLD INVESTMENT prices slipped to 3-session lows beneath $1270 per ounce in London trade Tuesday, retreating 1.4% from yesterday’s 1-week high as Western equities failed to follow China’s stock market higher.
Silver also erased Monday’s pop higher, trading unchanged in Dollar terms from the end of last week at $17.13 per ounce.
“Major lows achieved across the complex,” says a new chart book from the technical analysis team at French investment and London bullion bank Societe Generale – calling December 2015’s gold price low a “major bottom” at $1045 per ounce.
“Short term though, a shaky configuration [is] expected.”
“We are confident,” agrees the new Commodities Quarterly from Chinese-owned ICBC Standard Bank’s strategists in London, “in stating that the lows for this cycle are behind us for all precious metals. The bears have returned to hibernation.
“[But] while Western investment demand for gold has been robust so far this year, physical demand from Middle Eastern, Indian and Asian markets has not.”
“That matters,” the debate heard, because it exposes gold prices to some of the $250 trillion in total global wealth
, rather than just the $150-200bn consistently spent each year by jewelry consumers, coin and bar investors, and other regular buyers.
Despite gold prices rising at the fastest pace in 30 years during Q1, hedge-fund giant Paulson & Co. cut its holding of shares in the giant SPDR Gold Trust (NYSEArca:GLD) by 17% as some of the group’s investment products lost 15% of their value
, regulatory filings show.
“Demand from Asia [meantime] is as weak as I’ve ever know it,” said one precious metals strategist on Monday.
“China and India are deathly quiet,” confirmed a secure logistics executive separately to BullionVault, with gold and silver shipments into those major demand centers “as good as zero” so far in 2016 compared with recent years.
China’s new benchmark Shanghai Gold Price today
showed a discount to London wholesale prices for the third time since its launch a month ago, with demand and supply concentrated at a Dollar equivalent price some 80 cents cheaper per ounce.