Gold Bullion Slips Below 'Multi-Year Downtrend' vs Dollar as GLD Swells Fastest Since 2010 Euro Debt Crisis

in 24-05-2016

GOLD BULLION slipped through what several analysts and traders called key support at $1243 per ounce in London on Tuesday morning, extending its drop from early May's 15-month high to almost 5% as world stockmarkets rose.   The Dollar rose to 2-month highs versus the single Euro currency as the Eurozone's 3rd wealthiest nation, Austria, confirmed the narrow election victory of left-wing Green Party-backed candidate Alexander Van der Bellen as president over right-wing Freedom Party chief Norbert Hofer.   That curbed the drop in Euro gold bullion prices to 2-week lows at €1109 per ounce.   French prime minister Manuel Valls, visiting Israel, was one of several senior Eurozone politicians to express what he called his "relief at seeing Austrians reject extremism and populism."   New data in the UK – where Bank of England governor Mark Carney today clashed with Eurosceptic politician Jacob Rees-Mogg over his bank's stated view of the economic risks should Britain vote to leave the European Union next month – meantime showed government borrowing falling last month from April 2015, but rising above analyst forecasts.   Gold bullion priced in Sterling slipped below £850 per ounce in wholesale London trade for only the 4th time since rising through what was then a 13-month high in February.   "Gold is now probing a multi-year descending trend near $1243," says technical analysis of weekly Dollar-price charts from French investment and bullion bank Societe Generale, "which also corresponds with the 23.6% retracement of the recent recovery" – a so-called Fibonacci level some analysts watch.   "If we drop down to daily chart, gold is now close to the median of an upward channel drawn since February [also] at $1243.   "A break below...will mean possibility of a deeper down move...with next support at March lows of $1206/$1190."   "There appears to be good demand for gold at $1243-44," says a note from the Australian offices of Swiss refiners MKS, commenting on physical trading in Asia overnight.   "It will be interesting to see whether this level will prove to be a triple bottom. [But] if [gold] does break through convincingly, there could be a fresh wave of liquidation."   There was no liquidation in gold Monday, but further buying in the SPDR Gold Trust (NYSEArca:GLD) instead, with the world's largest exchange-traded gold-backed trust fund needing to add gold to its holdings 14 times in the last 20 trading days.   That pattern has been seen only twice since the GLD launched in November 2004, first as global stockmarkets hit 13-year lows following the collapse of Lehman Brothers in late-2008, and then as the Greek debt crisis broke in summer 2010.   Latest data for US gold futures and options meantime show speculative "non-commercial" traders retreating only a little last week from the largest bullish position, net of that group's bearish bets, on record.   In Dollar terms, the notional value of that "net spec long" position was last this great in late 2012, when gold prices traded at $1750 per ounce.   "Once again we made lower highs and lower lows," says a technical note on Monday's trading action from the New York bullion desk of Canada's Scotiabank.   "[That] has now occurred over the last 5 trading days" – something which will mark gold's longest run of daily drops since November's approach of new 6-year lows if repeated Tuesday, says the Reuters news and data agency.

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Gold Bullion -1.5% for Week as Fed Points US Rates Higher, But ETF Investing Expands Again

in 20-05-2016

GOLD BULLION prices slipped from a morning rally in London trade Friday afternoon, heading into the weekend $10 per ounce above yesterday's 3-week low as world stock markets rallied from new 6-week lows.   The price of gold bullion still held 1.5% down for the week as the Dollar rose further following Wednesday's news that the US Federal Reserve will "likely" raise US interest rates at its June meeting.   Exchange-traded trust funds tracking the gold price expanded again, however, with shareholder demand needing another 15 tonnes over the last week to back the giant SPDR Gold Trust (NYSEArca:GLD) – now back to its largest size since November 2013.   "Some investors have clearly been viewing the lower price level as an attractive opportunity to buy," says the commodities team at German financial services group Commerzbank.   "This should protect the gold price from any further slide. We are confident that it will stabilise at roughly its present level."   But "gold's rally has now started to fade," says strategist Jonathan Butler at Japanese conglomerate Mitsubishi, "and elevated gold COMEX [derivatives] longs and new ETF positions may not prove to be all that sticky if 'risk-on' mentality returns.   "It is hard to see what the catalyst for another big move higher across the precious complex will be, unless the Fed pushes out rate expectations again or...an extension of monetary stimulus at other central banks."   Betting on US futures contracts now puts the odds of Fed rates reaching 1.0% from the current 0.50% by the September meeting at nearly 1-in-5 – up from just 1-in-50 a month ago.   Ten-year US Treasury yields held at the highest level so far in May at 1.87%, markedly above the 33-month lows hit in early February.   Looking at the technical picture, "The strength in the USD was a catalyst," agrees Swiss refining group MKS's Asian trading desk, "[but] there were also several significant technical levels which were breached which exacerbated the move.    "The mid/late session recovery technically keeps gold above the medium-term uptrend."   "The momentum indicator is showing signs of weakness," counters a technical note from London bullion bank Scotia Mocatta's parent Scotiabank's New York office, "and [the] current view on gold is bearish, confirmed by [Thursday's] close below $1256.   "Support now comes in at $1243...and the next downside target is in the $1205...area."   Commodities meantime bounced Friday from their sharp mid-week sell-off on the US Fed's latest meeting notes, but silver held only at $16.54 per ounce, down 3.3% from last Friday and heading for its lowest weekly finish since mid-April.   China's new gold bullion pricing benchmark had earlier fixed on Friday afternoon in Shanghai unchanged from Thursday, but 1.1% down for the week in Yuan terms.   Shanghai's premium over spot quotes for London delivery rose above $3 per ounce, doubling this week's previous average incentive to new imports from the world's central gold dealing hub.   World No.2 gold bullion consumer nation India meantime "suddenly seems to be losing appetite," says an article at the Economic Times from fund manager Chirag Mehta, noting weak demand data for Q1.   "This could be on account of reduced space towards discretionary spend as the economy tries to recover from lower growth and the end effect of two years of back-to-back droughts."

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Gold Prices Sink as US Fed's George Replays Lacker's Double Dissension Before Dollar Rate Hike

in 19-05-2016

GOLD PRICES dropped to their lowest Dollar level in almost 3 weeks on Thursday, as the US currency rose but everything else fell after yesterday's minutes from April's Federal Reserve meeting said a June rate-hike looks "likely appropriate".   World stock markets today followed New York's sharp drop lower on the news, with betting on US interest-rate futures jumping to put the odds of a June hike above 1-in-3.   That's up from below 1-in-20 at the end of last week.   Gold priced in other currencies fell less quickly, but silver sank below $16.40 per ounce, down more than a dollar from Monday's high, while gold traded 3.5% lower against the US currency from that peak.     The Euro currency Thursday fell to its lowest level since 29 March against the Dollar at $1.11, while commodity prices dropped over 1.6% by mid-afternoon in London.   US government bond prices fell far enough to drive 10-year yields up to 1.87%, erasing all of May's previous drop to 1.71%, as all other major-developed and emerging-market debt prices dropped.   Brazil's 10-year bond yields jumped 0.25 percentage points to their highest level in 4 weeks at 12.85%.   "Gold [is] the most responsive commodity to changes in Fed interest-rate hike probabilities," found a new research paper last week from French investment and bullion bank Societe Generale.   "Obviously the possibility of a rate rise in June is very much beholden to US economic figures,"says David Govett at London brokers Marex Spectron.   But "gold [on Thursday] broke a one month uptrend line at around $1270, and almost immediately dropped to a low of $1255" before dropping further to $1244 per ounce.   That level marked a 12-month high for Dollar gold prices when first seen on the way up in early February 2016.   Shanghai's new daily benchmark gold price had already dropped 1.4% from Wednesday, hitting its lowest 'fix' since 28 April even as the Yuan fell versus the Dollar.   "Most participants," said the Fed's minutes of April's US policy meeting, "judged that if incoming data were consistent with economic growth picking up...labor market conditions continuing to strengthen, and inflation making progress toward the 2% objective, then it likely would be appropriate...to increase the target range for the federal funds rate in June."   One member of the FOMC's 10-person committe voted against the consensus, with the Kansas City bank's president Esther George calling for the second meeting in succession to raise rates by 25 basis points.   The same lone dissent from the consensus was previously made in September and then October 2015 by Richmond Fed president Jeffrey Lacker, now a non-voting member until 2018.   US investors are holding the most cash as a proportion of portfolios in almost 15 years, according to a survey from the BAML financial services group.   Having been a voice of just one, Lacker's double dissension was followed in December by a unanimous vote to make the first hike to US rates in over a decade.   India's largest refiner, MMTC Pamp, meantime said demand for gold bullion is so poor in the world's second-largest consumer nation that it is suspending production   "It is absolutely reflecting the current climate," London-based news providers Fast Markets quote an Indian analyst, "which is not at all conducive for smelting at this moment...It's in bad shape."

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Gold Investment Surge 'Marks Major Price Low' But India & China Demand 'Dead' So Far in 2016

in 17-05-2016

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."   "US wealth-management allocations to gold have risen in 2016," said one precious metals strategist at Monday night's Bulls vs Bears Debate for the Association of Mining Analysts in London, sponsored by MoneyWeek magazine and gold retailer Sharps Pixley.   "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.   Paulson & Co. has used GLD shares to offer clients "gold-denominated" shares in its funds since 2009.   Hedge fund legend George Soros' group, in contrast, bought almost as many GLD shares between January and March as Paulson & Co. sold, rebuilding an exposure to gold price movements slashed just ahead of the Spring 2013 gold crash.   "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.   India's trade deficit fell to a 5-year monthly low in April, new data said last week, reduced by a collapse in bullion inflows extending what analysts already called a "pitiful" first quarter for Indian gold demand, when consumer purchases fell 39% from the same period last year, according to data compiled for mining-backed market development organization the World Gold Council.

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Gold Price Trades Up to 2016 Highs as China's ICBC Expands Bullion Banking with Barclays Vault

in 16-05-2016

GOLD PRICES rose to 1-week highs in London bullion trade Monday, touching $1288 per ounce as China's stock markets held flat overall but New York equities pointed lower with UK shares as half of Europe stayed shut for the Whit Monday holiday.   Silver just outpaced the rise in gold prices, gaining 1.2% from the close of Friday's US trade but only to two-session highs of $17.38 per ounce.   Recovering 2.4% from last week's lows versus the Dollar, the gold price also rose against all other major currencies, reaching the highest level against the Euro at €1135 since March's retreat from 13-month highs.   Gold priced in Sterling rose above £895 per ounce, a two-and-a-half year high when first reached in February.   "The acquisition of a precious metals vault allows us to expand our services in clearing and processing," said ICBC Standard Bank's head of commodities Mark Buncombe on Monday, commenting on news that the bullion and raw materials division of the world's largest bank, ICBC (HKG:1398), is buying the precious metals dealing and storage business of the UK's Barclays Bank (LON:BARC).   A clearing member of the London Bullion Market Association since 2005, Barclays built its vault with help from the UK division of security specialists Brink's Inc (NYSE:BCO), opening it in 2012.   That year also saw fellow clearing and market-making member Deutsche Bank (ETR:DBK) launch a London vault, built with help from UK security firm G4S (LON:GFS). But the German financial services group put those facilities up for sale – apparently without success so far – as it quit the bullion market in 2014 following a series of compliance and regulatory scandals.   ICBC became an ordinary member of the LBMA in 2011, buying its Standard Bank division in 2015, before moving to a market-making member – quoting buy and sell prices throughout London hours – this April, joining the daily benchmark LBMA Gold Price process at the start of this month and announcing its move to a clearing member last week.   "This enables us to better execute on our strategy to become one of the largest Chinese banks in the precious metals market," said Buncombe on Monday.   London is the center of the world's wholesale bullion trade, with the UK importing more gold than any other countries than China, India or Switzerland and exporting almost as much over the last 5 years despite having zero mine output, large-bar refining or consumer demand.   Secure storage of wholesale Good Delivery gold bars in London's recognized vaults costs as little as 0.10% per year, insurance included.

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Gold Investment 'Bullish' But Asian Demand Poor as Dollar Up, US Fed 'Should Hike'

in 13-05-2016

GOLD INVESTMENT prices held in a $10 range Friday morning in London, trading at $1271 per ounce as the New York opening approached and European stock markets erased earlier losses once again.   Heading for a 1.3% week on week drop against the Dollar, gold bullion fared better against all other major currencies except the Swiss Franc.   Losing 0.8% from last Friday's finish against the Euro, investment gold in wholesale bars traded unchanged vs. the Australian Dollar, and rose slightly vs. the Japanese Yen.   Japanese shares, however, rose 1.9% for the week on the Nikkei index.   New York's S&P index headed for a slight weekly drop, trading flat from the end of 2015.   Gold bullion, in contrast, has gained 20% versus the US Dollar so far in 2016.     "The market remains too pessimistic about the fundamental strength of the US economy," said Federal Reserve voting member Eric Rosengren in a speech overnight.   "[Should] the economic data confirm these trends," he went on, "it will be appropriate to continue the gradual normalization of monetary policy" following the US central bank's first hike to 0.0% interest rates in 7 years last December.   "If market thinking moves closer to Mr.Rosengen's scenario," says a note from global retail, investment and London bullion bank HSBC, "gold prices may weaken."   "I'm not a gold bug. I don't think the world is coming to an end. But I do think inflation is beginning to pick up," said US trader and newsletter publisher Dennis Gartman to CNBC, "turning fundamentally bullish" on gold in Dollar terms.   "It's time to sell the dollar like it's going out of style," says US finance website MarketWatch.   Looking at yesterday's new Q1 gold market trends report from the mining industry-backed World Gold Council, "We hardly expect to see a repeat of [Jan-March's] strong investment demand," says a note from German financial group Commerzbank.   Exchange-traded trust funds worldwide needed 23% more gold to back the value of their ETF shares at the end of March than at New Year 2016, the fastest quarterly addition since the global financial crisis of Q1 2009.   "[Now] jewellery demand, which is generally regarded as more stable, should pick up again," says Commerzbank, "meaning that the gold price should be well-supported in the medium term."   Gold jewelry demand from top two consumer nations China and India collapsed by more than 27% in Q1 from the same period last year, the World Gold Council's data said Thursday.   "As a Chinese tradition, gold jewelry sets are used for weddings," the China Daily today quotes World Gold Council manager Wang Lixin, "but for younger generations, I'm not sure whether they would like to keep that tradition.   "They prefer jewelry that can represent themselves, something customized and personalized" which typically means lower caratage than the 0.999 fine Chuk Kam standard.   While India's monsoon rains are now forecast to reach all parts of the sub-continent by July, the recent drought, plus two consecutive years of poor monsoon rains, are estimated to have cost the economy INR 650,000 crore (US$97 billion) according to a new study from Assocham (Association of Chambers of Commerce).   "The lack of strong physical demand in Asia right now," wrote Japanese conglomerate Mitsubishi's strategist Jonathan Butler this week, "[plus] perhaps overly bullish investor positioning, puts gold in danger of a short term correction or at least a period of consolidation."

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Gold Demand 'At Record in Q1' But 'Uncertainty Abounds' on Jobs, Brexit, No.1 China Jeweler's Profits Warning

in 12-05-2016

GOLD DEMAND and supply through London trade saw prices pop 0.6% higher lunchtime Thursday, rising to $1273 per ounce after new data showed US jobless benefits claims rising more than expected last week.   Asian and European stocks markets meantime recovered earlier losses after New York closed lower overnight, while US government bond prices edged lower, nudging interest rates higher.   UK government bond prices also slipped, pushing 10-year Gilt yields up to 1-week highs at 1.42%, after the Bank of England held its key rate at a record low of 0.5% for the 86th month running, and governor Mark Carney called a yes vote to Brexit at next month's referendum on European Union membership the biggest risk to the economy.   Gold priced in Sterling failed to rise above £880 per ounce however as the Pound then rallied versus the Dollar following the US jobs news.   The balance of gold supply and demand concentrated at Thursday's new Shanghai Gold Price benchmark earlier found a clearing price at CNY266.50 per gram – more than halving the equivalent premium over spot London quotes from yesterday to $1.80 per ounce.   Chinese-owned ICBC Standard Bank – a division of the world's largest bank – said Wednesday that it is joining the not-for-profit London Precious Metals Clearing Ltd, a group of 5 banks who provide clearing services to the world's central gold and silver market.   "The clearing of bullion in London is an essential element in the settlement of trades between counterparties from all over the world," said ICBC Standard Bank's chairman Mingqiang Bi, saying the move "further expands and enhances our commodities heritage, capabilities and expertise...recognis[ing ICBC] as a leading player in this market."   Global gold demand reached a near-record level between January and March, mining-backed market development organization the World Gold Council said Thursday, citing data estimates commissioned from specialist analysts Metals Focus.   This contrasts with last month's estimates from competitor analysts Thomson Reuters GFMS, who provided data to the World Gold Council until 2014. They said a fortnight ago that Q1 jewelry, coin and bar demand fell to the lowest combined level since the global financial crisis of Q1 2009 – back when the US central bank cut its key interest rate to 0% and began QE bond purchases in a bid to stem the collapse of asset prices, with the S&P500 index of US-listed companies hitting 13-year lows.   What TR-GFMS call "physical demand" excludes flows into or out of exchange-traded trust fund products (ETFs) and futures-exchange inventories. But including those figures, today's World Gold Council data put global gold demand 17% ahead of GFMS's estimate overall, with jewelry demand 29% larger, central-bank purchases 19% larger, and retail investment demand for small bars and coin 15% ahead.   "Shifts in the global economic and financial landscape," says the World Gold Council's own analysis of the Metals Focus data, led by head of market intelligence Alistair Hewitt, "have created a positive environment for gold investment in recent months.   "Uncertainty abounds."   China's largest jewelry manufacturer and retailer, Chow Tai Fook (HKG:1929), issued a profits warning Thursday, advising the Hong Kong stock market that it made 40-50% less in the 12 months ending 31 March from the previous year.   "The decrease [in profit]," said the Chow Tai Fook board, "is mainly attributable to...weak consumer sentiment in Greater China...and reduced gross profit margin...due to [an] unrealised hedging loss on gold loans and [a] change in the product mix, with increased sale of gold products" offering lower profit margins.     The World Gold Council report's data put global gold jewelry demand down at a 4-year low in the first quarter of 2016.   "China's relatively anaemic economic performance weighed on consumer sentiment," it says, "while a supply-side crunch further hampered China’s jewellery market" as a new national hall-marking standard, starting this week, required all gold jewelry of 99% purity to be stamped 'Chuk Kam' –  literally "pure gold", a standard previously reserved only for items 99.9% fine.

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2016年第一季度黄金需求增长21%创历史新高,归因于投资者大幅增持黄金ETF

in 12-05-2016

世界黄金协会(World Gold Council)最新发布的2016年第一季度《黄金需求趋势报告》数据显示,本季度全球黄金需求量达1,290公吨,同比上涨21%,成为有史以来需求量第二高的季度。这主要由于投资者对脆弱经济和不确定金融形势的担忧,促使其在本季度大幅增持黄金ETF。同时,受金价走高、印度行业罢工行动以及中国经济疲软的影响,许多消费者对于金饰购买持观望状态,第一季度全球金饰需求下跌19%。 2016年第一季度黄金ETF增持364公吨,同比2015年的26公吨,本季度成为2009年第一季度以来需求量最高的一个季度。由于欧洲和日本市场的负利率政策,加之中国经济的不确定性以及对于美联储加息放缓的预期和全球股票市场的波动,黄金的分散风险的功能得到了很好的体现。 本季度金条与金币需求量达254公吨,同比小幅上涨。需求在价格敏感型市场的疲软走势被其他地区的增势所抵消。...

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Gold demand at record levels in Q1 2016 - up 21% as investors surged into ETFs

in 12-05-2016

Global gold demand reached 1,290 tonnes (t) in the first quarter of 2016, a 21% increase compared to the same period last year, making it the second largest quarter on record, according to the World Gold Council’s Gold Demand Trends report. This increase was driven by huge inflows into exchange traded funds (ETFs), fuelled by investor concerns regarding economic fragility and an uncertain...

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