GOLD PRICES held flat in quiet London bullion trade Thursday, lagging a 2% rise from new multi-year lows in copper and platinum as European stock markets gained over 1%. With US markets shut and US economic data suspended for Thanksgiving, "This isn't like watching paint dry," said one London bullion trader. "It's like watching dry paint." Gold moved in a tight $5 range around $1070, but silver was stronger, spiking 1.3% at lunchtime to hit a 1-week high of $14.39 before easing back to trade 8 cents higher for the week so far at $14.27 per ounce. Major European bond prices rose, edging yields lower. Following the downing of a Russian fighter jet near the Turkish-Syria border on Tuesday, Moscow meantime tightened controls on imports of food from Turkey, citing regulatory data. Interest in the LBMA Gold Price auction – the twice-daily benchmarking process now regulated by UK authorities and administered by trading-exchange providers ICE – fell once more, dropping to one-fifth of the Q3 average as the afternoon run found a clearing price at $1071 per ounce. "We remain mildly bullish on gold prices," Canada's Financial Post quotes bullion-bank and market-maker HSBC's analyst James Steel, "but the bounce has taken longer than we had anticipated. "We believe that 2016 could see a more decisive recovery. Emerging market demand has already set a floor for gold prices, and we think buying from India and China is likely to increase." Gold's price drop below $1080 saw "physical buying pick up notably," says Chinese-owned investment and bullion bank ICBC Standard Bank, as "Indian wholesalers started restocking and...Chinese importers saw the Shanghai-London arbitrage widen out to more than $5 per ounce for the first time since the summer. "However, there are already signs that some of that opportunistic, price sensitive demand for bullion is easing off." "The physical market is unlikely to offer sentiment support," adds HSBC's fellow bullion market maker Barclays, saying that "Chinese demand has been mediocre, while in India the government is actively reining in gold imports via policies such as the Gold Monetization Scheme." India's key Q4 gold demand – capturing the peak Diwalia and wedding season – could hit the lowest level in 8 years, says a Reuters report, citing an estimate of 150-175 tonnes from , All India Gems & Jewellery Trade Federation director Bachhraj Bamalwa. That would mark perhaps a drop of one-third from the half-decade average. Following the poor launch of India's bid to "monetize" existing private gold holdings and use them to meet future demand, the sub-continent's wealthiest Hindu temple – Tirumala Tirupati Deveasthanams – said today its investment panel "will meet soon to take [a] decision" on joining the new scheme. TTD said in August it already held 4.5 tonnes of gold on deposit with commercial banks, and was adding another tonne. To date, the Gold Monetization Scheme has gathered less than half-a-kilo from the sub-continent's estimated 20,000 tonne private holdings. Gold imports to China meantime retreated in October from a 10-month high, latest data show, dropping below 76 tonnes. That still held year-to-date gold imports to China through Hong Kong at 99% of January-to-October 2014, recovering from spring 2015's earlier 25% year-on-year drop. Separate customs data from Switzerland – the world's No.1 gold bar refining center – already show October was the strongest month in 7 for gold exports direct to the Chinese mainland, where gold is now being landed in Beijing and Shanghai.
GOLD PRICES retreated towards last week's near-6 year lows in London trade Wednesday, unmoved by worsening tensions between Turkey and Russia over Syria as bond prices slipped ahead of next month's interest-rate decision from the US Federal Reserve. Global trade body the London Bullion Market Association today reported a "strong, positive response" on Wednesday to its request for proposals from trading exchanges, technology firms, brokers and data vendors aimed at aiding growth, lower costs and boosting liquidity in the wholesale gold business. Wednesday afternoon's run of the LBMA Gold Price auction – the 100-year old benchmarking process now formally regulated by UK authorities and administered by exchange-providers ICE – saw demand and supply volumes of just over half the third-quarter average. Formerly known as the "Fix", the process cleared at a price of $1068 per ounce – only 25 cents above last Wednesday's new 69-month low. With the Kremlin meantime confirming the death of one pilot but the safe return of the other from Tuesday's downing of a Russian fighter jet by Turkey, Moscow today deployed "one of its largest air defense ships at the foot of Turkish territorial waters in the Mediterranean," Turkey's Hurriyet newspaper reported online. France's Institute of Statistics & Economic Studies said today that consumer confidence had held stable ahead of the Paris terror attacks this month. "Following the headlines that Turkey had shot down a Russian jet," notes Swiss refining and finance group MKS, "gold finished higher for only the second time this month. Trading volumes are now "likely to reduce significantly," it adds, because of Thursday's US Thanksgiving holiday. "A more pronounced price rise," says German investment, retail and bullion-dealing bank Commerzbank, "is being blocked by the growing expectation of a December rate hike by the US Federal Reserve." Interest-rates betting in the futures market now puts the likelihood of a Fed rate rise next in December – the first move from 0-0.25% in 7 years – at 75%. The European Central Bank, in contrast, will expand its QE bond buying and cut its Euro deposit rate further below zero when it meets next month, according to a poll of more than 50 economists by Reuters. "Any interest rate move [by the Fed] has been so effectively telegraphed that it should already be priced into the gold market," says George Milling-Stanley, gold investment strategist at State Street Global Advisors, the marketing agents for the giant SPDR Gold Trust (NYSEArca:GLD). "The internal market fundamentals...have begun to reassert themselves [after] the bubble that developed in gold prices in 2011 and [its] subsequent bursting in 2012 and early 2013. "There is good support at the bottom end of the trading range [at $1050]." Once the world's largest exchange-traded trust fund at its peak in 2011, the GLD ETF ended Tuesday with the number of shares outstanding at a 7-year low, needing 655 tonnes of gold bullion in backing – the smallest quantity since Lehman Brothers collapsed in September 2008.
Gold Bullion 'Moving Randomly', Hits Record Gap Over Platinum as US GDP Revised Up, Nickel Hits 2003 Low
GOLD BULLION rose 1.3% in London on Tuesday from overnight lows in China and Asian trade, touching $1080 per ounce – and setting a new all-time premium over platinum prices – after Turkey confirmed shooting down a Russian fighter jet near the Syrian border. Western equity markets fell badly, and US Treasury bond prices rose, until revised US data then showed the world's largest economy growing faster than first estimated in the third quarter, up by 2.1% per year. With a smaller trade deficit in goods, the US data also showed higher personal consumption expenditure prices – the preferred inflation measure for central bank the Federal Reserve, set to vote on raising interest rates from 0% next month for the first time in 7 years. Bullion retreated to $1075 per ounce – back below last week's closing level – as New York's stock market recovered. Silver held firmer, trading above $14.20, as copper rallied from new 7-year lows and nickel bounced from its lowest price since 2003. Gold prices are making "random fluctuations for no apparent reason," says a note on Monday's action from David Govett at London brokers Marex Spectron, "with the price generally ending up back where it started." "On the daily chart," adds London bullion market makers Scotia Mocatta's technical analysis, the new 5.5-year low of $1066 "held twice [last] week. "Support below $1066 is seen at $1045, the low from 2010...A close above $1095 is now needed to bring in fresh buying" by speculative traders in futures and options contracts, it adds. "Physical demand in China is strong," says a note from investment, retail and bullion bank HSBC, noting the China Gold Association's estimated 8% growth in the country's end-user demand in Q3 against the same period last year. That "more than offset weak first-half consumption," says HSBC, with the rise in China's gold demand attributed "to the drop in domestic equity markets earlier in the year and a sluggish property market. "Low prices also acted as an incentive for consumers." Half-year revenues at Chow Tai Fook – the world's largest jewelry retailer – fell 4.1% versus March to September 2014 in Hong Kong Dollar terms the company said today, slipping to the equivalent of US$3.6 billion. But while sales of gem-set, watches and platinum jewelry all fell, its same-store sales of lower-margin gold products – as Chow Tai Fook warned last month – rose 10% after plunging more than 35% year-on-year in 2014. That helped gross profits decline almost 16% year-on-year to the equivalent of US$1.01bn. "Revenue from non-gold products recorded a year-on-year decrease, signaling a continual weak consumer sentiment," the company said. With gold priced in HK Dollars dropping 9% over the last year, Chow Tai Fook's total inventory of all raw materials and unsold products also fell 9% by value to the equivalent of US$3.7bn. "Disappointing quarterly earnings and falling share prices," said Japanese news-group Nikkei's Asian Review last week, "reflect just how severely the slowdown in China is affecting companies across the region." Even within $10 of last week's near 6-year low, gold bullion today hit a record high over and above platinum prices – now down 15% since the VW diesel emissions scandal broke in September. "Platinum was at a discount to gold in 2011 and 2012 at the height of the gold bull run," notes specialist news and data providers Platts, "but it never exceeded $200 per ounce." Gold's premium to platinum today hit $240 per ounce as the white metal hit new 7-year lows. "The discount is so wide – it's crazy," Platts quotes one Hong Kong dealer. "It could take the appeal off of platinum being a luxury metal for jewelry manufacturers in Asia."
GOLD PRICES retreated near last week's new 5.5-year lows in Asian and early London trade Monday, holding above $1065 per ounce as crude oil bounced hard from near 6-year lows following a surprise announcement from major Opec cartel member Saudi Arabia. Silver also rallied, reversing 2% losses to new 6-year lows beneath $14 per ounce, after the Saudi government said it is "willing to co-operate" with other oil-producing nations to "stabilize prices". With US futures and options speculators growing their bearish bets against crude oil however, the price then fell hard, dropping once more towards the summer's new 6-year lows at $40 per barrel. The US Federal Reserve – all set according to 3 members over the weekend to vote for "lift-off" from 7 years of zero rates in mid-December – should meantime wait for inflation to strengthen, said 'dovish' US Fed governer and voting member Daniel Tarullo in an interview Monday. "When we do raise rates, it will be particularly important to be watching carefully for the effect on inflation, and whether the expectations that inflation will continue to rise back to 2% is being met or not being met." The Bloomberg Commodity Index (BCOM) suffered its worst quarterly drop since the 2008 financial crisis between July and September, the news and data provider said in a new report at the weekend, losing 14.5% "amid forecasts for the slowest economic growth since 1990 in China, the biggest user of energy, metals and grains." "Expectations for a US rate rise in December remain strong," says the Asian dealing desk at Japanese conglomerate Mitsui's precious metals division. "There is a band of resistance between $1079 and $1086. The market still remains vulnerable to further moves lower, with support at $1030-42." Last week saw the giant SPDR Gold Trust (NYSEArca:GLD) shrink once again, down for the 5th week in succession as stockholders liquidated shares and the volume of gold needed to back the product fell to 660 tonnes – its smallest holding since the week of Lehman Brothers' collapse in mid-September 2008. Silver's largest ETF in contrast – the iShares Silver Trust (NYSEArca:SLV) – added metal to reach a 9-week high of 9,897 tonnes. Across all exchange-traded gold products, "We see the risk of accelerated selling...if prices move below $1000 per ounce," says a note from investment and bullion bank Barclays Capital. "There [was] a large block of shares purchased between $900 and $1000 per ounce," BarCap goes on, saying that since the price crash of 2013, its analysts "have seen matching amounts between the amount of gold redeemed and purchased [earlier] in the same price bracket." Barclays say the volume at risk on a gold price drop from $1000 to $900 "totals 716 tonnes by our estimation." Data from the St.Louis Fed show how Dollar gold prices first rose towards and broke above $1000 per ounce as US consumer-price inflation whipped between 5.6% and minus 2.1% per year. Priced in Chinese Yuan meantime, gold lost almost 1% in brisk trade on the Shanghai Gold Exchange on Monday, but that extended the main contract's premium – over and above comparable London quotes in Dollars – to the equivalent of almost $5 per ounce, twice the last 12 months' average. The drop in crude oil prices, Bloomberg News reports separately, has wiped $25 billion off corporate earnings for S&P500-listed stocks so far this year, a drop of 3% overall, as earnings in the oil-producer sector sank 57%.
The value of Russian gold reserves rose by 3.45% to $50.58 million in October as compared to $48.89 million recorded in September.
War in France? The Paris stock market just enjoyed its best week in a month... "YOU can't eat gold," is one of the idiot arguments you'll hear against buying the metal from time to time, writes Adrian Ash at BullionVault. "That's right," you could reply. "Whereas you can eat white truffles...shaved onto your Michelin-starred dinner and charged to your bill by the gram. "That must be why white truffles just keep getting more and more expensive...while gold struggles." Even the idiot will look at you blankly. You can't be serious. Surely something else is behind the 70% rise in wholesale white truffle prices this year... ...and maybe simply being edible isn't the best measure of where an asset's price might head. Perhaps investment flows and credit count for more. US analyst Robert Prechter likes to tell a nice parable on a similar point. Imagine the devil offers you a bargain. He will tell you tomorrow's headlines today. You must then choose to buy...or sell...the stock market. Long or short, you simply have to hold your bet for a couple of trading days. Let's say 1 week. Or a month if you think the news deserves it. Ready? Here goes... Tomorrow in Dallas, Texas the wildly popular US president will be shot dead. How should you bet? Will you buy or sell the US stock market? Well, if you chose to sell the Dow Jones Industrial Average after it slipped 1.3% on Thursday, 21 November 1963...the day before JFK was assassinated...you would have made money by the market's close on that dreadful Friday. The Dow dropped almost 2.9%. But the next trading day...and the week after that? The Dow rose 4.5% on the Monday, slipped on the Tuesday, but added another 1.3% on Wednesday. Overall, within a week of JFK's murder, the Dow traded 2.4% higher. And inside 3 weeks it was marking new all-time highs. In fact, that drop on 22 November 1963 proved only a blip in the Dow's strong bull run from spring 1962 to autumn 1966. And Prechter's point is that news headlines really don't drive financial markets. Just like edibility doesn't. You can't eat gold, Dollars, or share certificates. (Although yield-hungry fund managers buying bonds with negative yields might yet get their own heads handed to them on a plate.) Fast forward to the awful events in Paris ten days ago, and the CAC40 index of France's major stocks has since enjoyed its strongest week-on-week gains in a month, reports Bloomberg. "Fewer than 10 stocks have fallen, among them Accor, Europe's biggest hotel operator, which dropped 4.7% on Monday...[but] clawed back more than half of those losses." Is this patriotism? Defiance? Or have investors no shame? Well, "the CAC40 index," replies Bloomberg, "remains one of Western Europe's best performing equity indexes [all of] this year." And as Time magazine notes, "More likely, it's a sign of investor faith that central banks will do everything in their power to prevent a recession in the immediate aftermath of a terrorist attack." Mario Draghi, head of the European Central Bank, didn't mention the Paris attacks in his speech Friday morning. But he fired up the money-copter regardless, fretting that inflation is too low and vowing to do "what we must" to fix that little crisis for consumers, savers and pensioners on fixed incomes. As for Robert Prechter's parable, he believes it shows how financial markets don't watch the evening news or read the papers. Instead, they do what they do thanks to deep, near-mystical forces of human nature revealed to technical analysts by price charts. Prechter's particular thing is Elliott Wave counting. And as it happens, one technical analysis from a bullion bank last week said gold prices are marking a "terminal" Elliott wave in this bear market starting back in 2011. If a true low does strike soon...or is now passing...Draghi's December dash to the money-copter might coincide. The Fed's much-delayed rate rise from 0% could then prove a news headline to ignore next month. If it actually happens.
Gold Price Flips at $1080 as Fed 'Set On Hike', Eurozone Vows to Inflate, India's Gold Bond Scheme Launch Fails
GOLD PRICES edged back after recovering last week's finish late Friday in London, trading 1.3% above Tuesday's near 6-year low at $1065 per ounce as Western stock markets rose with the Dollar following fresh hints from US Fed policy-makers that a December interest-rate rise is a foregone conclusion. "We have done everything we can to avoid surprising the markets...when we move," said the US central bank's vice-chair Stanley Fischer at a conference in San Francisco, while Atlanta Fed president Dennis Lockhart said he's now "comfortable with moving off zero soon," but the path of further hikes will likely prove "slow [and] halting." In contrast the Fed, Eurozone monetary policy will become easier still said ECB president Mario Draghi in a speech Friday, vowing to do "what we must" to raise the near-zero rate of inflation. Bullion flipped back below $1080 – a key technical gold price level according to some analysts – while silver headed for a 0.5% weekly drop at $14.18 per ounce. "Finding support from a somewhat weaker US Dollar [overnight] precious metal prices have been recovering since yesterday," notes German bank Commerzbank. "Candle charts suggest...we have entered [a] corrective cycle after our long $1090 to $1066 down move," said a technical analysis from bullion bank Scotia Mocatta overnight, pointing to $1095 and $1114 as near-term targets. "As the market moves into a corrective phase," agreed the Asian dealing desk at Swiss refiner and finance group MKS this morning, "it's likely gold will test top-side targets of $1095-1100 [but] further resistance sits around $1110." Chinese gold prices rose again Friday on the Shanghai Gold Exchange, adding another 0.8% to a 3-day high and holding a firm $3.60 per ounce premium above London quotes. China state broadcaster CCTV today reported the release of new gold bars marking 2016 as the Year of the Monkey on the Chinese zodiac. New customs data from Switzerland – the world's No.1 gold bar refining center – show October was the strongest month in 7 for gold exports direct to China, notes Commerzbank, while shipments to Hong Kong slipped but held "solid". "By contrast," the bank's commodities team go on, "exports to India totalled a mere 21.5 tons...a surprisingly low figure given the high religious festivals of Dhanteras and Diwali in November, which are generally accompanied by high gold demand." With the Diwali festival now being followed by India's key wedding season for gold gifting, the BJP government of Narendra Modi's new scheme to "unlock" some of the sub-continent's estimated 20,000 tonnes of existing private gold holdings – and use them to meet future demand, reducing the need for imports – has so far gathered less than half-a-kilo according to Finance Ministry sources speaking to the Wall Street Journal. New Delhi's other gold initiative – a Sovereign Bond paying 2.75% annual interest while tracking the Rupee gold price – meantime closed its first offering today with some INR145 crore raised from private savers ($22 million) according to Financial Express. At current rates, that means the scheme launched two weeks ago has deterred some 633 kilograms of gold investment. India's gold bar and coin demand last year totaled 207 tonnes according to data compiled by specialist analysts Metals Focus for market-development organization the World Gold Council – an average fortnightly pace of almost 8 tonnes.
GOLD PRICES rose 1.6% in 3 hours Thursday afternoon in London, recovering all the week's previous losses to new 6-year lows to trade at $1083 per ounce as Western stock markets erased earlier gains and global shipping rates hit new all-time lows on the Baltic Dry index. The US Dollar retreated towards its weakest level in a week versus the Euro despite Wednesday's minutes from the Federal Reserve's latest policy meeting showing what Reuters calls a "solid core of officials [backing] a possible December rate hike." US Treasury bond prices rose again, pushing 10-year yields lower for the 7th session in 8 from last week's four-month high of 2.36%. "After facing stiff resistance near a descending trend drawn since 2012," says a note from technical analysts at French investment and bullion bank Societe Generale, "gold is probing the lows formed in July at $1080. "More importantly this is the upper part of the massive upward channel stretching back from the 1980s and [also] the 50% retracement of the 2000 to 2011 uptrend." Saying that gold is "developing the fifth and terminal" move under Elliot Wave theory "of the down cycle that started in 2011," SocGen sees support at $1045 and then $1030 – gold's 2010 and then 2008 high points respectively. Developed by US accountant Ralph Elliott in the 1930s to map the "rhyhmical procedure" in financial markets, Elliott Wave theory posits a predictable cycle of waves in prices. "On weekly closing basis," SocGen adds, "a move below $1080 will be needed to further accelerate the downtrend." With the Reuters/Jefferies CRB index of 19 key commodity prices losing 20% this year – "far exceed[ing] our expectations," according to bearish Goldman Sachs analysts – the Baltic Dry Index of shipping rates meantime hit a new all-time low today on its 30-year series, down by more than one-third so far in 2015. "The main issue is the lack of demand for iron ore from China," says one shipping analyst. "[This is] the most challenging market I have encountered in my 37 years in dry bulk shipping," said Petros Pappas, CEO of carrier Star Bulk (Nasdaq:SBLK) on an earnings call yesterday, which saw the stock drop 20%. "What's happening is that in 2012 to 2014 the number of ships ordered overwhelmed the market," says CEO Peter Georgiopoulos of ship-owner Gener8 (NYSE:GNRT) "The fleet is four times the size that it should be." Overnight in China on Thursday, a 0.3% rise in Yuan gold prices saw trading volume in the Shanghai Gold Exchange's main contract drop to 1-week lows, but premiums above the global benchmark of London settlement held firm. Equal to $3.50 per ounce, today's Shanghai premium offered a good incentive to importers over the last 12 months' average of $2.50. "Investors still prefer gold as they don't have many alternatives," Bloomberg quotes Haywood Cheung, chairman of the Chinese Gold & Silver Exchange Society in Hong Kong. "We expect [China's] gold demand to continue strengthening through the year-end...and [February's] Lunar New Year," says Industrial Futures Co. analyst Long Ling in Shanghai. Silver tracked and extended the move in gold prices on Thursday in London, rallying almost 2% to near 1-week highs at $14.42 per ounce before easing back.
Azerbaijan's silver production in January-October 2015 totalled 92.1 kilograms, down 69% from a year earlier. Silver production during October totalled 17.4 kilograms.