GOLD PRICES rose in Euros but held flat against the Dollar and other currencies Thursday lunchtime in London as the European Central Bank outlined plans for its new QE asset purchase scheme.
Already announced at €60 billion per month until at least September 2016, the ECB's QE will begin next Monday, buying more than €1 trillion of certain public and private-sector bonds in total.
Bonds now offering a negative yield – as is the case with €1.9 trillion of Eurozone government bonds, due to their high prices – will be eligible so long as the return is above the ECB's own deposit rate, held today at minus 0.2% per year.
Gold priced in Euros touched 3-day highs above €1090 per ounce as the single currency hit fresh 11-year lows to the Dollar.
Gold prices in Shanghai had earlier slipped, cutting China's premium above global quotes to $3.50 per ounce, after Premier Li Keqiang opened this year's People's National Congress by setting a "new normal" growth target of 7% for the world's second largest economy.
China's long-standing target of 7.5% was narrowly missed in 2014, with the slowest rate of growth since 1990.
The Yuan rose Thursday on the currency market.
Calling corruption "a blight on people's quality of life," Li stressed that slower growth is necessary for China "to defuse problems and risks [and] avoid falling into the middle income trap" hitting previous fast-growing emerging economies when their labor force – reliant on manufacturing jobs – becomes uncompetitive.
Brazil's central bank meantime raised its key interest rate to a six-year high at 12.75% overnight, aiming to curb inflation of 7.4% – almost one percentage point above the government's target.
"Gold [priced in Dollars] continues to consolidate ahead of US jobs data tomorrow," says a note from Standard Bank's London team.
"Dips sub-$1200 are finding good support and $1195-1192 remains strong congestion area."
But outside the Euro's new drop, "It really is extraordinarily quiet at the moment," says David Govett at brokers Marex Spectron, "and interest [in preciouos metals] is as low as I can remember."
"At some point gold is going to have to shrug off the interest hike theme, but we still think though that there are always people that won't believe it until it happens," Macquarie analyst Matthew Turner said.
"And those people of course have got history on their side because there hasn't been a rate hike for eight years and every year there has been a forecast of one and it hasn't happened yet," he added.
Friday's US non-farm payrolls data for February "should be quite important," says Australian bank Macquarie's precious metals analyst Matthew Turner, speaking to Reuters.
Despite the US Federal Reserve consistently linking the idea of raising rates from 0% to strength in the labor market, "There are always people that won't believe it until it happens.
"Those people of course have got history on their side. Because there hasn't been a rate hike for eight years, and every year there has been a forecast of one it hasn't happened yet."
The Bank of England today marked the 6th anniversary of cutting UK interest rates to a record low of 0.5% by holding that level again, with no change either to its outstanding £375 billion ($570bn) of QE government bond purchases, some one-third of the UK government's entire debt in issue.
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Intensified competition and overcapacity in the near and mid-terms represent the main challenges for both the high-value and industrial gold recycling segments.
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“The Ups and Downs of Gold Recycling: Understanding Market Drivers and Industry Challenges,” written andpublished today by the World Gold Council and The Boston Consulting Group (BCG), analysesthe economic drivers of the global gold recycling market and highlights important future industry trends including; a shift in concentration of gold recycling from west to east, increased...
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LBMA gold price fixing in electronic manner should bring more transparency to the market as more participants are involved in setting the benchmark price. The involvement of Chinese banks could add bullishness to prices
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GOLD BAR prices held unchanged in London's wholesale market on Wednesday, moving less than $5 per ounce as world stock markets ticked higher but US equity futures pointed lower after weaker than expected jobs data.
The Dollar retreated near 11-year highs to the Euro after the ADP report for February – a private-sector estimate released ahead of Friday's Non-Farm Payrolls report from Washington – said the US economy added 212,000 net jobs, below analyst forecasts.
The central bank of India – the world's No.1 gold consumer nation – meantime followed gold No.2 China in making a surprise cut to its key interest rates.
Gold traded in large, 400-ounce bars ticked around $1205 per ounce, but held flat for the week so far in Euro terms near €1083.
"Gold failed to capitalise on the strong reversal seen [Tuesday] in Asia," says Swiss refiner MKS's trading desk.
"The outlook is a little mixed," says an Asian dealer's note, "but as [long] as the price trades above $1190, look for a push back to $1241-44."
"Gold is tentatively holding the trend line support drawn from early December (1194/90 levels)," says a technical chart analysis from French bank and London bullion market maker Societe Generale.
"The 4-month support line," agrees Germany's Commerzbank in a technical analysis, "is located at $1195...and there does appear some reluctance to break down [below it]."
Commerzbank also sees "overhead resistance" at $1240 per ounce.
Fundamentally however, says David Jollie at Japanese trading house Mitsui Global Precious Metals, "We still feel this market is in need of a new narrative and some new direction."
In Turkey today – the world's fourth largest consumer of gold bars, coins and jewelry – gold prices rose near January's two-year highs, as the Lira fell to fresh record lows against the Dollar on the FX market.
Turkey's gold exports in January and February more than doubled from the same period last year, according to Reuters, helping trim the country's otherwise worsening trade deficit.
Food prices led the country's 7.6% annual inflation in consumer prices last month, official data said Tuesday.
Following aggressive calls from senior political figures including President Erdogan, the central bank last week trimmed its main refinancing rate to 7.5%.
"Anyone who defends [not cutting rates further] is at the beck and call of the interest-rate lobby," Erdogan said Saturday, calling it "treason against this nation."
A column at the Hurriyet Daily News today says Erdogan believes both that the "interest rate lobby" was behind 2013's popular protests in Gezi Park – seeking to revive easy profits from high rates by removing his government – and also in "a whole new theory of economics, which apparently derives from Islamism: High interest rates cause high inflation."
Turkey's reported reserves of gold bars, which quadrupled after commercial banks were allowed in late 2011 to hold bullion as part of their liquidity reserves, slipped by 18 tonnes between December and the start of last month.
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GOLD PRICES recovered a swift plunge near 2015 lows early Tuesday, quickly rallying back to $1210 per ounce in what one trader called a "textbook reversal".
"Gold initially ticked higher in Asia," said the note from Swiss refiner and finance group MKS's dealing desk, "but came under pressure as China opened."
Falling as low as $1195 per ounce – just above the 7-week lows hit in late February – gold prices then regained that 1.3% drop by the start of London business.
After the People's Bank of China cut its key interest rates Monday, the Shanghai Gold Exchange again saw strong volume in its main domestic contract today, plus new record trading in the .9999 purity gold contract launched for international banks to trade last autumn.
Chinese premiums over London quotes – the key incentive for wholesale imports – ended the day at new 2015 highs above $5 per ounce.
Silver tracked the plunge and rally in the gold price, briefly touching the 2015 low seen in late-February at $16.10 per ounce.
"The pullback [in gold prices] was again supported by the pivotal support" below $1200 per ounce, says a technical note from Swiss bank and bullion market maker UBS.
"We would see a close above $1220...as crucial for the yellow metal to keep negative sentiment at bay."
But gold prices are "consistently testing support" below $1200, says Singapore brokerage Phillip Futures.
"Such a strong support level, when broken, often results in a swift decline. We suspect that all gold requires now is a valid catalyst to significantly breach."
Friday brings official US jobs data with the Non-Farm Payrolls report.
Thursday brings interest-rate and QE decisions from both the Bank of England and Eurozone central bank.
"Financial conditions are very accommodative globally," notes the Reserve Bank of Australia overnight, surprising analysts by holdings its key rate unchanged at 2.25% despite what the RBA called "below-trend" economic growth turning "quite weak overall."
Crude oil rallied above $60 per barrel of Brent on Tuesday, while major government bonds slipped but northern Eurozone debt continued to offer sub-zero yields.
Monday saw shareholdings in the giant SPDR Gold Trust (NYSEArca:GLD) shrink at the fastest pace since mid-December, forcing the trust to shed 1% of the metal needed to back its shares to 763.5 tonnes – still 8.5% above January's new 6-year low.
Silver bullion needed to back the iShares Silver Trust (NYSEArca:SLV) grew in contrast, adding 0.1% to an 8-week high of 10,143 tonnes.
However, the SLV's holdings remain some 7% below November's 3.5-year high, reached when silver prices sank to new 5-year lows.
China's largest bank, ICBC, meantime stressed its readiness for the new London gold price benchmark – the LBMA Gold Price – due to replace the century-old Fixing on March 20th, according to China Daily.
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GOLD PRICES halved an early spike in Asian trade Monday morning, retreating from 2-week highs after China's central bank cut interest rates for the second time in 3 months.
World stock markets edged higher as the Yuan fell to a 2-year low against the Dollar and major commodities slipped a further 0.5% overall.
New PMI data today said activity in China's manufacturing sector fell in February for the second month running.
The People's Bank of China on Monday cut its benchmark lending rate to 5.35% and cut its deposit rate by the same 0.25 percentage points to 2.5% per year.
Dollar gold prices touched $1222 per ounce before retreating to $1218, and Euro prices hit 3-week highs.
Trading in Shanghai's "international" gold kilobar contract – fee-free to foreign bank members of the Exchange since end-December – hit a new record level, almost matching volume in the domestic 'four-nines' equivalent.
Despite the fall in the Yuan, the price of Shanghai's main domestic gold contract rose to a premium of more than $4 per ounce compared to London quotes, offering a greater incentive to Chinese gold importers.
Gold inflows to India – the world's heaviest consumer nation for some 2,000 years – will continue facing 10% import duty after Saturday's new government Budget disappointed jewelers hoping for a cut to 6% or even 2%.
Finance minister Arun Jaitley instead listed 3 measures aiming to "mobilize" some of India's existing 20,000-tonne private holdings.
Gold-deposit accounts at commercial banks, like government-issued gold-tracking investment bonds, have been tried before with no success. New Delhi will now also mint a gold bullion coin to compete with foreign products.
Meantime in US gold futures and options contracts, speculative betting fell last week to a new 2015 low net of bearish bets, new data said late Friday, down 40% by value from end-January's sudden 2-year high.
The 'net spec long' in silver futures and options also fell hard according to the CFTC regulator's latest Commitment of Traders data, hitting a 7-week low fully one-third smaller from end-January's six-month peak.
But "investor positioning currently suggests gold is not all that unloved," says a note from Australian bank ANZ, noting that while "long liquidation has occurred...there has been very little addition of new short positions.
"This is different to previous cycles where significant gold weakness coincided with elevated short positions. Longs have simply taken profits."
"What is interesting," adds Mitsubishi analyst Jonathan Butler, looking at this year's rise in exchange-traded gold trust fund holdings, "is that ETF investors held onto positions during February when prices fell, rather than liquidating holdings in line with price declines – the more usual behaviour."
Now standing 10% greater by weight from January's fresh 7-year low, the quantity of metal needed to back shares in the largest gold ETF – the SPDR Gold Trust (NYSEArca:GLD) – saw "momentum investing at work" as its holdings grew sharply at New Year, says Butler.
"The three largest daily inflows coincided with...some of the largest daily gold price movements of the year" so far.
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All India Gems and Jewellery Federation (GJF) lauded various measures outlined in the India Budget 2015 to realise the value of gold but is disappointed over retaining 10% import duty on gold
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GOLD BULLION prices jumped mid-afternoon Friday, ending the month at $1214 per ounce on the London Fix as after new data showed inflation in Germany and consumer sentiment in the US both stronger than analysts predicted.
US economic growth for 2014 also beat consensus forecasts, revised less badly to 2.2%.
Gold prices rose more sharply against the falling Euro, helping halve February's earlier 7.5% drop at €1085 per ounce.
Shanghai authorities plan a local "Fixing" for gold bullion kilobars in the world's No.2 consumer nation, a source told Reuters today, aiming to "complement" the global wholesale market's century-old benchmark – set to be updated next month to improve transparency and regulatory oversight.
Over in India – long the world's No.1 gold consumer nation – tomorrow brings the 2015 Budget from Narendra Modi's pro-business government, widely expected to cut import duty on gold bullion from the current 10% to perhaps 6% or even 2%.
"Customers are enquiring but few are buying gold," news-wires quote one retailer in Mumbai's famous Zaveri Bazar, "as everyone is waiting for the duty cut to make big purchases."
Gold buyers in No.4 consumer nation Turkey meantime saw prices rise near 11-month highs on Friday, as the Lira fell to new record lows against the Dollar amid a political row over central-bank independence.
Recep Tayyip Erdogan, who moved from prime minister to president last August, today said that cutting interest rates would be a "service to the country", while his economic minister – Nihat Zeybekci – called the central bank "cowardly" for not cutting rates to 6% already.
Central bank governor Erdem Basci cut overnight borrowing rates to 7.25% on Tuesday.
"Gold lies behind [a] pleasant surprise in January," Reuters quotes economist Mehmet Besimoglu at Oyak Bank today, pointing to new data showing Turkey's smallest trade deficit since 2010.
"Exports would have fallen significantly if it wasn't for gold."
By value, net exports of precious metals last month reduced Turkey's trade deficit by $1.4 billion to $4.3bn, with gold outflows totaling perhaps 35 tonnes – almost twice the recent drop in gold reserves held at the Central Bank of the Republic of Turkey.
The CBRT has since the peak of the global financial crisis in 2011 enabled commercial banks in Turkey to keep gold bullion as reserves for their liquidity requirements. To source that metal, many banks encouraged private savers to put their own gold on deposit – gold which the central bank in turn then added to its own foreign exchange holdings.
But after rising 4-fold inside three years, Turkey's gold bullion reserves have now fallen for two months, dropping 18 tonnes to 515 tonnes by end-January – still the world's 12th largest national holdings – according to IMF data.
So far this year the Lira has lost 8% against the US Dollar, helping Lira gold prices rise over 10%.
Having dropped 12% in 2013, Lira gold prices held steady in 2014. Turkish household's demand for jewelry, bar and coin fell by almost one-third from 2013's five-year record according to data from market-development organization the World Gold Council.
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