China’s Consumption of Gold and Acquisition of Gold Mines Continues

Today’s AM fix was USD 1,429.75, EUR 1,102.52 and GBP 931.19 per ounce.  
Friday’s AM fix was USD 1,449.25, EUR 1,114.12 and GBP 941.62 per ounce. 


Cross Currency Table – (Bloomberg)

Gold fell $12.90 or -0.89% on Friday to $1,443.30/oz and silver finished with a gain of 0.42%. Gold and silver both traded down for the week at -1.76% and -1.25%.

The downward pressure on the gold price emanated from Comex where gold futures were off 1.9%. 

Driving the sentiment was the report that U.S. jobless benefits decreased to their lowest rate since 2007. Philadelphia Fed President Charles Plosser forecasted that day unemployment will drop to 7% by December 2013 and he favours reducing the Fed’s $85 billion monthly bond purchases next month. Plosser however has no vote on Fed policy this year.

While hedge funds are seeing outflows of $20.8 billion from gold funds this year, BlackRock Inc. the world’ biggest money manager is still bullish, reported Bloomberg.


Gold in Dollars, 1 Year – (Bloomberg)

Asian countries are seeing unprecedented demand for the yellow metal after the dip in prices in April.

India imported $7.5 billion of gold bullion in the last month up from $3.1 billion a year earlier. The country’s trade deficit widened 70% with the increase in gold and silver imports.


Gold in Euros, 1 Year – (Bloomberg)

Analysts at Sprott Group highlight that China is using its gold import data to elevate import statistics even though the precious metal should not be classified with imports since they are not used for “goods and services” but rather primarily as investments.

The golden boost to the imports data has led some analysts to conclude that the Chinese manufacturing sector is strong. According to the Bejing Daily Newspaper, Chinese housewives or “aunties” have purchased 300 tons of the yellow metal in the past three weeks amounting in nearly $16 billion.  The impact of the run on physical gold in China may have a significant effect on import statistics.

Recently, China National Gold, a state-owned miner, was in talks to purchase Barrick Gold’s 74% stake in African Barrick, a major gold producer in Tanzania.

Although the deal has been shelved it shows China’s desire to acquire more mines. The Chinese purchased Norton Gold Fields in Australia last year for $240 million and in mid April bid for Kalgoorlie Mining Co.  Even with the price drop the Chinese saw the price for Barrick as too steep.  

China is the world’s largest producer of gold.

NEWS
Gold down 1 pct to near 2-week low on dollar – Reuters 

Gold Drops for Third Day as Dollar’s Strength Curbs ETP Holdings – Bloomberg

Gold Bears Pull $20.8 Billion as BlackRock Says Buy: Commodities – Bloomberg

Amplats scales back South African job cuts to 6,000 – The Telegraph

India trade deficit jumps over 70% on gold imports – Market Watch

COMMENTARY
Precious Metals Lose Luster for Investors – Dubai Chronicle

THE BIG FALLACY: Silver Trading More Like A Base Metal – SilverSeek.com 

Eric Sprott: The Golden Answer To Chinese Import Data – Zero Hedge

African Barrick Gold’s China talks end – The Financial Times

A Top Contender at the Fed Faces Test Over Easy Money – Wall Street Journal

For breaking news and commentary on financial markets and gold, follow us on Twitter.

Mark OByrne

Also on news-goldcore-com

Videos

Uranium Squeeze AND the Case for Gold – Amir Adnani

Tavi Costa- The Fed is Trapped

Silver Market Predictions – Ed Steer Talks about the Silver & Gold Price

Blog posts

Why Cathie Wood is Wrong About Inflation

Does the velocity of money need to increase for inflation to take hold? This week a post on Twitter garnered over 2,700 retweets and almost 20,000 likes. The tweet was from Cathie Wood, the founder of Arkinvest. The tweet made the argument that inflation didn’t take hold after 2008-09 because the velocity of money fell […]

READ MORE

Uranium Squeeze AND the Case for Gold – Amir Adnani

Dave Russell, our host today, welcomes Amir Adnani, CEO of GoldMining Inc. He joins us to talk about the supply-side factors affecting the gold prices, The Case for Gold, and the Uranium Squeeze, as well as why he is bullish on both yellow metals. Watch the full interview to find out more. Watch the Video […]

READ MORE

Lawrence Lepard – Living in a World with Inflation

Lawrence Lepard Portfolio Manager and advocate of sound money, is our guest on this episode of GoldCore TV. With 40% of money in the US being created in the last 2 years, we ask Lawrence if the Fed is trapped. If so will this mean that it is going to be very difficult for them […]

READ MORE

Featured

Gold, the Tried-and-True Inflation Hedge for What’s Coming!

READ MORE

How High is Too High for Rising Government Bond Yields?

READ MORE

Silver – 7 Reasons it is Still Set to Soar

READ MORE
Newsletter
Category
Archives
Popular

No posts available

Videos

Uranium Squeeze AND the Case for Gold – Amir Adnani

Tavi Costa- The Fed is Trapped

Silver Market Predictions – Ed Steer Talks about the Silver & Gold Price

Blog posts

Why Cathie Wood is Wrong About Inflation

Does the velocity of money need to increase for inflation to take hold? This week a post on Twitter garnered over 2,700 retweets and almost 20,000 likes. The tweet was from Cathie Wood, the founder of Arkinvest. The tweet made the argument that inflation didn’t take hold after 2008-09 because the velocity of money fell […]

READ MORE

Uranium Squeeze AND the Case for Gold – Amir Adnani

Dave Russell, our host today, welcomes Amir Adnani, CEO of GoldMining Inc. He joins us to talk about the supply-side factors affecting the gold prices, The Case for Gold, and the Uranium Squeeze, as well as why he is bullish on both yellow metals. Watch the full interview to find out more. Watch the Video […]

READ MORE

Lawrence Lepard – Living in a World with Inflation

Lawrence Lepard Portfolio Manager and advocate of sound money, is our guest on this episode of GoldCore TV. With 40% of money in the US being created in the last 2 years, we ask Lawrence if the Fed is trapped. If so will this mean that it is going to be very difficult for them […]

READ MORE

Featured

Gold, the Tried-and-True Inflation Hedge for What’s Coming!

READ MORE

How High is Too High for Rising Government Bond Yields?

READ MORE

Silver – 7 Reasons it is Still Set to Soar

READ MORE