Japan ‘Insurance’ Gold Buying Doubles On Yen Concerns

Today’s AM fix was USD 1,225.50, EUR 954.22 and GBP 822.70 per ounce.
Friday’s AM fix was USD 1,232.75, EUR 957.40 and GBP 822.55 per ounce.

Gold fell $31.20 or 2.49% on Friday and closed at $1,221.70/oz. Silver closed at $18.86 or slid 4.75%.

On the week gold was down 0.85% and silver was down 3.87%


Cross Currency Table – (Bloomberg)

Gold has inched higher today in all currencies. Friday’s U.S. nonfarm payrolls figure came in better than expected (195Kvs166K) which may have led to gold falling in price. 

Gold demand internationally remains robust – especially in Asia. China’s gold imports from Hong Kong for May jumped over one third from April, confirming again that Asian buyers shrewdly buy on dips in price.  

In Japan, gold bullion demand in 2013 is twice the levels seen in 2012. Japanese gold imports have doubled to 7,686 kilograms from January to May verses 2,994 kilograms the prior year noted data from Japan’s finance ministry. 

Many Japanese are now buying gold as a diversification and as insurance due to the risks of volatility in stock markets and of a further devaluation in the yen.

Abenomics has seen the yen fall 15% against the greenback year to date, its lowest since 2008. 

Gold in Japanese yen depreciated 15% this year while gold in dollars sank 27%. On the TOCOM (Tokyo Commodity Exchange) the yellow metal hit a record of 5,081 yen a gram ($1,562/oz) on February 7th as the yen deteriorated.  


Gold in Yen, 5 Year – (GoldCore)

Despite the recent falls, gold in yen terms is 20% higher in the last 5 years of the global financial crisis. Japan’s largest bullion retailer, Tanaka Kikinzoku Kogyo K.K., said sales to Japanese citizens will exceed their purchases for the first time since 2004.  The cheap yen is spurring buying interest.

“Japanese individuals are thinking of gold as an asset for their investment portfolio as well as insurance for the future,” said Kate Harada, general manager of the precious metals department at Tanaka Kikinzoku, a unit of Tanaka Holdings Co. “A growing number want to use gold partly to hedge against their yen-based assets such as stocks and properties.”

Tanaka Group is seeing their customer demographics shift to younger customers over the past 3 years. Japanese “salarymen” are concerned about jobs, their pensions and the two decades of deflation, which is turning them to gold as a safe haven investment.

Has Gold’s ‘Bubble’ Burst Or Is This A Golden Opportunity?   
Our recent well attended webinar has been uploaded to YouTube.

Topics covered in the webinar included:

* Outlook For Gold And Silver This Year and Coming Years

* Learning From 1970s Bull Market & 1975/76 Price Collapse

* Safest Way To Own Gold And Silver

* Paper and Digital Gold

* Knowing When To Reduce Allocations Or Sell

* Safest Way To Own Gold And Silver

* Extremely Negative Sentiment Towards Gold

NEWS
Gold drops on strong U.S jobs growth, stimulus fears – Reuters

Gold Swings as Investors Weigh Fed Stimulus Bets, Dollar Climbs – Bloomberg

Gold Bear-Market History Signals Second-Half Hope for Faithful – Bloomberg

South Korea’s ranking rises to 34th in gold reserves – Korea Herald


COMMENTARY
The New Law of Supply and Demand – SilverSeek

Bundesbank Warns China’s Currency "On Its Way To Becoming Global Reserve Currency" – Bundesbank

Interest Rates Threaten Gold? – GoldSeek

Silver Market Buy Signal – Market Oracle

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



 

Mark O'Byrne

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