Smart Wealthy Money Seeking Storage Outside Banking System

Today’s AM fix was USD 1,260.75, EUR 967.95 and GBP 829.93 per ounce. 
Yesterday’s AM fix was USD 1,243.50, EUR 952.80 and GBP 816.27 per ounce.
Friday’s AM fix was USD 1,203.25, EUR 921.89 and GBP 789.33 per ounce.


“It’s tough to make predictions, especially about the future” – Yogi Berra 

Gold climbed $20.50 or 1.66% yesterday and closed at $1,252.70/oz. Silver hit $20.09/oz in Asian trading fell back in London and rebounded higher in NY, but finished with a loss of 0.1% at $19.60/oz.

Gold ETF outflows continue and are at a four year low, with SPDR Gold Trust saying its holdings dropped to 968 tonnes, a figure not seen since 2009. However physical demand remains robust as seen in China, in the U.S. Mint figures and the increasing demand for international bullion storage, outside the banking system.   

Investors will keenly wait for the U.S. nonfarm payrolls figure on Friday. A good jobs number will see gold come under pressure again while a poor number could lead to further buying.

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Today: July 2nd
Time: 1300 GMT

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"The time to buy is when there is blood in the streets" – Rothschild

Physical demand remains robust globally and especially in China where Reuters report "stock loading in the market and physical buying in Shanghai."

There is also the interesting trend of many western banks, some who are making loud bearish noises in public, quietly moving to offer their high net worth client’s storage in Zurich, Singapore and Hong Kong.

Smart money is still accumulating physical gold and the banks know this and realise that in order to retain clients and income they must offer bullion services and storage outside the still fragile banking system. 


Cross Currency Table – (Bloomberg)

The U.S. Mint sold 14,500 ounces of gold coins on the first day in July, according to figures on the Mint’s website. At that pace, total sales for the month would be 333,500 ounces, up 993.4% from a year earlier according to Bloomberg.

================================================================

                         Total Ounces        YOY%        MOM%

================================================================

July 2013

 Month-to-Date          14,500

 Full month pace       333,500      993.4%      485.1%

—————————————————————-

June 2013               57,000       -5.0%      -18.6%

May 2013                70,000       32.1%      -66.6%

April 2013             209,500      947.5%      237.9%

—————————————————————-

March 2013              62,000       -0.8%      -23.0%

Feb. 2013               80,500      283.3%      -46.3%

================================================================

                         Total Ounces        YOY%        MOM%

================================================================

Jan. 2013              150,000       18.1%       97.4%

Dec. 2012               76,000       16.0%      -44.3%

Nov. 2012              136,500      232.9%      131.4%

Oct. 2012               59,000       18.0%      -13.9%

Sept. 2012              68,500      -24.7%       75.6%

Aug. 2012               39,000      -65.2%       27.9%

July 2012               30,500      -52.7%      -49.2%

June 2012               60,000       -2.4%       13.2%

—————————————————————-

May 2012                53,000      -50.5%      165.0%

April 2012              20,000      -81.5%      -68.0%

March 2012              62,500      -15.0%      197.6%

Feb. 2012               21,000      -77.3%      -83.5%

Jan. 2012              127,000       -4.9%       93.9%

Dec. 2011               65,500        9.2%       59.8%

Nov. 2011               41,000      -63.4%      -18.0%

Oct. 2011               50,000      -46.8%      -45.1%

================================================================

Source: Bloomberg

Gold is "extremely oversold" on a variety of indicators including long-term momentum indicators.

Gold appears to be close to a bottom and there is major support between $1,000/oz and $1,200/oz. Further weakness is possible and buyers should wait for a higher weekly close before dollar, pound and euro cost averaging their physical accumulation.  

Ignore the considerable noise, alarmist articles and headlines and always focus on the fundamentals, on the importance of diversification and most importantly always have a long term perspective.

NEWS
Gold extends gains into third session, China demand aids – Reuters

Gold Climbs for Third Day to Extend Rebound From 34-Month Low – Bloomberg

Gold eases on U.S. data, ETF outflows – Reuters

Gold Traders Seeking Floor After $66 Billion Rout – Bloomberg

From Monday, gold sales to Iran under US sanction – Business Times

COMMENTARY
“This Country Is Different” – GoldSeek

Ian Gordon: Who Killed the Gold Price? – The Gold Report

Real Difficult Time Right Now Getting Physical Metal – Zero Hedge

"We believe gold and gold miners represent good risk/reward" – Zero Hedge

Jim Rogers on Gold: "Certainly Close To a Bottom" – Bull Market Thinking

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

 

Mark O'Byrne

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