India Gold prices 7% lower this Diwali season

in 24-10-2014

Rajesh Exports Ltd. anticipated jewelry sales rising between 30% and 40% during Dhanteras, and, as noted by several news reports, gold purchases were running 15% to 20% higher on average for Dhanteras

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Silver Cheapest vs. Gold in 5 Years as Both Slip, Diwali "In Line" with 2013 So Far

in 23-10-2014

GOLD PRICES fell below last Friday's 6-week closing high in London trade Thursday, slipping to $1232 per ounce as US bond yields rose and commodity prices fell yet again.   Manufacturing PMI data from China and Europe beat analyst forecasts but world stock markets held flat overall.   Silver prices fell faster than gold, nearing 2-week lows at $17.05 and driving down to the cheapest level in terms of gold since July 2009.   Hitting just 33 ounces of silver per 1 ounce of gold when silver prices peaked in spring 2011, the Gold/Silver Ratio fell to 85 during the Lehmans Crash of late 2008.   Today it touched 72.4 ounced of silver per 1 ounce of gold.   "The general US Dollar strength and strong equities [are] translating into pressure for gold," says a note from Swiss refiner MKS's traders.   "Flow-wise...Chinese demand [has been] drying up at these higher levels and Indian demand is likely to curtail following Diwali."   The 5-day Hindu "festival of lights" beginning Tuesday with Dhanteras has so far seen gold demand "match last year" the Economic Times of India quotes Suresh Jain, director of manufacturer and wholesaler Royal Chains in Mumbai, who yesterday became president of trade body the Indian Bullion & Jewellers Association (IBJA).   "Feedback trickling in from jewellers and bullion dealers across the country," says Jain, "suggests that sale of coins and jewellery was more or less in line with Dhanteras 2013."   Chinese gold prices meantime held level with London quotes at the end of Shanghai trade Thursday, lacking any sizeable premium for the 3rd day running but missing the $10 drop per ounce which then followed in global trade.   Activity in China's manufacturing sector has risen slightly, according to HSBC's Purchasing Managers Index, released overnight.   France 's manufacturing and services sectors are both slowing however, Markit's PMI release said today.   Hoping to boost business lending in the Eurozone, commercial bank debt now being bought by the European Central Bank "could amount to between €1 billion and €2bn" this week, says French bank BNP Paribas' senior covered bonds strategist Heiko Langer to Bloomberg.   "Eventually, real interest rates are likely to rise," said Ben Broadbent, deputy governor of the Bank of England in a speech today, "[but] are likely to stay low for some time yet."   Previously setting a low of 2.0% during its 300-year history, the Bank has now kept UK rates at all-time lows of 0.5% for more than half-a-decade.   "Will these morons ever learn?" asks French bank Societe Generale's strategist Albert Edwards today.   "The central banks for all their huffing and puffing cannot eliminate the business cycle. They should have realised after the 2008 Great Recession that the longer they suppress volatility, both economic and market, the greater the subsequent crash."

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World Gold Council report highlights responsible gold mining’s continuing constructive impact on host economies

in 23-10-2014

The World Gold Council yesterday released its second Responsible Gold Mining and Value Distribution report at the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development in Geneva. This edition of the report reinforces the continuing contribution responsible gold mining can make in supporting economic development in host countries. As well as providing greater...

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Gold Prices Bounces Off "Key Bullish Level" as US Inflation Slows, Dollar Gains, China Eyes Miner Hedging

in 22-10-2014

GOLD PRICES bounced Wednesday in London off $1242 per ounce – a "key" technical level according to several chart analysts – as new US inflation data showed the Consumer Price Index falling last month from August.   Seasonally adjusted, and excluding fuel and food costs, so-called "core inflation" rose from 0% annually to only 0.1%, missing Wall Street forecasts.   The Dollar rose after the news to 1-week highs against the Euro, while European stock markets reversed earlier losses and US equity futures pointed modestly higher.   Commodities extended their bounce, and major-government bond prices also rose.   Tuesday's close above "critical resistance" at $1242 had confirmed a "bullish event", technical analysts at Swiss bank UBS said earlier – pointing to that level as the 38.2% retracement of gold's July to October drop.   Gold, agrees UBS's fellow market maker Scotia Mocatta, rose yesterday above both that Fibonacci level as well as the 50-day moving average of prices at $1248.35.   "Momentum indicators are biased to further upside," Scotia said overnight, also pointing like to UBS to $1264 and then $1283 as gold's next likely resistance levels.   Falling to $1242 after today's US consumer price news, gold prices then held $10 below Tuesday's new 6-week high of $1255, defying German bank Commerzbank's comment that if inflation slowed, "gold could receive an additional boost, as the Fed might raise interest rates later than previously expected."   In today's action "The Chinese were sellers," says one Asian dealing desk, "which was of no real surprise" with prices hitting 6-week highs.   "Offers on the [Shanghai Gold Exchange] were layered up preventing any move higher," says Swiss refining and finance group MKS.   Solid volumes today saw Shanghai's premium above London gold prices tick higher from Tuesday's 1-month low at 15 cents per ounce.   Besides its existing gold contracts, the SGE is planning to add forwards and options – a crucial offering for "bullion bank" mining finance – sometime soon, Reuters quotes unnamed sources.   The world's No.1 gold mining producer since 2007, China will see output growth slow from 5% this year to below 1% in 2018, according to analyst Xinying Chia at Business Monitor International (BMI), with its current beloow-ground reserves depleted around 2020.   Gold miners worldwide, says new analysis from market consultancy Thomson Reuters GFMS, will this year "hedge" some 40 tonnes of production net, selling forward the greatest volume to lock in prices since the market bottomed – and miner hedging neared its peak – in 1999.   The global hedgebook peaked above 3,100 tonnes of gold in total, more than a current year's worth of world mine output, in 2001.

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Solfernino Mine's irresistible offer: Gold for $650 per ounce

in 22-10-2014

Solferino Gold Mine/Colombia Reserva De Oro will be initially mining 150,000 oz of gold, and is earmarking 40,000 oz of it to be sold at $650 an oz. Considering that gold closed yesterday at $1246, the possibility of getting it at $650/oz is unheard of. It is by far the lowest price in the world for gold today.

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Gold Bullion Flows to Asian Jump But No.1 ETF Sheds Metal as China Growth Hits 5-Year Low, S&P Extends Rally

in 21-10-2014

GOLD BULLION rose to 6-week highs above $1250 per ounce in London's wholesale market Tuesday as European equities shrugged off poor data from China and S&P futures pointed higher on Wall Street.   Gaining 5.8% from this month's new 2014 lows, the price of gold bullion contrasts with the 4.5% drop in global stock markets on the MSCI World Index.   But gold bullion holdings to back the giant SPDR Gold Trust however fell Monday at the fastest pace so far in 2014, losing 10 tonnes to a new 6-year low of 752 tonnes.   Such changes in the SPDR Gold Trust (NYSEArca:GLD) are reported to show a 2-day lag – the standard settlement terms for wholesale gold bullion in London, where the GLD vaults with commercial bank and market-maker HSBC.   "Gold's performance overnight was all the more encouraging," says Swiss refining and finance group MKS, "as the S&P [index of US stocks] closed back above 1900 and market jitters seems to have calmed for the time being."   New GDP data from China – the world's No.1 gold miner, importer and consumer nation – today beat analyst forecasts but showed a slowdown in economic growth to 7.2% per year in the third quarter.   The slowest pace since the Western world's financial crisis of early 2009, that pace is also below Beijing's long-standing 7.5% target.   Separate data today showed growth in China's retail sales, as well as new urban investment, easing in September to the slowest pace in 5 years.   Japan's shares fell 2% by the close, but European equities extended their rally from this month's near-10% drop.   Crude oil extended its bounce and US bond yields ticked higher while silver rose sharply.   Adding 1.5% to hit near-1 week highs at $17.66 per ounce, silver had earlier lagged gold once again, taking the Gold/Silver Ratio to a new 5-year high above 71.4 ounces of silver per 1 ounce of gold.   Trading volume in the Shanghai Gold Exchange's main contract rose towards the last one month's average. But Chinese Yuan prices failed to rise as quickly as world prices in London, cutting the Shanghai premium almost to zero from the 1-month average above $3 per ounce.   Swiss gold exports to China and Hong Kong were 36 tonnes last month, new trade data from the world's No.1 refining nation showed Tuesday, while India imported 58 tonnes of September's 173-tonne total – the largest flow in 7 months.   "This ties in well," says a note from Swiss bank and London market-maker UBS, "with the pick-up in physical demand across the key [Asian demand] centres."   "There is an improvement in gold demand on Dhanteras," The Times of India quotes one Delhi jeweler, "as gold is quoted at a lower level compared to last year."

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