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.
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
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.
GOLD PRICES rose again in London trade Thursday morning, very nearly touching $1220 for the first time in a week after officials in China announced new stimulus measures.
Gold prices then edged back in Dollars, but hit fresh 2-week highs against the Euro as base metals rose but US crude oil prices fell again.
World stock markets meantime rose to fresh record highs, and Eurozone bond yields hit fresh record lows, following Wednesday's "dovish" comments from the US Fed and European Central Bank chiefs.
Vowing to accelerate major infrastructure approvals and spending, Beijing's State Council today halved the corporation tax bill for small businesses until 2018, and cut unemployment insurance fees for all companies from 3% to 2%.
Shanghai's stock market rose 2.1% on Thursday, "largely driven by the news," according to an analyst at Citic Securities.
Shanghai gold prices held flat on solid volumes, but premiums above global quotes slipped back to $2.75 per ounce – reducing the incentive to importers – as the Yuan fell against the Dollar on the currency market.
New US data today showed consumer price inflation turning negative last month for the first time since 2008 on an annual basis, with the headline CPI down 0.1% from January 2014 on the slump in oil prices.
US Fed chair Janet Yellen said to Congress Wednesday that her team are only "considering" raising interest rates, and "although no new insights [were] provided," says the bullion desk at Standard Bank in London, "the market [is] clearly interpreting her comments as dovish."
ECB chief Draghi meantime told European lawmakers that the Eurozone's new €60 billion per month of QE bond buying will continue until there is "sustained inflation".
China's central bank today expanded its standing lending facility (SLF) to ensure liquidity to smaller financial institutions.
The People's Bank of China today also appointed two new deputy governors, including former China Investment Corporation and China Construction Bank executive Fan Yifei – previously rumored as a possible successor to Yi Gang as director at the State Administration of Foreign Exchange (SAFE), the agency which acquired the gold bullion moved to central-bank control in 2009.
The tone at next week's National People's Congress will likely be "accommodative for further rate and [reserve-requirement ratio] cuts," says a note from Barclays Bank.
"Financial reforms and further banking deregulation will feature high on the agenda."
Data from Hong Kong today said gold bullion exports from the city into mainland China fell last month from December, but imports fell faster, leading to 6% growth in new flows ahead of the Chinese New Year at 71.4 tonnes.
Gold don't pay dividends. Not that it needed them as the FTSE crashed, rose, crashed & rose again since New Year's Eve 1999...
WELCOME to the 21st century for London's FTSE-100 at last! writes Adrian Ash at physical gold and silver exchange BullionVault.
Yes, after waiting 15 years, 1 month and 3 weeks, that stock-market index...tracking the UK's 100 largest listed companies...closed Tuesday above the record-peak it set on New Year's Eve 1999.
"About time too," says the BBC.
"Blame banking shares for the delay," says the Financial Times.
"Don't forget dividend income!" gasps every last stockbroker and investment bank.
Indeed, if you bought the FTSE-100 just before the party to end all parties...and re-invested your dividends ever since...you would have already made 67% total returns over the last 15 years, reckons AXA Wealth.
Whoo-hoo! That's a real return of 15% after you account for inflation...a massive one per cent per year.
Well worth the risk, as I'm sure your financial advisor won't tell you today.
What if you had bought housing, long-dated bonds, silver or gold instead...?
Investment income matters of course, and gold...like silver...offers none. So it would be insane to buy nothing but gold, and bet your pension on a repeat of the last 15 years.
But given the stark challenge those 15 years make to conventional investment 'wisdom', it would be equally crazy to buy nothing but shares, let alone ignore physical bullion.
The FTSE-100 has doubled since the crash lows of the financial crisis. Gold is little changed from a half-decade ago. Yet it remains the best performing asset-class for UK investors so far this century, well ahead of even silver. Bonds come next. And they haven't dropped...never mind crashed...since long before New Year's Eve 1999.
Such parties aren't meant to last, as the DotCom Bubble...the Global Credit Boom...and yes, the gold and silver bull markets...all proved since the FTSE-100 briefly hit this current level 15 years ago.
Judgment Day now looks long overdue in fixed-income to my mind. UK Gilt yields have never been lower, meaning bond prices have never been higher. The German government today raised new loans at negative yields for the ninth time so far this year.
Yes, people claiming to be 'investors' are paying governments to borrow cash...cash entrusted to them by savers like you and me.
Owning a little rare, non-yielding property today could mean you care a lot less when everyone else tries to run from the destruction.
GOLD TRADING's return to Shanghai after the Chinese New Year saw prices add $10 per ounce Wednesday, but the metal then edged back in London.
Gold priced in Dollars slipped back to $1204 as US Fed chair Janet Yellen began the second day of her semi-annual testimony to Congress.
Her opposite number at the European Central Bank, Mario Draghi, was due to speak to the European Parliament later today.
Major Western stock markets traded flat near record highs as Greek and German politicians disagreed over how far Athens' new government has retreated from its anti-austerity demands.
European bond prices meantime rose, nudging yields lower, after Germany raised new loans at negative interest rates for the ninth time this year.
New data earlier showed activity in China's manufacturing sector little changed in February from last month, but new export orders dropped at a 20-month record according to the HSBC/Markit PMI report.
Returning from the week-long Chinese New Year holidays, trading on the Shanghai Gold Exchange today saw premiums above comparable London quotes rise to $4.30 per ounce from below $3 before the break.
Volume in the main domestic gold contract stayed light, but trading in the free-trade zone's kilobar contract – launched last autumn to attract foreign banks – rose near record levels, equalling more than one-fifth of the larger contract's turnover.
"What a difference [China's return] made" for global gold trading, says brokerage Marex Spectron's London office.
"Gold [had] opened in Asia around $25 lower from where China last saw it," says Swiss refiner MKS, also noting Wednesday's $10 rise on the "good demand evident throughout the entire session."
Gold bullion imports to China last year fell between 8-16% from 2013's likely record, says a new estimate from analyst Matthew Turner at Australian bank Macquarie.
Totaling between 1,150 and 1,350 tonnes, Turner's net import estimates weigh at least 30% greater than the 2014 private household demand reported three weeks ago by the China Gold Association.
Added to China's reported gold mining output, total supplies to the world's second-largest economy reached perhaps 1,770 tonnes on Macquarie's new estimates – twice the level of jewelry, bar and coin demand reported a fortnight ago by market-development organization the World Gold Council in its full-year Gold Demand Trends for 2014.
"2013 was exceptional," says the latest weekly commodities report from French investment and bullion bank Natixis, "in channelling outflows from physically-backed [trust funds] to Asian buyers, resulting in huge demand for remelting of 400oz bars into smaller kilo bars preferred by Asian jewelers and investors.
"Nevertheless, the drop in gold prices has [now] reduced scrap supply" both from Western investment holdings and from households trading in old gold jewelry to raise cash.