Market Update GoldCore - Gold Premium Surges In China

Market Update GoldCore

Gold Premium Surges In China - Wise ‘Aunties’ And Wealthy Buying

Today’s AM fix was USD 1,405.25, EUR 1,074.68 and GBP 918.64 per ounce.
Yesterday’s AM fix was USD 1,396.75, EUR 1,072.61 and GBP 915.00per ounce.

Gold climbed $27.10 or 1.96% yesterday to $1,412.00/oz and silver also gained 2.57%.

Gold inched down today after yesterday’s 2% gain. Gold was higher in Australian dollars after the Aussie dollar fell on concerns about the Australian economy.

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Monday’s economic data showed U.S. manufacturing activity had slowed to the lowest level in almost 4 years. The still fragile nature of the U.S. economy will support gold.

Poor economic data is confusing the bulls who continue to under estimate risk. The monthly nonfarm payrolls figures out on Friday will give further guidance regarding whether the U.S. is tipping into recession.

Deutsche Bank has recommended buying gold in Japanese yen and Australian dollars.

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Photos of Chinese “aunties,” a term of respect for older women, clearing shelves in goldsmith shops made headlines in government media such as the People’s Daily and millions of Weibo microblog accounts after the 14% plunge in prices in the two days through April 15.

The biggest such drop since 1983 was seen as an unprecedented opportunity by some, which prompted fabricators to replenish inventory by taking delivery on the Shanghai bourse.
To characterise Chinese demand for physical gold as solely from “aunties” is to simplify Chinese demand. Indeed, besides Chinese people buying gold, Chinese companies and of course the official sector and the People’s Bank of China are also likely accumulating gold.

The significant broad based demand for gold in Asia, and particularly from India and China, continues to be ignored and under estimated by gold bears such as Nouriel Roubini.

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Insight: Cyprus, Energy & Gold: Wealth Protection In A Lawless World

April's edition of Insight takes a close look at the recent banking crisis in Cyprus and how it is causing other states to consider the imposition of taxes on depositors' savings. The reasoning behind these 'taxes' is to part cover the colossal levels of  indebtedness that most nations find themselves in.

Chris Sanders, our Insight April contributor, maintains that it is only capital accumulation enabled by real economic growth that can alleviate the massive levels of indebtedness. Unfortunately, Sanders finds that this is nigh on impossible given the excessive energy costs required, or as he puts it, 'the marginal energy to power such growth is not there to do so.'

On April 15th, a small number of traders executed a suspicious sale of futures on the COMEX in New York which resulted in an 18% fall in the price of gold. Sanders points out that on the one hand we have this level of indebtedness that isn't going to go away, and on the other, we have a financial system that appears to operate outside the general rule of law. When you take everything into account, Sanders surmises that it's all a great advertisement for holding gold or silver in secure storage on an allocated basis.

ENDS

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