Market Update GoldCore 27 June 2013

Market Update GoldCore

Gold Controls In India - Premiums Double As Strong Demand For Gold and Silver

Today’s AM fix was USD 1,232.00, EUR 945.51 and GBP 806.07 per ounce.
Yesterday’s AM fix was USD 1,229.00, EUR 942.85 and GBP 799.97 per ounce.

Gold fell $53.20 or 4.17% yesterday and closed at $1,224.10/oz. Silver slid to a low of $18.421 and finished down 5.46%.

Gold inched upward today after investors and speculators viewed the recent price falls as excessive and some began to dip their toes back into the market.

Gold tumbled to its lowest level in nearly three years yesterday after concentrated selling in electronic trading on the COMEX, less liquid Asian trading Tuesday night that led to stop loss orders being triggered and further price falls.

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Bullion dealers, mints and refineries have seen a small increase in clients liquidating physical bullion in June but nothing that would justify the scale of price weakness seen. There has been a small bit of panic selling which suggests capitulation and the market may be close to exhausting itself to the downside.

There are also many retail and wealthy buyers looking to accumulate at these lower prices – both in western markets and in Asia.

Physical demand remains robust internationally especially in China and India where premiums are moving higher again. In China, physical demand remains robust and premiums remain at elevated levels near $35/oz. In India, premiums charged shot to $20 an ounce overnight from $8-$10 on Tuesday.

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Despite futures prices falling in India to their lowest in more than a month, gold premiums doubled as dealers struggled to meet surging demand after a ban on bullion consignment imports.

India, the world's biggest buyer of gold, now requires importers to pay upfront for inventory, making it difficult for smaller jewellers with lower working capital to source supplies. The government also raised the import duty to 8% in May. India has ruled out a blanket ban on gold imports or any increase in customs duty from the current 8%.

Attempts to prevent Indians from buying gold are contributing to them buying poor man’s gold, or silver. There has been a massive increase in silver demand in India in recent months and the government's meddling and controls in the gold market will likely led to even more demand for silver.

Gold buyers in India are concerned after the India Gems & Jewellery Trade Federation asked its 42,000 member companies to stop selling gold coins and bars from July 1. The Indian government is believed to have put pressure on the powerful trade group in order to curtail India’s massive demand for gold.

News From Around The World

New EU Rules Will Force Large Depositors to Share the Costs of Future Bank Failures   BBC

Gold Drops Below Its Average Cash Cost   Zero Hedge

Video: Bull Case For Gold Has Not Changed: Jim Rickards   Yahoo Fina

"Has Gold's 'Bubble' Burst Or Is This Another Buying Opportunity?"

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If so, don't miss this opportunity to join us for a webinar on Tuesday, July 2nd at 1300 GMT. We will look at the performance so far in 2013 and the outlook for the second half of the year and more importantly for the coming years.

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• Where We Are Now In The Market Cycle
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• Learning From The 1970's Bull Market and the 1975/76 Price Collapse
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• Knowing When To Reduce Allocations Or Sell

ENDS

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