Asians Drive Gold Demand to 30 Year High

Asia is seeing a new gold rush. Demand for gold bars, coins and jewellery has soared as bargain hunters try to capitalize on the dip in prices. In Hong Kong and Beijing customers lined up outside banks and jewellery shops to make purchases and in some instances there was not enough physical metal to meet the demand. The Shanghai Gold Exchange’s cash contract hit a new record high yesterday (43 metric tonnes, up from 30.4 on April 19th) while gold coin sales at the U.S. Mint have nearly tripled in April against last month’s figures.  Joni Teves of UBS research said, “Physical markets have responded to the much cheaper gold price levels,” and “our physical flows to Asia have been particularly elevated this week.” Asian investors demand for the physical yellow metal has supported the gold price, rallying it up 8.1% from last week’s low.

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From Goldcore:


Today’s AM fix was USD 1,417.25, EUR 1,091.70 and GBP 931.05 per ounce.
Yesterday’s AM fix was USD 1,425.00, EUR 1,092.54 and GBP 935.04 per ounce.

Cross Currency Table – (Bloomberg)

Gold climbed $24.50 or 1.75% yesterday to $1,425.40/oz and silver finished +0.82%.

Asia is seeing a new gold rush.

Demand for gold bars, coins and jewellery has soared as bargain hunters try to capitalize on the dip in prices.

In Hong Kong and Beijing customers lined up outside banks and jewellery shops to make purchases and in some instances there was not enough physical metal to meet the demand.

The Shanghai Gold Exchange’s cash contract hit a new record high yesterday (43 metric tonnes, up from 30.4 on April 19th) while gold coin sales at the U.S. Mint have nearly tripled in April against last month’s figures.

Joni Teves of UBS research said, “Physical markets have responded to the much cheaper gold price levels,” and “our physical flows to Asia have been particularly elevated this week.”

Asian investors demand for the physical yellow metal has supported the gold price, rallying it up 8.1% from last week’s low.


Gold in USD, 1 Year – (Bloomberg)

The Financial Times interviewed Haywood Cheung, president of the Hong Kong Gold & Silver Exchange Society, who noted, “the exchange had effectively run out of most of its holdings as members looked to meet a shortfall in supply amid rampant retail demand for gold, and in terms of volume, I haven’t seen this gold rush for over 20 years,” he said. “Older members who have been in the business for 50 years haven’t seen such a thing.”

Asian traders confirmed that investors are paying double the premiums to acquire the physical asset.

Chow Tai Fook, the Hong Kong based world’s number one jeweller by market capitalisation, noted that in some shops they had sold out of gold bars.


Gold in Japanese Yen, 5 Year – (Bloomberg)

China is the 2nd largest consumer of gold in the world, but may outpace India this year.

Japanese investors and store of wealth buyers are seeking refuge in gold bullion due to currency devaluation and inflation concerns. They are set to become net buyers of gold for the first time in eight years as the yen’s decline and looming inflation drive them to seek refuge in bullion, according to Standard Bank Plc.

NEWS
Asian bargain hunters pile into gold – The Financial Times

Gold Near One-Week High as Investors Weigh Physical, ETP Demand – Bloomberg

Gold falls from 1-week high; ETFs slip – Reuters

Gold gains for third session, reclaims $1,400 – Market Watch

COMMENTARY
Bill Fleckenstein: Hold Tight To Your Gold – Zero Hedge

Gold Crash? Hmmm – Mauldin Economics

Cramer: Gold Bulls May Have the Last Laugh – Yahoo Finance

When Roosevelt Ditched the Gold Standard – Bloomberg

 

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Comments

  1. All of these headlines shouting about “Greatest Demand Ever”  and “Unprecedented Shortage”
    Question:   Why is my gold and Silver going down in price then?   Please don’t say it’s manipulation.  They did that last week.

  2. It seema a lot of Asians believed that idiotic Reuters headline from yesterday. Which, on a true currency inflation based calculation, is in fact more true than not, despite the silliness of raw numbers.
     
    Still, the paper-boys are pushing ticket values down, in their desparate ploy to drive off delivery demands. Try as they might, though, real-world backwardation is too persistant a force for them to wish away with smoke and mirrors. This ‘Hail Mary’ pass downfield can only worsen the situation, given that the Longs are stoically absorbing the nominal costs of remaining firm and the exterior world-wide drain on any prayer of keeping up the hypothecation ruse is evaporating like a pan of gasilone on the floor of Death Valley at noon.
     
    The signs of delivery defaults are getting bigger and brighter with each passing day.

  3. One can only wonder how many of those eager people who are lining up outside of jewelry shops and other PM outlets are walking away with fakes.  You can bet the chinese counterfeiters are laughing their way to the bank…er…mattress after unloading their creations on unsuspecting buyers.

    • Never forget THE cardinal rule in China, Mammoth.  You can screw the round-eye all you want.  You can even screw the Japanese and the Koreans.  But if you screw a fellow Chinese, you WILL get a 9 mm lobotomy.
       

  4. I’ve been watching the Ag premiums. What I’m seeing is higher premiums for .9 than for .999. WTH

    • I know what you mean, this whole market is upside down and bassakwards. Just ask yourself what should the market do and expect and do the opposite yourself. I’m paying $1.50 over spot for junk pre-64 at my LCS. Always been able to get it at a discount in the past.

    • 90% is no longer made so when it is snapped up and stashed/melted down there won’t be much available. Supply and demand, lower the supply, higher the demand, higher the price.

    • @Tiger:  The thing now is whether one can get US 90% silver coins at all, not what is demanded in price.  I agree that it is now often cheaper to buy 0.999 silver than it is to buy .90 silver.
       

  5. doesnt really matter what the asains are doing …. gold isnt at a 30 year high… 

  6. It’s not my fault that the Asians are getting out of dollars and into Gold.  It’s no skin off of my back. 

  7. 90% is the most real of all real money currencies.
    People know that even though the .999 is great stuff as are the ASEs   Junk bullion, Constitutional silver is, in the mind of the buyer, as good as .999 but less expensive to their buying budget  It sells at a premium because of the buying frenzy and its increasing scarcity.  Dey jus’ ain’t makin’
    no mo’ of this good s****

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