China Gold Mania – Coins, Bars and Jewelry Sales Surge 108%

There continues to be difficulty in securing physical bullion in large volumes, particularly in the small coin and bar market and particularly in the silver market.   The Shanghai Commission of Commerce said today that sales of gold and jewelry jumped 108% from a year earlier, leading all other categories.
This past May Day weekend saw retail sales rise by as much as 20%, most of it thanks to people shopping for gold jewelry.
The long term supply demand fundamentals will almost certainly lead to higher prices. We continue to believe gold will surpass its real inflation adjusted high of $2,400/oz in the coming years.

2013 Silver Eagles As Low As $4.99 Over Spot at SDBullion!

From Goldcore:

 

Today’s AM fix was USD 1,456.00, EUR 1,106.22 and GBP 935.07 per ounce.
Yesterday’s AM fix was USD 1,469.50, EUR 1,113.60 and GBP 942.95 per ounce.


Cross Currency Table – (Bloomberg)

Gold fell $17.30 or 1.17% yesterday to $1,458.70/oz and silver slid to $23.24 and finished down 2.60%.

Gold remains under pressure despite very robust demand and anaemic supply globally.

This suggests that speculators in the futures market continue to hold the upper hand. While this may continue in the short term and lead to further short term weakness in the price, the long term supply demand fundamentals will almost certainly lead to higher prices. We continue to believe gold will surpass its real inflation adjusted high of $2,400/oz in the coming years.

The U.S. Federal Reserve’s decision to maintain its loose monetary policy will support gold as the Fed’s money-printing to buy assets will stoke inflation – it is not a question of if, rather when.

Gold will also be supported by the ultra loose monetary policies from the ECB and the Bank of England.

The Fed reiterated it would continue to buy $85 billion worth of bonds every single month to support the sickly and weakening US economy.

Stocks fell on the statement and gold tracked other markets lower despite renewed worries over the Chinese, Eurozone and U.S. economies after the latest economic data showed the real risk of a global recession or depression.


Gold in USD, 2 Year – (Bloomberg)

There continues to be difficulty in securing physical bullion in large volumes, particularly in the small coin and bar market and particularly in the silver market.

The Shanghai Commission of Commerce said today that sales of gold and jewelry jumped 108% from a year earlier, leading all other categories.

This past May Day weekend saw retail sales rise by as much as 20%, most of it thanks to people shopping for gold jewelry.


Gold in Euros, 2 Year – (Bloomberg)

According to the Shanghai Commission of Commerce, retailers in the city reported total sales of 3.37 billion yuan ($539 million) between Monday and yesterday, up 18.8% from the same period of last year.

Sales of gold jewelry and even gold bars rose as gold prices fell and started to look more affordable. Demand may continue or increase as this is the start of wedding season in China.

In Asia, supply remains tight and premiums are high at $3 over spot in Hong Kong.

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Gold in GBP, 2 Year – (Bloomberg)

Hong Kong retailers report they were swamped over the three-day May Day holiday by tens of thousands of mainlanders in search of one thing: cheap gold.

There were long queues outside many shops and the China Gold Association reported that gold sales had tripled on many days.

Investors are now waiting for the US non-farm payrolls report for April scheduled for release on Friday. Given the US economy is weakening, the number is likely to come in weaker than expected which should lead to safe haven demand for gold.

Comments

  1. While sales of fake bullion bars in china surge, here at home the advertisements for PM’s are becoming priceless!
     

  2. As my Pops always told me, Pay yourself first, and since our jobs or what ever, ever pay us, swap fake for Real!

  3. You can bet that these Chinese buyers ARE NOT Chinese factory workers. If they could afford gold or even Ag they wouln’t need anti-suicide nets around the factories!

  4. Europe mania up next? http://www.zerohedge.com/news/2013-05-02/ecb-technically-ready-ask-depositors-pay-banks-holding-their-money
    The new deposit guarantee: “You are guaranteed to not get your money back”

    I wonder what form of “asking” will take place this time…
    The title should say “ask depositors to pay banks holding their money even in nominal terms beside real terms”

  5. widget  
    NIRP is pretty new  to the Eurozone. First it was concealed but now it’s just becoming more obvious 
    The Swiss and French banks have been offering this for depositors who are fleeing the PIIGS banks at a rate of tens of billions of Euros in quiet but large bank runs.   Since Cyprus the jog’s become a race to the exit.  Better to lose 50 BPS in NIRP yield than 90% loss to a Cyprus event on one’s bank account. 
     banks receiving these funds can’t find places to invest the funds at anything that provides a yield to investors AND a return to the investing bank. The thieving banks get the first dip into the yield and they will take 100% of that investment yield and then some.
    I’ve noted that Fidelity’s MMA is NIRP at this time.  The actual  yield is -2 BPS. I saw this in the most recent investor bulletin from Fidelity
    Fidelity does not want to be seen that they are stealing their client’s funds so they rebate 3 BPS to the client yield so they can celebrate a 1 BPS income.  That’s $10 for each $100,000 in the account. Can you spell Happy Meal.  Imagine if you were a senior with $1,000,000 placed with this ludicrous brokerage.  I guess the $100 return will go a long way to filling a couple of bags of groceries.
      Stealing clients money will require some steely balls, like bail-in in Cyprus.  NIRP is slow motion of death to your funds when coupled with inflation. But if someone is relying on income, the slo mo death comes pretty quickly.  Sorry about the rant but I’m pissed this AM for no particular reason.

    • “NIRP is slow motion of death to your funds when coupled with inflation. But if someone is relying on income, the slo mo death comes pretty quickly.”
       
      Such is also the fate of UST bonds.  The 10-year bond is paying just over 1.6% interest now.  This is a full percentage BELOW even the fake inflation number that Bernanke admits we have.  It is WAY below the 9.4% of actual inflation.  Compound that with the fact that all those “earnings” on UST bonds will then be taxed, adding more injury to the insult.
       

  6. BTW  I just checked with 2 LCS. 
    NNB is $4 over spot for silver rounds, 4 week delivery and money up front. ASEs are $10 over spot with same delivery time.  Orders require cash up front  Delivery time is a best guess.
    Another retailer/wholesaler with a store front LCS says he has 140 silver rounds available for sale. Price is  $4 over and no replacement chances for 4 weeks. He does not want to sell anything unless it is very high price over spot but has no immediate delivery inventory so he does,in reality, want to sell anything. He is also take money up front orders with 4 week plus delivery time and mentioned that the June July time frame should see supplies freeing up. He confessed that he did not know why the wholesalers were playing this game.
      He said 1000 oz bars are regularly available but these are not his market, saying there is no real shortage of these ingots but that’s no help to local buyers.  Most buyers of the 1000 oz are industrial users and those who melt to covert to 1 oz coins. I gave him the silver shortage stats of 118 MOZ this year but he did not accept it, saying that in the US there is a lot of above ground stocks of silver and scrappage that can come to the marketplace when prices rise.  Maybe. Maybe not.  How many sets of grannys silver remain to convert. How many ounces of junk bullion are still in weak hands. Not much and not many. No one I know is selling JB to an LCS to get FIAT. 
    I didn;t want to argue with him about his above ground silver supplies, knowing that there are maybe 1 billion ounces in that category But that’s barely 1 year of supply so bleeding this down won’t solve the supply issue. unless prices go back up to $40-50 an ounce.  That will be a price that may have people producing silver from their stacks unless prices are in a very rapid upward momentum-drive arc.  It will probably take a price well above $50 to get people to cut lose of any appreciable part of their stacks.  A billion ounces of silver does not go that far any where. 

    • Thanks for the report AGXIIK, it just supports the idea that there is plenty of silver available in investory, for now.
      When do we know the shortages are for real?   The dealers no longer sell, but only buy at a large preminum, we are not there yet, not even close.
      We need new investors to start buying physcial silver, and the only reason they are going to buy is if they see and feel inflation, today the inflation fear is not there.    If there is inflation, there will be plenty of buyers at $50 oz.
       

    • My main source for junk silver i snow out to 6 weeks delivery. I am passing to much risk of never getting your goods.

  7. zman  I think there is plenty of silver for now but only if people or businesses who hold an amount of silver are willing to release their stores at this low price.  1 billion ounces in  present stacked form is a lot and would make the silver shortage non-existent. 
    For now.
    But if they sold and ‘ate their seed corn’ then the next year would be beastly low in inventory   Who knows, maybe it will come to that as prices ooze upwards, convincing people that the new and slightly higher prices are a bear market rally and they sell into it.  If I had even a clue of what was going on 3 months ago when silver hit $33 I would have unloads tons of it and re-bought at $25 from Doc.  Oh well.  Maybe I’ll do it next time or maybe not.
    I’ll still rely on the format of 1979 and 1980 when silver and gold hit an air pocket and dropped double digits.  then boom. I keep my fingers cross as I would be quite happy to help the shortage by releasing maybe 20-25% of my stack at $50 plus an ounce 
    There have been some serious sacrafices around the homestead in order to stack over the last 3 years.  Cheers.

  8. I honestly don’t think silver will take off until gold does. The investment demand is simply not there and industries are slowing down in the majority of industrial areas. TPTB can easily hold the price in check until then. Either gold has to take off or the silver manipulation story has to go mainstream,

  9. Sacrifices is not the word for it AGXIIK more like losses I’m getting to a point now when I sell to get some Fiat for the bills and such I’m at a break even mark now but better off than most. But it doesn’t stop me from Stacking More. My problem is I’m on commissions and I have to wait to get paid, sometimes a couple of months but then I may have 2 or 3 closings and a good payday to settle me down again.
    At these prices I just have to take a chance and buy and get ready for what’s coming down the road.

  10. Me too Charlie  I’m been on commissions since 1992 when I left the bank and started ny commercial loan brokerage.  With the loan drought for businesses, commissions are spaced a bit apart at times and sometimes they clump. I have been trading some gold for silver with the GSR at 60 plus.  Sacrifices are one thing, losses are another so I know how you feel.
      I think we are a bit alike in seeing advantages at these lower prices and maybe getting  $2-3 over spot on our sales. Some goes to pay bills and some goes back into the stack at lower prices to retain the basic level of the stack.  No one likes to dig into their silver to take care of business but that’s the way the game goes sometimes. A well placed sale can turn some good results.  One gold trade gave me a $200 an ounce loss which I will use in 2013 as a capital loss for taxes.  The turn into silver will make it back and then some once I move the ounces at the show.  Cheers to you.
    PS  I downsized the business intentionally and stacked for that strategy was fully engaged.  My income taxes Calif and Fed werre obnoxious  Now overhead is lower and taxes are negligible.

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