China Gold June Imports_0Gold imports by China from Hong Kong more than doubled to an all-time high in March as buyers underscored increased bullion demand in the world’s second-largest economy. This demand was fuelled no doubt by the record fall in the gold price on April 12th.

Mainland buyers purchased 223,519 kilograms (223.52 metric tons), including scrap, compared with 97,106 kilograms in February, according to Hong Kong government data. If this buying trend continues the Chinese look set to break all previous gold consumption records.

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From Goldcore;

 

Today’s AM fix was USD 1,454.00, EUR 1,108.74 and GBP 939.09 per ounce.
Yesterday’s AM fix was USD 1,463.00, EUR 1,118.67 and GBP 941.74 per ounce.


Cross Currency Table – (Bloomberg)

Gold rose $17.90 or 1.22% yesterday to $1,452.00/oz and silver finished down 0.29%.

The Reserve Bank of India issued a set of guidelines last week increasing restrictions on gold imports. According to UBS precious metals research they targeted the following areas:

1. To decrease gold imports, they aim to restrict local banks gold consignments.

2. Implement a restriction on using gold coins as collateral, limited to coins that are 50g.

3. Rules regarding non-bank lending against gold collateral will be set, covering regulations on ‘loan-to-value ratio, branch expansion, and review of Fair Practices Code provisions with regard to auction and transparency in loan terms.’

Silver, commonly known as, the poor man’s gold, is seeing a reverse trend in India compared to the world market where a drop in silver prices has increased demand.

In India, the demand for silver jewellery has fallen significantly and the investment demand has run dry even though the price has fallen to Rs 46,000 per kg. This looks to decrease the country’s silver imports by 12% to 2,200 tonne this year from 2,500 tonne last year.


Gold in USD, 1 Year – (Bloomberg)

Gold is still the favourite for Indian consumers and today 90% of gold imports are routed through banks.  This year’s Akshaya Tritiya festival in India falls on May 13th.  It is the second-biggest gold buying festival after Dhanteras. The Indian Wedding season has just begun and will continue until July.

India’s Central Bank, The Reserve Bank of India, seeks to restrict bullion imports because of the strain it is putting on their current account deficit. India is the largest importer of gold and more than half of it is used for jewellery.


Gold in Chinese Yuan, 1 Year – (Bloomberg)

China looking to overtake India as the world’s largest consumer of the yellow metal imported a new record amount from Hong Kong this March. The amount was 223.52 tonnes which is over two times the previous record high of 114.4 tonnes recorded in December 2012.

The China Gold Association reported that gold consumption jumped 26 per cent to 320.54 tons in the first three months from a year earlier. The World Gold Council stated that Chinese consumption totalled 776.1 tons in 20912, down from 779.8 tons the previous year.

Gold imports by China from Hong Kong more than doubled to an all-time high in March as buyers underscored increased bullion demand in the world’s second-largest economy. This demand was fuelled no doubt by the record fall in the gold price on April 12th.

Mainland buyers purchased 223,519 kilograms (223.52 metric tons), including scrap, compared with 97,106 kilograms in February, according to Hong Kong government data. If this buying trend continues the Chinese look set to break all previous gold consumption records.

We expect The World Gold Council’s Q1 demand report to confirm the strength of Chinese demand for gold bullion.

NEWS
Gold extends losses; ETFs at 4-year low – Reuters

RBI curb on gold import likely to raise bullion prices – The Economic Times

Gold Imports by India Seen Topping 100 Tons for a Second Month – Bloomberg

Gold’s Biggest Drop in 30 Years Fails to Deter Advocates – Bloomberg

COMMENTARY
Suicide Sacrifice to God of Market – Max Keiser

Jeremy Grantham: “We Have Been Conned” – Zero Hedge

Gold Assets in Fund Paulson Holds at Lowest in Four Years – Bloomberg

 

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  1. Gold is doing some serious damage to the Indian balance of trade as the rupee falls in value. Thus the government tries to restrict sales to support their currency.  It will probably not work since gold is becoming the famous Giffin Good, a thing which increases in value as the demand increases.  The small downtick in silver consumption is not material since that 300 ton drop will be taken up by China, Indonesia and Japan for their solar and industrial uses.  If China continues buying gold at this rate it tell me at least two things. 
    China will buy the entire world’s production of gold ( approx 2,500 tons of mined gold and some of the scrap)
    Price is not material at this time
    Someone is losing gold at light speed and does not seem to care about the loss
    There will be little left for others to purchase, so the gold chase will ramp up this year
    Gold will go into an even more severe shortage since it’s the litmus test of currency values
    Gold won’t be available as collateral by Euro Banks just when they need it
    Euro bank problems will increase, creating more desperate gold theft measures to stave off collateral collapse
    Scandals, manipulation and suppression of this metal pushing it’s price will increase dramatically
    Smaller resource rich governments will see that their stocks of gold must be ‘protected’
    More brush wars will crop up as TPTB seek gold to replace their depleted stocks from national vaults
    More conflict in Africa will occur as China and the west chase increasingly scarce gold mining assets.
    More people will begin to see gold as an inflation salvation as inflation heats up internationally
    China’s economy flags so the government’s national policy of gold will increase, aided by their own price manipulations of same
    There will be a flash point sometime during this relatively peaceful time period when gold is purchased without large scale conflicts.
    Then things will get heated.  Prices and how our government reacts are not predictable at this time since the critical mass events have not occured yet IMO

  2. It wouldn’tbe the worst investment in the world to buy some gold. If its price ramps up while silver is being pressured downwards, it would not surpise me to see a gold to silver ratio of 75 or greater, something that is sympomatic of both a recessionary enviroment which is becoming a world wide problem as well as phenomenon that may be unique to us in this present era.  Gold taking on its traditional form; a backup and support for currency value.

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