While western investors focus on Federal Reserve’s quantitative easing tapering timelines, the bigger gold story is taking place in China. The negative sentiment currently attributable to the gold price masks the accumulation of gold by the Chinese who are set to overtake India this year as the world’s top gold consumer. This is a startling turnaround given the Chinese embargo on gold ownership was only lifted as recently as 2003.
The Chinese yuan is at a 19-year high against the U.S. dollar which is providing support to local Chinese buyers through cheaper local bullion prices. What is unknown is the real volume of gold bullion purchases by the Chinese central bank as it looks to reduce its exposure to the U.S dollar.

Silver Buffs Generic Add2
From Goldcore:

Today’s AM fix was USD 1,287.75, EUR 964.25 and GBP 830.11 per ounce.
Yesterday’s AM fix was USD 1,275.50, EUR 960.61 and GBP 838.04 per ounce.

Gold rose $1.50 or 0.12% yesterday and closed at $1,285.10/oz. Silver fell $0.01 or 0.05% and closed at $19.51.

Gold is up from a three week low hit early yesterday.  The recent movements in the gold price have been driven by investors looking to short cover as they are selling long their U.S. dollars and buying other currencies and gold. The weakness in the U.S. dollar, which is at a seven week low, has been driven by the comments from the Fed which has given strong hints that it will begin tapering QE in September or soon thereafter.

While western investors focus on Federal Reserve’s quantitative easing tapering timelines, the bigger gold story is taking place in China. The negative sentiment currently attributable to the gold price masks the accumulation of gold by the Chinese who are set to overtake India this year as the world’s top gold consumer. This is a startling turnaround given the Chinese embargo on gold ownership was only lifted as recently as 2003.


Support & Resistance Chart, 5 Year – (GoldCore)

The Chinese yuan is at a 19-year high against the U.S. dollar which is providing support to local Chinese buyers through cheaper local bullion prices. What is unknown is the real volume of gold bullion purchases by the Chinese central bank as it looks to reduce its exposure to the U.S dollar, such is the volume of dollar reserves on account.

With some $3.2 trillion in official reserves, the Chinese have gone about their central bank gold bullion accumulation programme quietly and with little fanfare. When the dust settles on 2013 the big story will be ‘China, Less Dollars, More Gold.’ Whether or not the big game is played out and the Chinese back the yuan with gold, the long term prospect for the gold price is very positive.

GoldCore’s Stephen Flood was interviewed on CNBC Squawk Box yesterday and discussed the demand for gold from China, gold as a diversification element in portfolios and about the risks of a stock market fall. With central banks grappling with a stimulus dependent capital market and a fragile economic recovery, the risks of a downside move in the stock markets are significant. GoldCore 2013 market outlook and long term price expectation is for gold to reach its inflation-adjusted high of $2,400.

Louise Yamada, the respected technical analyst, views gold as still technically weak.  In an a interview with Bloomberg she said gold “will need a lot of repair to come out of this bear market, .. the recovery that we have seen is fragile, and monthly momentum is in steep decline.”

Eagles sale(2)GoldCore’s trading  desk is seeing considerable physical interest at these levels, with many clients viewing the current price as an attractive entry point. Buyer to seller interest is seen at 2:1.

NEWS
Gold gains for second dayas dollar weakens - Reuters

Gold Climbs Before Jobless Report as Investors Weigh Stimulus – Bloomberg

BoJ keeps monetary policy on hold - The Financial Times

COMMENTARY
“Hello HSBC, This Is JPMorgan – We Urgently Need Some Of Your Gold” – Zero Hedge

COMEX Deliverable (Registered) Gold Declines By Almost 60,000 Ounces – Jesse’s Café Américain

Marc Faber: The Fed Will Increase QE – The Daily Reckoning

 

  1. You can always count on CNBC.   No mention of $85B of printed money out of thin air or an quadrupling of the Fed balance sheet.  And no mention of BoE’s bloated balance sheet…   Nothing to see here…. 

  2. America is too busy playing with their smart phones to actually act smart and buy silver and gold.  Americians are about to lose all their money, sure hope Homeland Security is ready to deal with civil unrest. Distractions distractions distractions. . .

    • Not all…but most. 
      The dollar has been king for so long the masses are asleep to what is coming.  No comprehension.  DHS will be there to herd them when they wake up in a nightmare.  

  3. When the Soviets Collapsed the Capital (1′s & 0′s and Gold) fled West.
    When the West collapses all 1′s and 0′s will suddenly become irrelevant as it is the Western System via IMFonomics that alowed the 1′s and 0′s to flow from Russia in the first place, and to even exist as ‘Money’.
    So what we are looking for is a ‘Capital’ flow from West to East … All I see is 1′s and 0′s flooding back to the IMF ‘reserve’ countries mostly the US from the East, and shiny Gold bars flowing East.
    These numsculls at CNBC don’t understand that what is really happening is that Gold is returning to its place as true Capital, and that the digital fiat is about to die. But they never, never were trained to think that this was possible at University, so it’s not possible right???
     
    They will wake up in the future and realize that the Capital WAS flooding East and that their system was dying all the whilst they were sleeping, and they failed in their job to inform their country. But it’s not like their job is to inform the public of economic reality, MSM are all mortgaged to the hilt, and will never stray from the teleprompted lines that keep their creditors happy, and their advertisers away from their competitors. BIG Reality Check coming soon, and Keynesian Economists will be more common that McDonalds clerks.

    • “These numsculls at CNBC don’t understand that what is really happening is that Gold is returning to its place as true Capital, and that the digital fiat is about to die.”
       
      Careful who you call “numsculls”.  LOL
       
      My thought is that CNBC is saying exactly what their PTB bosses want them to say… which is a lot of BS and truth avoidance of the highest order.  Can we say MOPE?  Yep, we can.

    • @WillNotBeASlave
       
      Indeed they are!  I watch CNBC from time to time but not for their analysis.  They have a few guests on at times that are worth watching. Other than that, I just watch the tickers with the sound off while doing stock and fund research on my laptop.  As with any of the media, take from them that which seems useful and discard the rest.  It is like panning for gold with a ton of sand and gravel for every small nugget or few flakes of “color”.  :-)

  4. Over the past few hours the gold and silver price is being manipulated heavily, I forex trade CDF’s for a living and some very unusual downward pushes against the trend have occured this morning. Not just peaks and valleys but forceful slashes down as if someone was trying to force it down on by short random spikes more violent than I have seen in a while.

  5. In the mid-late 1940s, the US was the world’s one and only super power.  That power was industrial (untouched by WW-II), economic, political, and military.  This was backed by the largest gold hoard on Earth of about 22,000 tons.  As Howard Buffet pointed out in his 1948 speech on the subject of gold and liberty, gold is the rock solid foundation for personal liberty.  He explains this in detail, so I won’t go into it here but anyone who has not read this speech really should do so.  It is quite illuminating.  Pity that his son, Warren, just doesn’t get it like his old man did.  
     
    Anyway, I digress… gold is also a large part of the foundation of national sovereignty.  As we look ahead into the future, our vision may be clouded by the multiplicity of events that have yet to occur and that affect each other when they do.  But some things still seem at least somewhat clear.  Foremost among these is that the fiat money scheme is winding down and will, at some point, come to an end when all the pipes of the fiat money system are clogged with unpayable debt.  What then will nations use for money?  Why gold and silver, of course.  These have been money for over 4,000 years and through some very harsh, desperate, and dangerous times.  They will be again one day.  While we have no idea when this will occur, THAT it will occur seems pretty clear.  When it does, those who have the gold WILL rule those who do not.  Silver likely will also take its rightful place as a monetary metal.  Stack on, friends.  Just because our fellow Americans who do not stack and our own government are not smart enough to be stacking too is no impediment to our own stacking.  In fact, it aids us considerably because they are not in the PM markets, bidding up the prices.

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