Q1 physical gold sales up 20% in Germany as gold price hits $1,233

dancingshoes

dancingshoes

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By Peter Cooper

Gold prices began the week at their best for three months and immediately bounced higher again to $1,233 an ounce with silver outperforming with higher percentage gains at $17.74.

Meantime, the latest World Gold Council data revealed that the total demand for gold bars and coins was up by 20 per cent in Germany in the first quarter in a rush to get out of the then slumping euro.

Euro’s impact

The German economy may be the best performing in Europe at the moment but that has been partly down to a devaluing currency, and one sure fire way to protect against devaluation was to buy gold which is priced in US dollars.

There is also a good historical precedent for Germans to buy gold as twice in less than a hundred years paper money has become worthless: in the hyperinflation of the early 1920s and when the Nazi regime was annihilated.

Could the European Central Bank’s $1.3 billion bond buying program result in similar inflation? With deflation more of a pressing problem it seems unlikely but then again printing money does usually end up with money losing its value.

Then there are worries about the Greek debt crisis and whether that might produce a second round of the global financial crisis and concern about growing Russian nationalism and its invasion and annexation of Ukrainian territory.

Euro strength

Still we will have to see if Germans continue to buy gold now that the euro is rising against the US dollar in a spectacular reversal that has caught out many pundits in the foreign exchange market. Some later buyers of gold will have lost money in euros.

Demand for gold bars and coins was actually waning in other parts of the world in the first quarter with total global demand down 10 per cent while US demand for these physical hard assets dropped by 12 per cent.

However, with fears of rising US interest rates now being kicked further and further down the road, the recent weakness of the gold price looks overdone and a return to $1,300 seen earlier this year looks likely.
 
Gold price lacks direction after mixed signs on US economy - See more at: http://www.bulliondesk.com/gold-new...-signs-us-economy-95111/#sthash.sDlSsQBj.dpuf


The gold price recovered from another one-week low on Thursday afternoon after mixed US data and dovish Fed minutes played on sentiment.

Spot gold was last at $1,204.00/1,204.80 per ounce, down $5.30 on Wednesday’s close, having hit its lowest in a week again at $1,201.60 following the US weekly jobless claims figure.

The metal has come close to retesting the key psychological $1,200 level twice in the last two sessions – further downside pressure from the dollar may trigger another retest on Friday. Silver was up seven cents at $17.14/17.18.

US weekly jobless claims came in at 274,000, which was broadly in line with expectations of 271,000. For the past four weeks, however, the average of 266,250 is the best figure in 15 years.

Investors will have interpreted this as a strengthening labour market, which was directly cited as one of the factors that may sway the Fed into raising interest rates.

But sentiment soon soured after the release of forecast-missing existing home sales at 5.04 million and the Philly Fed manufacturing index at 6.7 against consensus at 8.1.

This pushed the dollar back from session highs – it was last at 1.1126 against the euro.

“Recent US data has painted a conflicting picture on the state of US economic momentum, causing indecision in gold following its correction on renewed dollar strength – driven by a jump in housing data,” FastMarkets analyst Tom Moore said.

In data this morning, the French flash manufacturing PMI was better than expected but its flash services PMI, Germany’s flash manufacturing and services PMIs and the eurozone current account all undershot.

The eurozone flash manufacturing PMI was better than expected at 52.3 but its flash services PMI missed at 53.3.

Sentiment has been mixed since last night’s release of the Federal Open Market Committee (FOMC) minutes from the April 28-29 meeting. These effectively ruled out a rise in interest rates in June – in line with market expectations – but gave no clue on whether a rise from near-zero levels could happen in September, December or even in 2016.

In the PGMs, platinum was last down $2.50 at $1,149/1,154 per ounce, while palladium was up $3 at $774/779.

Platinum market sentiment looks set to remain downbeat in LPPM Week this week where participants are increasingly frustrated by platinum’s failure to react positively to its fundamentals.



(Editing by Mark Shaw)
 
Gold Ends Flat as Traders Ponder U.S. Monetary-Policy Outlook

Gold closed near unchanged on Friday as investors adjusted their view on U.S. interest rates in light of recent comments by Federal Reserve Chairwoman Janet Yellen and signs of a pickup in inflation.

The most actively traded contract, for June delivery, closed 10 cents lower at $1,204.00 a troy ounce on the Comex division of the New York Mercantile Exchange.

Gold prices drummed a retreat after the U.S. consumer-price index, a measure of inflation, rose a seasonally adjusted 0.1% in April from a month earlier. Core prices—which exclude the volatile food and energy categories—climbed 0.3%, the largest increase since January 2013. Economists surveyed by The Wall Street Journal expected overall prices to increase 0.1% and core prices to rise 0.2%

While signs of higher inflation tend to boost demand for gold as a store of value, many gold traders worry that the uptick in consumer prices, which have so far lagged behind the Federal Reserve’s target of 2%, paves the way for the U.S. central bank to raise interest rates.

“The market is interpreting this as playing into the Fed’s hands for a rate increase,” said Bob Haberkorn, a senior commodities broker with RJO Futures in Chicago.

Still, prices made back most of their losses as investors continued to ponder the likely timing of the Fed’s first interest rate increase since 2006.

Federal Reserve Chairwoman Janet Yellen reiterated the U.S. central bank’s plans to raise interest rates in 2015 in a speech on U.S. economic outlook. Ms. Yellen, speaking to the Greater Providence Chamber of Commerce in Providence, R.I., said she continues to expect the U.S. economy to rebound from a soft patch during the first quarter.

Still, the comments, made just weeks before the Fed’s June policy meeting, suggest the central bank is unlikely to start raising rates at that event.

“Yellen’s statement can be interpreted as rate hike at the end of the year,” said Frank McGhee, a broker with Integrated Brokerage Services in Chicago.

Gold has benefited from the Fed’s easy money policies, which kept interest rates pinned near zero. Gold doesn’t pay interest or dividends and has an easier time competing with yield-bearing assets such as Treasury bonds when interest rates are low.

Write to Tatyana Shumsky at [email protected]
 
Almost at the peak already. Still haven't collapse? Is this old news?

Lots of people gonna jump soon.
 
you never realise that gold will not bottom out, if there is a day, there will be chaos in the world. many rogue military leaders are holding gold bullion, if the big banks dare cripple gold price, there will be military strikes whether in small scale or terrorist form of attack.


xpo2015 said:
Almost at the peak already. Still haven't collapse? Is this old news?

Lots of people gonna jump soon.
Click to expand...
 
gold will not succumb to stronger dollar and fed interest hike. NK will nuke the south and greece will default!:p:D


http://www.arabianmoney.net/us-stocks/2015/05/25/why-a-greek-default-would-be-utterly-disatrous/



Investing.com - Gold prices tumbled below the $1,200-level early on Tuesday, as a broadly stronger U.S. dollar dampened the appeal of the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery hit an intraday low of $1,195.70 a troy ounce, a level not seen since May 13, before trading at $1,196.70 during European morning hours, down $8.20, or 0.68%.

On Monday, gold prices tacked on 40 cents, or 0.03%, to close at $1,205.30 as trade volumes were light with U.K. markets closed for a public holiday and markets in the U.S. remaining shut for the Memorial Day holiday.

Futures were likely to find support at $1,191.50, the low from May 13, and resistance at $1,215.20, the high from May 22.

Also on the Comex, silver futures for July delivery lost 21.4 cents, or 1.26%, to trade at $16.83 a troy ounce, the lowest level since May 13. Silver closed at $17.06 on Monday, up 1.4 cents, or 0.08%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.7% at 97.14 early Tuesday, the strongest level since April 27.

A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

The dollar strengthened broadly after Federal Reserve Chair Janet Yellen reiterated Friday that the central bank still expects to start raising interest rates later this year if the economy continues to improve as expected.

She also attributed a slowdown in first quarter growth to "transitory factors", including a harsh winter.

The greenback received an additional boost after data showed that underlying inflation in the U.S. rose for a third straight month in April, supporting the case for a rate hike later this year.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

Investors were turning their attention to U.S. data on durable goods orders, new home sales and consumer confidence later Tuesday for fresh indications on the strength of the economy and the timing of a U.S. rate increase.

Elsewhere in metals trading, copper for July delivery dipped 0.9 cents, or 0.3%, to trade at $2.803 a pound. Copper rose 1.2 cents, or 0.43%, on Monday to settle at $2.823.

Meanwhile, the euro fell below the 1.09-level against the dollar as the prospect of a Greek default continued to weigh on sentiment.

Athens has warned that the country would be unable to make a €305 million payment to the International Monetary Fund due on June 5 if a cash-for-reforms deal with its international lenders is not reached by then.
 
Bond Traders Uncover Secret to Rates That Fed Just Doesn’t Get


Forget 2015. The real play for bond traders is 2016.
For years, the $12.6 trillion U.S. Treasury market has signaled -- correctly -- that the Federal Reserve was too optimistic in its outlook for the economy and interest rates. That’s no different now even though policy makers have moved closer to how traders view the world, which is to say that it wouldn’t be surprising if the central bank failed to lift borrowing costs this year. Despite the backup in yields in recent weeks, bond prices still signal the unexpected slowdown in the economy was more than just the result of some bad weather that kept Americans indoors and idled factories in the first quarter. Regardless of when the first increase comes, futures show traders don’t see rates exceeding 1 percent by the end of 2016, versus the Fed’s estimate of 1.875 percent.
Fed officials are “still optimistic and hopeful their policies are going to work the way they are intending,” Brandon Swensen, the co-head of U.S. fixed income at RBC Global Asset Management, which oversees $35 billion, said from Minneapolis. “What we have seen and what the market is pricing in is that it will be more of the same.” RBC predicts rates will only rise to 1 percent by the end of 2016, from near zero now, and as a result holds a greater proportion of short-term Treasuries relative to its benchmark. Since 2012, when the Fed started making its forecasts public, policy makers have consistently overestimated the strength of the economy.


Too Optimistic

They’ve cut their projections in nine of the past 10 meetings and chopped their year-end rate forecasts by at least a half-percentage point from 2015 through 2017. As recently as September, the Fed’s median rate estimate for 2016 approached 3 percent. It’s now less than 2 percent, still a percentage point higher than what the market anticipates. And traders are divided over whether the central bank can start raising rates at all this year.
That pessimism has been reflected in yields on the 10-year note, which are still well below its most recent peak of 3.05 percent last year. They were at 2.18 percent as of 6:30 a.m. in New York on Tuesday, according to Bloomberg Bond Trader data.
“The Fed has opinions; the market has positions,” said Jack McIntyre, who helps oversee $45 billion at Brandywine Global Investment Management in Philadelphia. “If the data doesn’t show marked improvement soon, they’re going to get pushed back into 2016.”
Fed Chair Janet Yellen said Friday she still expects to raise rates this year if the economy meets her forecasts, with a gradual pace of tightening to follow.


No Delay

She added that delaying the first increase until employment and inflation return to the Fed’s objectives “would risk overheating the economy.”
The problem is that a raft of disappointing data in the past month, from retail sales to consumer confidence and manufacturing, suggests there may be something more than just the weather that’s holding back growth.
That became evident after the recent collapse in energy prices produced a $150 billion windfall for Americans, according to Goldman Sachs Group Inc. Rather than spend it, as many analysts expected, Goldman says most the money was saved.
“The Fed doesn’t have any sort of magic potion to fix everything that ails the economy,” said Aaron Kohli, New York-based interest-rate strategist at BNP Paribas SA, one of 22 primary dealers that trade with the Fed. “The Fed can’t command people to spend money.”
Societe Generale SA’s Aneta Markowska sees it differently.


Labor Strength

The firm’s chief U.S. economist is confident any weakness is temporary and suggests the bond market may not appreciate how a strong labor market will translate into faster inflation -- and higher rates -- in the months to come.
Last year, the U.S. added more jobs than at any time since 1999. And excluding what households pay for food and fuel, consumer prices increased more than forecast in April, edging closer to the Fed’s goal.
“The idea that we’re at zero rates and the labor market is at full employment: those ideas just don’t fit together,” Markowska said from New York. SocGen predicts the central bank will raise rates twice this year and lift them to 2 percent by the end of 2016.
She also points to policy makers such as New York Fed President William Dudley, who have voiced concern that keeping rates low for too long threatens to create asset bubbles.
Nevertheless, there are some signs that a number of Fed officials are starting to question whether the central bank needs to re-think its approach to monetary policy.


Low Equilibrium

In the minutes of the Fed’s meeting on April 28, some said the “equilibrium rate,” or economist speak for where interest rates need to be for full employment and stable inflation, is “unusually low by historical standards.”
As a result, they asked whether the Fed was providing “sufficient accommodation” to the economy, even after holding its rate close to zero for more than six years and pumping trillion of dollars into the economy with quantitative easing.
“It justifies a low Fed funds rate,” said Margaret Kerins, the Chicago-based head of fixed-income strategy at Bank of Montreal, another primary dealer.

http://www.bloomberg.com/news/artic...ver-secret-to-rates-that-fed-just-doesn-t-get
 
That's me in the corner
That's me in the spotlight
Losing my religion
Trying to keep up with you
And I don't know if I can do it
Oh no, I've said too much
I haven't said enough


 
Gold prices usually bottom out at this time of year notes Frank Holmes


US Global Investors CEO and CIO Frank Holmes discusses Gold prices, China’s economic slowdown and the airline industry in Asia. He explains how gold prices usually put in their low point at this time of year and remains completely unfazed by the gold sell-off yesterday.


http://www.arabianmoney.net/gold-si...-out-at-this-time-of-year-notes-frank-holmes/




Runifyouhaveto said:
Paiseh, I am not sure about gold's trend.
But i just bought 2 ounces this month.
RUN is kachang puteh
If it goes up, i am happy
If it drops another 50% and I can accumulate more for retirement.
Click to expand...
 
China sets up $16bn fund to invest in gold mining projects


China has launched a fund that is expected to raise around $16 billion for gold-related investments, including developing gold mining projects, as part of the ‘Belt and Road Initiative’, reported China Daily today.

This dwarfs the C$170 million capitalization of the new Canadian Bitgold group that has just acquired GoldMoney for $49 million in shares (click here) and further underlines the likely future value of gold investment vehicles in the near future.

Big fund

The Chinese fund, expected to raise the target amount in three phrases, will be managed by Xi’an Silk Road Fund Management, a joint venture led by two large gold producers Shandong Gold Group and Shaanxi Gold Group with
Shandong Gold as the largest shareholder with 35 per cent and Shaanxi Gold having 25 per cent and the balance taken up by financial companies including Western Securities and Industrial Bank.

Press reports said the fund will become the largest to focus solely on gold-related businesses, including mining and other activities involved throughout the gold sector supply chain, and is expected to look at investment opportunities in countries likely to be included in the ‘Belt and Road Initiative’ a policy announced by President Xi Jinping in 2013 to promote investment in China’s major trade partners.

An anonymous source commented: ‘One of the most likely areas to attract investment will be gold mine projects in the northwestern route of the ‘Belt and Road Initiative’, through mergers and acquisitions of listed gold companies and mining firms…and the move is also a reflection of robust demand for gold in India and Thailand in the next couple of years.’

Huge demand

Officials estimate ‘Belt and Road’ countries account for more than half of the world’s gold production and 80 per cent of total gold consumption, with China and India the two largest nation consumers. China is the world’s largest producer and consumer of the precious metal.

There is also a lot of speculation about China’s plans for its huge gold reserves which have not been officially revised since 2009. A gold-backed yuan is one idea to rapidly advance the currency to reserve status.

In the meantime, gold investment owners will be wringing their hands at the thought of all this Chinese money heading their way. It can only increase competition for these very limited opportunities and raise prices.


http://www.arabianmoney.net/gold-si...-16bn-fund-to-invest-in-gold-mining-projects/
 
so smart wor?
buy gold = gold price go up = buy more expensive

so might as well buy gold mines. hahahaa
 
i really admire in an unbelievable way the PRCs flaunt and use their wealth. we need more PRCs here, they will bring prosperity to our island.

Runifyouhaveto said:
so smart wor?
buy gold = gold price go up = buy more expensive

so might as well buy gold mines. hahahaa
Click to expand...
 
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