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China Gold Mania - Coins, Bars and Jewelry Sales Surge 108%
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.
Today we have acquired a large number of silver eagle monster boxes which a client liquidated but due to levels of demand we expect to have sold them by close of business today or tomorrow .
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.
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.
NEWS
“Given that the fundamentals remain as sound as ever, we remain bullish” - Bloomberg
Gold Helps China May Day Sales Rise 20% - Forbes
Hong Kong gold retailers overwhelmed by mainland shoppers – China
Gold still solid investment, despite recent price plunge, analysts say – National MultiMedia
COMMENTARY
Germany will think twice before saving France next time – The Telegraph
"Get Your Money Out Of Those Banks, In Those Jurisdictions, As Quickly As You Can" – You Tube
U.S. Mint gold bullion coins sales soar in April to highest in 3 years - Mineweb
Arizona Becomes 2nd State To Make Gold & Silver Legal Tender – Zero Hedge
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The bankers missed their chance to show gold had no value. They could have opened those massive doors at Fort Knox and the New York FED for public tours to show that they were empty because ,wait for the spin, gold has no value. They could have given away a 1 oz gold coin or a toaster, your choice, for opening a new account. As long as those immense vault doors are closed to the public one suspects that gold has value.
Don't take this completely the wrong way, but gold is priced where it is because there is a perception that it is scarce and that other people will want it. I personally have no use for gold. My guess is that 99.99999% of people have no personal use for gold. The same holds for diamonds. We are now learning that diamonds are not scarce, but most people do not look for them and if they do the cartel calls them "blood diamonds" or something. Also, if we are to believe our very ancient pre-history gold was not scarce either ... but now it is ... odd, eh? Who are the people who find a way to hoard and make things scarce when they are not?
Just ask'in.
Genius, Gold and silver have always been relativelly scarce. Plunderers in ancient times always went after the gold. Grave robbers the same. Humans have to use something for money. History shows the no one, anywhere, has ever come up with a better money than gold and silver. Unless you like being controlled by megalomaniacal tyrants. Then fiat serves.
Don't take this completely the wrong way, but I think you are historically and monetarily clueless.
Personally, I have no use for people who are willfully and arrogantly ignorant.
I just do not get it. Copper record high inventories and still over $3 a pound. Gold no inventories and 1440?
Copper has an actual use. Physical is everything and if you financialize the price you screw over the world's entire electronic device economy. Gold does not have an actual use and physical is just a tiny part of the trade. If you screw with price it means nothing to 99.99999 % of the world. What is not to understand?
If only the Comex was still setting the price for actual metal, this would be a great sale right now. Unfortunately, at least around here, there's no reference to Comex pricing any more. Seems only the paperboys and the miners pay any heed to the Comex price now.
Gold is the most moral of all the metals.
(That one is just for you, PUS.)
Yeah, the Chinese are really smart people ya know.... First they invest in real estate and it turns into a huge bubble that is about to pop. Added to that pile of misery they also invested in empty condo/apt buildings that will deteriorate into a flop house condition in 10 years. Now they are piling in on the gold mania. I wonder what they will do once gold hits 1100USD? Or 1000? Oh my, I can just imagine the riots in the streets.....
Hey muppetman......bury a box of that fiat your troll masters just gave you for your troll post and dig it up in ten years..........BWAAAAAAAA..........
It is funny to see muppets come out swinging.
http://www.youtube.com/watch?v=Q8e-e9xtFWA
Keep stocking up on those paper dollars and see how that works out for you this time.
from apmex
Any quantity $14.99 per coin over spot!
These are common-date, modern commemorative Silver Dollars
15 bucks over spot for shitty commerative silver dollars?
insane markup if'n you want that physical
I stopped by my local coin shop at lunch and bought a few silver maple leafs. He's abandoned the "spot plus" pricing model and simply has set fixed prices for coins, regardless of what spot is doing.
He had a few Maple Leafs left for $32. No eagles at all. Some buffaloes for $30.
He told me he was having a lot of trouble getting stock.
http://www.meattrapper.com
Chinese have a longer history and memory of paper vs real money. There are also quite a few of them and they will suck up every available ounce long before the "mania" stage. "Mania" in this case being loss of confidence in fiat money.
'Quite a few of them'. I love that - I would add that there are 'quite a few Indians' as well, who also buy a lot of gold. I've been making this same point for ages, but it seems the concept of 'other countries' is one that is difficult for many in the US to grasp. I suspect those same people have difficulty with the 'paper futures contracts are not gold' concept.
Given that personal posession of property and gold was outlawed till recently over there, gold would be a pretty safe bet for their kids future no?
They seem to be learning a lot from their first property bubble
(Imagine that!)
BBC showed gold stores in China and Hong Kong on the news last night....incredible demand...people lining up....I guess they want something solid. House prices there are still way too high so they are swithcing to other "physical" stuff.
One guy they interviewed gave his reason...."It's too cheap right now."
There you have it.
"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."
So then we are still supposed to believe the 'statistics' and market fundamentals apply, right?/sarc