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Dubai Gold Demand Increases Eightfold; October Eagle And Kangaroo Sales Strong

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Gold slipped to one week lows today despite the U.S. Federal Reserve vowing to maintain its ultra loose monetary policies. Speculators may be taking profits from a recent run up in prices.


Gold in GBP, 5 Year - (Bloomberg)

Gold has risen 8% since hitting a three month trough on October 15 as value buyers bought gold.

The Fed yesterday sounded a bit less optimistic about economic growth as it announced plans to keep buying $85 billion of U.S. bonds per month. The central bank noted that the recovery in the housing market had lost some steam and suggested some frustration at how poorly the labour market remains.

Many of the world’s largest banks have been accused of manipulating the $5.3 trillion a day global foreign exchange market. Citigroup Inc. (C:US) and JPMorgan Chase & Co. (JPM:US) are putting their top London currency dealers on leave as regulators and the U.S. Justice

Department are probing the manipulation of foreign exchange rates. The investigation began examining the traders’ use of an instant-message group. The roster of banks in the group changed as the men moved firms and also included Barclays Plc, Royal Bank of Scotland Group Plc and UBS AG.

The five firms account for about 47% of the massive foreign exchange market. Two other traders, who weren’t part of the conversations and who asked to not be identified because they do business with those involved, said that they and others in the market referred to the message group as “The Cartel.”

Despite a slight drop in physical demand from China in recent days, physical gold demand remains robust in India, the Middle East and amongst coin buyers in western markets.

Demand for gold in the Middle East remains robust and there has been an eightfold increase or 700% increase in demand in recent years. Geopolitical uncertainty in the region, from Libya to Egypt to Syria and Iraq and Iran is leading to demand for bullion.

Thus, the Dubai Gold & Commodities Exchange plans to list a spot gold contract in the second quarter of next year. The bourse, which offers gold and silver futures, is talking to local merchants and industry organizations and aims to get regulatory approval for the product by early 2014, Chief Executive Officer Gary Anderson told BloombergDemand for bullion in Dubai expanded eightfold in the last six to 10 years, he said.

Dubai accounts for about 25% of global physical gold trade and the United Arab Emirates will grow as a precious metals trading hub partly because of its location near the largest consuming nations, according to the Dubai Multi Commodities Centre, which owns a majority stake in the DGCX.

The size of the spot gold contract will probably be 1 kilogram (32 ounces). While there are “no concrete plans” yet for other precious metals products, a silver spot contract and platinum and palladium contracts may be possible in the future, Anderson said.


Gold in EUR, 5 Year - (Bloomberg)

Sales of gold coins and bars recovered in October, figures from two of the world’s leading mints show, suggesting physical buyers remain robust despite bullion's 20% fall this year.

While overall volumes remain well below this year's peak, they are on track for a very robust year that will be close to or surpass levels seen in 2011.

Gold has fallen out of favour with speculators and some investors on expectations that the Federal Reserve will soon start scaling back its money printing programme. However, data regarding physical demand from Asia and mints around the world, shows that store of wealth demand remains very robust and physical buyers are using price weakness to keep accumulating bullion.

Australia's Perth Mint gold sales – including the iconic Australian kangaroo coin series – up to October 25 reached 75,040 troy ounces, according to preliminary numbers obtained by CNBC.

They are on track for a near 10% month on month gain from 68,488 ounces in September.
Perth Mint gold sales surged to a record in April this year after the peculiar ‘flash crash’ that saw gold plummet in minutes due to a massive bout of concentrated selling on the COMEX. April sales surged to over 111,505 ounces which was more than double the sales in March.

Smart money accumulated on the dip, again.

Meanwhile, sales of American Eagle gold coins more than tripled on month in October to 46,500 ounces. While they remain well off the 209,500 ounce high recorded in April, according to daily updated numbers obtained from the U.S. Mint's website, they are also on track for another good year.

April represented a banner month for sales in both the Perth Mint and the U.S. Mint after buyers jumped at the opportunity to accumulate gold coins, following gold's biggest ever one day loss on April 15, when it tumbled $125. The concentrated selling on the COMEX precipitated the month's sharpest decline since December 2011 and led to further allegations of manipulation of gold prices by Wall Street banks.

Physical demand from store of wealth buyers in Asia and internationally who continue to ‘stack’ or gradually accumulate physical coins and bars is supporting gold  and silver at these levels and should contribute to higher prices in the coming months.

Gold is down 20.2% year to date but has advanced 14% since reaching a 34 month low in June as lower prices led to increased demand for gold jewelry, bars and coins, particularly in Asia.


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Fri, 11/01/2013 - 03:30 | 4111058 boeing747
boeing747's picture

If you really like your golds, you can keept it, period

My golds is for the worst case scerenio.

 

Fri, 11/01/2013 - 05:53 | 4111143 Tall Tom
Tall Tom's picture

Thanks for your permission...as if I needed it...somehow?

 

Well...Okay.

 

But my Gold is for the best case scenario...my survival. If I am dead then it will not be any good, will it?

 

Hmmmm...You cannot take it with you. Leaving it all to the Government is not all that good either.

 

But on the other hand...maybe you are right...Maybe living through it, and having the means to do so, will be the worst case scenario. It will be a lot of torment, nightmarish and painful...horrific actually.

 

Ah..That is why I stocked up on Insulin. Insulin Overdose. (I am not diabetic.) Yeah...I have got that covered.

 

I am really glad that I brought no offspring into this World of Hurt.

Thu, 10/31/2013 - 21:37 | 4110437 rationaldemocracy
rationaldemocracy's picture

I never understood why old people hoard gold. It is probably a symptom of old age dementia.

 

Fri, 11/01/2013 - 05:09 | 4111119 fijisailor
fijisailor's picture

Those old people saved their whole life for retirement and they want to make sure they get that retirement plus some for the grandkids. Your lack of understanding probably comes from the lack of any reasonable plan for wealth preservation or else you're just plain penniless.

Fri, 11/01/2013 - 05:42 | 4111136 Tall Tom
Tall Tom's picture

Have you ever read any of his other posts? Notice the insult. There is no substance. He is a troll.

 

Don't feed the trolls.

Thu, 10/31/2013 - 23:07 | 4110698 Rock On Roger
Rock On Roger's picture

They're stacking for the grandkids benefit, because the grandkids parents were silly and put their money into electrons called bitcoin.

 

Stack On

Thu, 10/31/2013 - 18:54 | 4109988 deerhunter
deerhunter's picture

Zero Point,, you're a bigger man than I am if you would hit Hillary.  If that isn't a sure cure for a hard on I don't know what is.  You must have stones of titanium.  Heck,, we should vote for you for president.  

Thu, 10/31/2013 - 18:30 | 4109916 Notarocketscientist
Notarocketscientist's picture

Gold is not an investment - it is an insurance policy against the collapse of stocks, bonds, property and particularly fiat currency.

Thu, 10/31/2013 - 17:07 | 4109718 The Wisp
The Wisp's picture

I aint selling till an Oz gets you a BJ from Hillary with pictures to prove it

Thu, 10/31/2013 - 17:42 | 4109798 RafterManFMJ
RafterManFMJ's picture

I'd pay an ounce not to see that. What's wrong with you?

Thu, 10/31/2013 - 18:27 | 4109901 Zero Point
Zero Point's picture

I'd hit it.

There are few problems in life that can't be solved by lowering ones standards.

Besides, I reckon she'd be a freak.

Thu, 10/31/2013 - 22:44 | 4110635 The Wisp
The Wisp's picture

It would be worth 2 ounces, just to show the pics to Bill.. he sure wasn't getting it from Hillary.. :)

 wonder if she can take her teeth out  :(

Thu, 10/31/2013 - 16:51 | 4109676 Nassim
Nassim's picture

Dubai was always the place through which smuggling to India went. Around 40 years ago, it was big business. They had high speed dhows with powerful engines to avoid the Indian navy - the coastguards were paid off. I guess they are back in business.

Thu, 10/31/2013 - 14:21 | 4109201 lasvegaspersona
lasvegaspersona's picture

Buying a few ounces of physical moves the needle a tiny bit compared to selling, oh say...200 tons. The fact that the 200 tons is paper does not matter one bit in determining the price of 'gold'.

Until the derivatives market ends it is silly beyond comprehension to consider the impact of physical sales.

This should be obvious coming from a gold site but the error is repeated on a daily basis. I suspect it is meant to pump sales of physical (which I would encourage) but, not to inform the reader of the real action and price drivers, is lacking.

Fri, 11/01/2013 - 05:35 | 4111133 Tall Tom
Tall Tom's picture

I do not buy Physical Gold to manipulate the price. Nobody here does. We are not that damned arrogant to believe otherwise.

 

In fact I believe that a DEFAULT of CME Group on the Interest Rate Swaps that CME Group holds on thier books IMPLODES....well before they ever default on Deliverable Gold.

 

That is what will take out the COMEX. Jeffery Christian deserves that. So I am looking forward to the Derivatives Bubble's rapid deflation. I am praying for that day when it all crashes down on his head as he is most deserving. But...so are most Socialists deserving of that day.

 

And since the vast majority of people in the USA are Socialist, including most whom post here, I will be laughing on the day that it melts down. I will be celebrating the Collapse as the Mossad dancing on the top of their van celebrated the collapse of the Twin Towers. (Yes. It all ties directly back to the 11th of September, 2001.)

 

At that point if you do not have Gold you will not be able to acquire it...AT ANY PRICE.

 

But we know that. You know it. I know it. The rest of us know it.

 

(BTW..This is NOT a Gold Website but a Financial, Economic, and Political News and Opinion Website. Gold plays a minor role in the wide variety of topics that are addressed here. Go to the Kitco Forums if you are looking to talk about Gold and PMs. They are really cool over there. But the language is toned down quite a bit and it is not Fight Club.)

Thu, 10/31/2013 - 15:06 | 4109334 metaforge
metaforge's picture

Most of us are already aware of the real action & price drivers, so it probably does not bear repeating in each & every article, especially not one that is clearly not "Intro To Gold 101".

Thu, 10/31/2013 - 13:40 | 4109076 Lord Koos
Lord Koos's picture

This just in: Gold is in a bear market.

Thu, 10/31/2013 - 12:43 | 4108890 ItsDanger
ItsDanger's picture

"Gold has fallen out of favour with speculators and some investors on expectations that the Federal Reserve will soon start scaling back its money printing programme."  Funny, it will have the opposite impact.

Thu, 10/31/2013 - 12:10 | 4108777 Sonic the porcupine
Sonic the porcupine's picture

"Sales of gold coins and bars recovered in October, figures from two of the world’s leading mints show, suggesting physical buyers remain robust despite bullion's 20% fall this year."

Imagine if someone wrote: "Sales of automobiles suggest buyers remain robust despite a 20% drop in car prices."

Guess what, people buy more of something when it costs less. Assuming incomes are static, how much gold would be bought if it cost $1 million per ounce? I guess it's the ass-backward investing methodology, that you only buy something when it gets more expensive. Buy high, sell higher?

Thu, 10/31/2013 - 12:22 | 4108822 donsluck
donsluck's picture

This is true except for stocks, where buying increases as the price increases.

Thu, 10/31/2013 - 13:19 | 4109001 SRSrocco
SRSrocco's picture

IMPORTANT GOLD & SILVER EAGLE CHARTS

I put together some interesting charts on Gold & Silver Eagle sales.  There is one that shows the historic ratio of Gold & Silver Eagle sales that reveals an interesting trend.

 

Thu, 10/31/2013 - 15:20 | 4109376 metaforge
metaforge's picture

Nice charts.  It would be interesting to see if gold & silver Maple sales show similar trends.

Thu, 10/31/2013 - 12:08 | 4108771 MFLTucson
MFLTucson's picture

Gold is where to be in every country except the most indebted country on the planet.  This is what a media machine of liars has done to the poorly informed.  

Thu, 10/31/2013 - 12:03 | 4108756 blabam
blabam's picture

Bearish. 

Thu, 10/31/2013 - 11:47 | 4108701 Dr. Gonzo
Dr. Gonzo's picture

No government on Earth has to back their clownbuck in gold now thanks to the USSA default in 1971 so I guess that leaves a lot of gold that can be gamed before they run out again and the metals exchanges take a turn defaulting... could take years for this to happen I supose If there is 8 to 9  trillion $ of gold above ground.  No way to know really. I think I'm going to by 3 oz today though.

Thu, 10/31/2013 - 12:20 | 4108814 RaceToTheBottom
RaceToTheBottom's picture

"...No government on Earth has to back their clownbuck in gold now thanks to the USSA default in 1971 ..."

 

China is buying gold to get legitimacy for their currency.  They want to be in the basket called SDR to replace the dollar

Thu, 10/31/2013 - 11:40 | 4108680 tecno242
tecno242's picture

The irony of gold is that it will be badly hurt as the power of the FED injected drugs begins to wane.

There's only 2 things that will push gold dramatically higher at this point;

1) the economy actually really does improve for real and wages and inflation start rising suddenly   (not going to happen)

2) the FED actually INCREASES QE 

Any other action or result will see gold falling or stable at best

Thu, 10/31/2013 - 18:28 | 4109904 Notarocketscientist
Notarocketscientist's picture

I will bet you 100 gold maple leafs that the Fed increases QE within the next 12 months.  You pay me in same.

Thu, 10/31/2013 - 12:30 | 4108851 FieldingMellish
FieldingMellish's picture

When confidence in the dollar evaporates, things will get ugly everywhere fast. Could be tomorrow, could be next year, could be longer. It will happen.

Thu, 10/31/2013 - 11:51 | 4108717 Conax
Conax's picture

 

3)  When 2% of all the investment confetti sloshing around goes after some phyzz

4) When the good delivery bars run out.

Thu, 10/31/2013 - 11:56 | 4108711 Quinvarius
Quinvarius's picture

Paper probably.  But I think the physical drain will continue.  I really don't know how paper will react to very low or no gold supplies.  I guess it depends who owes and who is owed.  All things remaining as they are, I suspect gold will dribble up to the 1660 area within a few months.  I don't consider that to be a big move.  I am watching the miner charts for confirmation of a double bottom in that sector.  The story goes that they will start moving before gold does.  I don;t know if that is true or not, but it certainly was on the way down. 

Thu, 10/31/2013 - 12:07 | 4108767 tecno242
tecno242's picture

The paper vs. physical myth will remain a myth until you cannot buy physical at paper spot.  Which is still quite easy with the normal premium for high quality investment grade gold.

Gold will not see any benefit unless inflation actually shows up.  Which I will maintain that it won't.  Not unless the economy actually starts improving.. which it will not.

Thu, 10/31/2013 - 12:04 | 4108761 SilverIsKing
SilverIsKing's picture

When the move finally happens for real, it will be breathtaking.  This will require them losing total control which will be marked by strong rumors of tapering, perhaps even the FED heads making statements to that effect, while the gold and silver prices ignore the comments.

They will do everything in their power to stop the price move so volativilty will be off the charts but the prices will move quickly and in big increments.

 

Thu, 10/31/2013 - 12:56 | 4108929 lunaticfringe
lunaticfringe's picture

It will only happen once. And the rest of the world will not be a pleasant place to live.

Thu, 10/31/2013 - 11:39 | 4108676 Conax
Conax's picture

"Speculators may be taking profits from a recent run up in prices."

nigga please.

Thu, 10/31/2013 - 11:39 | 4108672 Billy Sol Estes
Billy Sol Estes's picture

Buy physical, sit on it. Don't sell it. Ever.

Thu, 10/31/2013 - 14:22 | 4109204 Stuck on Zero
Stuck on Zero's picture

I slightly disagree.  Buy physical, bury it.  Sell half of it when one ounce will get you a Gallardo.

 

Thu, 10/31/2013 - 15:25 | 4109399 metaforge
metaforge's picture

Good point.  However if we're at the point where 1oz gets you a Gallardo, it might be better spent in processed base metals like CuPb.  ;)

Thu, 10/31/2013 - 11:22 | 4108625 SilverIsKing
SilverIsKing's picture

When does the physical gold run out?  That's the only thing that will end this charade.

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