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Gold Buying On Shanghai Gold Exchange Surges Again On Sub $1,200 Gold

GoldCore's picture


Today’s AM fix was USD 1,195.00, EUR 875.33 and GBP 731.69 per ounce.
Yesterday’s AM fix was USD 1,205.25, EUR 881.16 and GBP 736.35 per ounce.

Gold dropped $27 or 2.22% yesterday, closing at $1,191.50/oz. Silver slid $0.58 or 2.93% closing at $19.21/oz. Platinum dropped $14.76, or 1.1%, to $1,316.24/oz and palladium edged down $2.53 or 0.4%, to $692.97/oz.

Gold in U.S. Dollars, 1 Year - (Bloomberg)

Gold fell below support at $1,200/oz yesterday and is vulnerable to a further test of the June 28th low of $1,180.50/oz. A close below $1,180.50/oz could lead to prices falling to $1,100/oz and the next level of support is $1,000/oz.

Gold rallied from its worst closing price in almost three years after the Fed's decision to marginally reduce its debt monetisation programme. Gold is on track to suffer its first decline since 2000 or first decline in 13 years.

The taper is not as bearish as some suggest as debt monetisation will continue at the whopping $900 billion per annum - down from over $1 trillion per annum and the Fed will maintain near zero percent interest rates for the foreseeable future.

Chinese demand may once again stem the decline in gold prices. Chinese buyers eagerly scooped up gold at bargain prices overnight after the 4% price fall this week and 29% fall this year.

Gold volumes for the benchmark cash contract on the Shanghai Gold Exchange (SGE), China’s biggest spot bullion market, climbed to a 10 week high as lower prices led to increased buying.

The volume for bullion of 99.99% purity climbed to 19,775 kilograms yesterday, the biggest since October 8, from 13,673 kilograms the previous day, according to exchange data compiled by Bloomberg. Prices fell on the SGE overnight for a third day, losing 2.1% to 235.85 yuan a gram ($1,208 an ounce), the lowest since February 2010.

Gold in Renminbi - Shanghai Gold Exchange - 5 Years

The surge underscores robust demand in the nation set to overtake India as the largest buyer of gold. When gold entered a bear market in April, demand for jewelry and gold bars surged in Asia, even as more speculative investors cut holdings in ETF products at a record pace.
China’s shipments from Hong Kong rose to the second highest on record in October, with the amount in the first 10 months in 2013 alone more than doubling to 955.9 tons. This does not include shipments directly into China that do not go through Hong Kong.

Chinese demand for gold has surged again this year and the World Gold Council’s estimate of demand reaching 1,000 metric tons, is increasingly being seen as very conservative. Chinese demand may be much, much higher with some analysts saying that demand may be close to the 2,000 tonne mark.

Gold Fixes/Rates/Vols - (Bloomberg)

The Shanghai Gold Exchange (SGE), now the world’s biggest exchange for physical gold, plans to offer storage accounts to investors in China and internationally. This could lead to even greater flows of gold into China in 2015.

The SGE plans to  launch an international board in the pilot free trade zone to attract offshore yuan capital to invest in the Chinese mainland’s gold market, a senior official said earlier this month.

“We want to tap the opportunity from Shanghai’s pilot free trade zone and launch an international board to attract offshore yuan to invest in the mainland,” Xu Luode, chairman of the bourse, said at a precious metals forum in Shanghai December 6th.

The Shanghai exchange will establish a system that publishes daily rates at which selected market participants are willing to lend gold in the mainland interbank market, which is similar to the Gold Forward Offered Rates by the London Bullion Market Association, according to Xu.

Gold’s sell off this week was again primarily due to paper gold selling by traders and speculators on the COMEX as there was little selling of coins and bars by bullion buyers. Indeed, we have again seen more buyers than sellers this week and there has been a slight increase in demand.

Bullion premiums in western markets are flat again this week. Gold bars  (1 oz) are trading at $1,249.89/oz or premiums of between 3.75% and 4.5%, and larger gold bars (1 kilo)  are trading at $39,800/oz or premiums of between 3% and 3.5%.

Arguably, the Fed’s small taper and statement is bullish for gold as the Fed confirmed that ultra loose monetary policies and the unprecedented zero percent interest policies are set to continue. Also, the  Federal Reserve’s balance sheet continues to deteriorate which should support gold in 2014.

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Fri, 12/20/2013 - 15:41 | Link to Comment surfersd
surfersd's picture

As a long time commodity trader and a gold believer, the monthly chart looks horrible. Markets are markets, sometimes one can't let there opinion get in the way of making money. I would expect to see a smack down to the 1050-80 level where this breakout occurred long ago.

The market will go to the point which causes the most pain. Until we see the ads to buy gold aren't on tv and radio all the time, the pressure lower is still there.

I wish is wasn't the case.



Fri, 12/20/2013 - 15:45 | Link to Comment FieldingMellish
FieldingMellish's picture

Be careful. Such talk is the voice of "Fed MOPE Media Manipulators". Anything that doesn't say "up" is trollish on ZeroHedge.

Fri, 12/20/2013 - 16:33 | Link to Comment Son of Captain Nemo
Son of Captain Nemo's picture

Quick question for you 'FM'

Which Agency or bank are you and fonestar working for?...

That includes the one(s) in Tel Aviv as well of course.

Fri, 12/20/2013 - 17:00 | Link to Comment FieldingMellish
FieldingMellish's picture

Right. Because anyone with an opinion contrary to yours or the groupthink on ZH has to be a shill for some PTB... Jewish or otherwise... conspiracy theory burnout?

Fri, 12/20/2013 - 17:10 | Link to Comment angel_of_joy
angel_of_joy's picture

No. Most of the time though, they have a hidden agenda

Fri, 12/20/2013 - 16:07 | Link to Comment angel_of_joy
angel_of_joy's picture

Say it ain't so !

Fri, 12/20/2013 - 14:31 | Link to Comment Racer
Racer's picture

"Gold’s sell off this week was again primarily due to paper gold selling by traders and speculators on the COMEX as there was little selling of coins and bars by bullion buyers. Indeed, we have again seen more buyers than sellers this week and there has been a slight increase in demand."


Smell manipulation in the air?!

Fri, 12/20/2013 - 14:04 | Link to Comment FieldingMellish
FieldingMellish's picture

One good smack in the small hours and gold will finish the year sub $1100. Loads more "buying opportunities" coming up for the next decade. Double digit gold coming when the Chinese and Indians realize they have bought into a scam.

Fri, 12/20/2013 - 14:37 | Link to Comment superflex
superflex's picture


Fri, 12/20/2013 - 14:47 | Link to Comment FieldingMellish
FieldingMellish's picture

Loads of people still in the denial phase I see. Plenty more downside either in a sudden drop or more likely a protracted and painful decades long bear punctuate with small "hope" rallies to get people to think "this is it!". That way the suckers continue to hold all the way down finally giving up when bankruptcy forces them. In the meantime, the rest of the world gets on with its life as the stock market continues to climb.

Fri, 12/20/2013 - 15:48 | Link to Comment ltsgt1
ltsgt1's picture

Well, I guess I will be one of those suckers then. Not only will I hold all the way down, I will likely add more on the descend.

As far as bankruptcy, I will not go bankrupt any time soon unless rental real estates market in NYC tank. Come to think of it, I still will not go bankrupt if that happened because I have gold, lol.

Btw, why are you so hostile toward gold ownership. When gold was at $1900 as the stock market was in the sink, no goldbugs made fun of or wished bankruptcy upon the owners of paper instrucments.

Fri, 12/20/2013 - 15:22 | Link to Comment jomama
jomama's picture

if you don't mind me asking, why the fuck do you care?

Fri, 12/20/2013 - 15:15 | Link to Comment cynicalskeptic
cynicalskeptic's picture

Nice to see the Fed's MOPE media manipulation program is in full gear - employing those who otherwise would be playing Grand Theft Auto in their parents basement all day.

If only the 'management of perspective' was backed by some real action in improving employment, stemming job offshoring and increasing real income - instead of focusing on media manipulation, manipulating statistics and otherwise playing with smoke and mirrors.

All I know for certain is that in my 50 year lifetime I've seen rampant inflation that is only getting worse, stagnant (at best) and declining wages for 99.9% of the population and a nation that all too closely resembles Rome in its final collapse stage (albeit in an accelerated timeframe).  Just glad I'm not around for much longer but I pity my children who are inheriting one hell of a shitstorm.

Having worked for the Fed and on Wall Street some time ago (but still in touch with many in finance) I DO know that NOBODY actually believes the BS being fed to the public.  The general feeling is that things are far worse than they were 5 years ago, that the government made things worse by NOT prosecuting anyone for very real crimes and the whole mess is being held to gether with spit and gum.  Expect WWIII to distract he masses from the mess their leaders have gotten them into - but without the economic benefit.  It won't last long - the US can't FORCE the world to prop up the $US at the point of a gun though odds are they WILL try the same tactics to keep the US population from rising up with torches and pitchforks.

BTW - Zimbabwe had the best performing stock market in the world for a while - even though people were wiping their asses with $Zim billion banknotes.  And please don;t try the 'deflation' argument... we're seeing deflation in the prices of all the things we DON'T need - and all too real inflation in the prices of things we DO need - like FOOD.   Been in your local supermarket lately?   Prices are up and stock sizes are smaller.  Hell sugar is in 4 lb bags now instead of 5 and my soap has a big bite out of the bar right out of the wrapper. 

Fri, 12/20/2013 - 15:32 | Link to Comment FieldingMellish
FieldingMellish's picture

Confirmation bias, thy name is ZeroHedge. Yeah, everyone with a dissenting opinion is "Fed MOPE media manipulation". Did Sinclair give you that one?


If I had said 2 years ago that gold was about to enter a huge bear market and fall 40% I probably would have been called a troll as well and yet, here we are.

Fri, 12/20/2013 - 16:02 | Link to Comment angel_of_joy
angel_of_joy's picture

We are small people. We don't matter.

Why are you wasting your time around here, again ?

You're probably paid to troll or are stupid enough to like getting your ass red arrowed to death. Either way, you're missing big in the market right now...

Fri, 12/20/2013 - 15:53 | Link to Comment ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

Jim Rogers and Marc Faber would have said you were wrong because a %50 correction was easily forseeable.

Fri, 12/20/2013 - 16:02 | Link to Comment FieldingMellish
FieldingMellish's picture

Right. Which is why everyone foresaw it at just the right time (warning all and sundry) and pulled out. Jim Rogers, Marc Faber, Goerge Soros, Jim Sinclair... gold shills and paper shills, no difference.

Fri, 12/20/2013 - 14:05 | Link to Comment steveo77
steveo77's picture
A few readers have sent me their letters that they submitted as testimony to the NRC, and the DEADLINE IT TODAY. Read their letters and/or cut and paste ideas into your own letter. Submitted the letter to NRC is EASY and quick.

Today is the Deadline....give your opinion to the NRC

Here are the sample letters

And here is my letter, at the bottom AND THE LINK for you to send your letter. Its easy, take 10 minutes. Give a Christmas present to the planet by doing so. Give the finger to the pro-nuke idiots that be.

Fri, 12/20/2013 - 13:57 | Link to Comment Sufiy
Sufiy's picture

Jesse: Record COMEX Gold Claims Per Deliverable Ounce at 79 to 1 

  Jesse reports that the Game Of Musial Chairs in the Western Fractional Gold Reserve System is getting into the new stage with the record level of leverage. Now report from Bloomberg can be put into another perspective. Bloomberg: London Gold Vaults Are Virtually Empty GLD, MUX, TNR.v, GDX

Bloomberg quite suddenly provides some really interesting information about the state of the gold market and ongoing manipulations around it these days. Could the reports about JPMorgan being Net Long Gold now be correct in the end?

Fri, 12/20/2013 - 15:49 | Link to Comment ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

Just keeps getting wilder don't it?  Harvey organ shows there is now 15.022 tons of Registered gold in comex with over 20 tons still standing for delivery in December.  I know there will be no default since everyone has agreed in advance to accept cash, but either a price beatdown for the ages is coming in the next week or so, or we are a month or two away from the price of gold being set by a market where you can never get gold.

As much as I hate to run about quoting KWN, Mr Maquire says the head of the LBMA (along with other bullion banks) is telling miners this is their last chance to sell forward their gold production before gold goes to $400 in 2014


Fuck me... Just.....  Fuck me.

Fri, 12/20/2013 - 16:01 | Link to Comment Seeking Aphids
Seeking Aphids's picture

The London Fix and COMEX are increasingly becoming the 'barbaric relic'....anachronisms that have had their day and don't realise that the game is over....the power has moved East and once they get things up and running in Shanghai they will let the world know more fooling around with the pog and using paper to leverage 70:1 or whatever it is up to by year should be quite interesting......

Fri, 12/20/2013 - 13:59 | Link to Comment fooshorter
fooshorter's picture

nice article sufiy, but please upgrade to a wordpress template at least.

Fri, 12/20/2013 - 13:56 | Link to Comment Sonic the porcupine
Sonic the porcupine's picture

Those Chinese and Indians are so backwards with their barberous love of a yellow metal.

Fri, 12/20/2013 - 15:46 | Link to Comment fallout11
fallout11's picture

They know a bargain when they see it. Gold on, dollars off.

Fri, 12/20/2013 - 15:25 | Link to Comment cynicalskeptic
cynicalskeptic's picture

Just remember - the barbarians were the ones to sack Rome (repeatedly) after it overextended its Empire, started losing wars in far flung places, debased its coinage and finally realized it couldn't keep its population distracted with bread and circuses.

Not sure how much is left to loot in the US though... we've given our productive capacity away to China already, probably sold them all our gold and silver on the cheap and seem to be letting them buy up whatever they want with paper dollars that are losing value (converting paper funds into hard assets).......  The US may think they can win a shooting war with the rest of the world but truth is we've already lost - and accelerated China's ascendency in the process of trying to delay our own fall.

Fri, 12/20/2013 - 16:00 | Link to Comment ltsgt1
ltsgt1's picture

Bread; ObamaCare, extended unemployment, recorded numbers of food stamps recipients and disability recipients, QE after QE since 2009.

Circus; US stock market, housing market and COMEX.

Barbarians; Russia and China are flexing their muscles. We are losing control in the Mideast. Our allies do not trust us and I don't blame them one bit. The barbarians are already at the gate.

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