Asians Drive Gold Demand To 30 Year High

Tyler Durden's picture

From GoldCore

Asians Drive Gold Demand To 30 Year High

Today’s AM fix was USD 1,417.25, EUR 1,091.70 and GBP 931.05 per ounce. 
Yesterday’s AM fix was USD 1,425.00, EUR 1,092.54 and GBP 935.04 per ounce.

 Cross Currency Table – (Bloomberg)

Gold climbed $24.50 or 1.75% yesterday to $1,425.40/oz and silver finished +0.82%.

Asia is seeing a new gold rush.

Demand for gold bars, coins and jewellery has soared as bargain hunters try to capitalize on the dip in prices.

In Hong Kong and Beijing customers lined up outside banks and jewellery shops to make purchases and in some instances there was not enough physical metal to meet the demand.

The Shanghai Gold Exchange’s cash contract hit a new record high yesterday (43 metric tonnes, up from 30.4 on April 19th) while gold coin sales at the U.S. Mint have nearly tripled in April against last month’s figures. 

Joni Teves of UBS research said, “Physical markets have responded to the much cheaper gold price levels,” and “our physical flows to Asia have been particularly elevated this week.”

Asian investors demand for the physical yellow metal has supported the gold price, rallying it up 8.1% from last week’s low.


Gold in USD, 1 Year – (Bloomberg)

The Financial Times interviewed Haywood Cheung, president of the Hong Kong Gold & Silver Exchange Society, who noted, “the exchange had effectively run out of most of its holdings as members looked to meet a shortfall in supply amid rampant retail demand for gold, and in terms of volume, I haven’t seen this gold rush for over 20 years,” he said. “Older members who have been in the business for 50 years haven’t seen such a thing.”

Asian traders confirmed that investors are paying double the premiums to acquire the physical asset.

Chow Tai Fook, the Hong Kong based world’s number one jeweller by market capitalisation, noted that in some shops they had sold out of gold bars. 


Gold in Japanese Yen, 5 Year – (Bloomberg)

China is the 2nd largest consumer of gold in the world, but may outpace India this year.

Japanese investors and store of wealth buyers are seeking refuge in gold bullion due to currency devaluation and inflation concerns. They are set to become net buyers of gold for the first time in eight years as the yen’s decline and looming inflation drive them to seek refuge in bullion, according to Standard Bank Plc.

NEWS

Asian bargain hunters pile into gold – The Financial Times

Gold Near One-Week High as Investors Weigh Physical, ETP Demand - Bloomberg

Gold falls from 1-week high; ETFs slip - Reuters

Gold gains for third session, reclaims $1,400 – Market Watch

COMMENTARY

Bill Fleckenstein: Hold Tight To Your Gold – Zero Hedge

Gold Crash? Hmmm – Mauldin Economics

Cramer: Gold Bulls May Have the Last Laugh – Yahoo Finance

When Roosevelt Ditched the Gold Standard - Bloomberg

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Precious's picture

If the recent gold drop was manipulated, what explains the other precious metals dropping?

A is A's picture

contagion... cough cough

TwoShortPlanks's picture

Awww, frankrew Groldman Srachs!

rajat_bhatia's picture

All jewelry shops empty in my area. No more gold left. Fuck it! I'll be taking delivery of my long contracts from MCX India

MillionDollarBonus_'s picture

If you think that there's an evil cartel out to get your 'stack', I believe you urgently need to see a therapist. Goldbugz suffer from a mental disorder wherein they feel 'entitled' to monthly investment gains. Whilst other investors have to put time and thought into constructing a portfolio of bonds and stocks, goldbugz expect guaranteed returns simply for 'stacking' these shiny bars. Goldbug-disorder truly is one of the sickest and most vulgar forms of narcissism in the world today.

rajat_bhatia's picture

LOL, so true MDB, as the gold bug says.."my gold bar's still worth $2000, fuck the market determined price"

But, you gotta admit, gold does look tempting at this price :-) Hence i'm buying a little. 

Pinto Currency's picture

 

Another headline could be " Gold Market Fraudulent Structure Threatened by Physical Demand From Everyone Who Understands Cyprus and the G20's Plan for 'Bail In' Asset Theft From Savers ".

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/4/23_Si...

 

It's not just the Asians who are buying and trying to get delivery.

Oracle of Kypseli's picture

You need to post some pictures showing the lines, so that credibility is indisputable.

Thanks

Pinto Currency's picture

 

Not many pictures on the web of investors being refused allocated gold by Swiss bankers or of LBMA cash settlement in lieu of physical gold.

Check out this article - nobody needs to worry, there are lots of life boats.  Now don't anybody get in any life boats.:

http://silverdoctors.com/boes-carneys-dieselboom-policy-makers-working-d...

This appears to be the central issue right now and why the gold market is so volatile.  Asian buying is part of the picture, however there appears to be a much larger run underway.

Pinto Currency's picture

http://ca.finance.yahoo.com/news/carney-says-canadian-deposits-safe-unde...

 

Carney says Canadian deposits safe under bail-in, but offers no guarantee

OTTAWA - Mark Carney says policy-makers are working diligently to devise an international "bail-in" regime to prevent big bank failures, but he offered no guarantee that individual deposits would be protected.

The Canadian central banker, who is a few months away from heading the Bank of England, says banks must have a set of buffers in place to draw on in an emergency.

Speaking during a televised interview in Washington, Carney appeared to disagree with the approach taken in Cyprus last month that involved taxing deposits, but would not state his personal position because he said it might be misinterpreted.

He notes that the Canadian government has pledged not to dip into individual deposits.

Carney did not answer whether there should be a total hands-off treatment to non-secured accounts as well, which in Canada would mean deposits over $100,000.

Still, Carney says Canadians should not lose any sleep over the safety of their deposits...

mick_richfield's picture

That would be something -- a market determined price.

I would love to see that, for gold, and silver, and equities, and the insecurities that banks hold on their books and value as they please.

Hey, I have an idea -- maybe we should have market-determined prices for everything!

You can say that I'm a dreamer, but I'm not the only one.

DebtSlaveZombie's picture

You're right.  Lets have a market detemined price but that market can't have ETF involvement.  Meaning, lets find the true price of gold and silver without the demand generated from the paper side.  Let's really see how much the price of gold and silver is due to investors having exposure to PM through other means (ETF's/paper market) rather than taking actual physical delivery.  I would love to know how many people invest in PM simply because they can buy an ETF and not take physical ownership.  Lets find out. 

Kirk2NCC1701's picture

Ahem... This is exactly what's happening.

If you wanted to get the ETFs out of the price equation, you either drive it to 'zero', or (more likely) near the value of the marginal cost of production. In the case of gold, that's ~ $1250.

At/near that point the market forces of supply & demand will manifest the TRUE market price of PM billion.

So, instead of squawking, true gold bugs should be rejoicing that the free market of bullion is setting the wholesale and retail price.
The 'bad' news is that this price is NOwhere near the fiat value the gold bugs want it to be.

I've already come to terms with this and am hedging and acting accordingly.

oddjob's picture

Like the troll says, I hate gold,its going down, but just in case it does go up, I have some.

ParkAveFlasher's picture

It sits in a box until something f'd happens, and they need it.  Now I know why they call it a commodity.

Kirk2NCC1701's picture

You must mean The Squid. Goldman Sex is just sucking up to the Chinese (at expense of Americans) to drive down gold prices.

Their top staff desperately wants to get into Beijing's inner circle. (For the more literary types, notice the imagery used). ;-),

If in doubt, remember that it's always about them.

Imminent Crucible's picture

Yeah, anyone can see that gold is a freely traded commodity without any interventions. Just like Treasury bonds. The Two Year Note yields 22 basis points because EVERYBODY IN THE WORLD wants Return-Free Risk. Wait until the 2YR yield goes back to over 500 basis points, where it stood in 2007. The Fed is going to take SUCH a drubbing on their burgeoning portfolio of Treasury buttwipes.

Oh, BTW; for Million Dollar Blowhard--you need to send Andy Xie to the therapist because, although he's forgotten more about gold and his native Asia than you'll ever know, he says "the recent price gyration is manufactured to benefit big speculators...Physical gold demand is from emerging economies, but the financial market resides in New York and London; it is a heavily manipulated market".

http://www.marketwatch.com/story/after-the-flash-crash-in-gold-andy-xie-...

draug's picture

Aaand here comes the sucker's rally. All I see is a dead cat. Even gold bounces if you drop it from a 10 story building.

Imminent Crucible's picture

Even draug tastes good if it's stir-fried by a Szechuan chef.  Arf, arf.

TeamDepends's picture

Nope. The suckers rally is happening over at the DOW.

goldfreak's picture

one troll agreeing with another troll HA HA HA

Confundido's picture

But, MDBonus, isn't there billions of fiat paper being printed on a monthly basis too? Why would gold not appreciate against that too...Or better put...why are only stocks and bonds the ones with the right to appreciate against that too? Particularly when stocks and bonds require healthy and sound money. Gold does not require healthy and sound money. 

Confundido's picture

Having said that, I am not buying. The cartel is alive and well, as the 8:20am movement shows today. Only when miners have a solid turnaround, will I feel comfortable to add. Not until then. And miners will now be forced to hedge...

fonzannoon's picture

why not dump a billion ounces of imaginary on the market in one trade this am and knock the price down to $500/oz?

FL_Conservative's picture

And ask the Fed how to be successful in never delivering.

Kirk2NCC1701's picture

No 'need' to do that. Read my comment above.

espirit's picture

MDB, you are truly a "Trolls" troll.  If I could give more than a +1 for effort, I would.

It's either that or, you are desperately seeking attention and need serious therapy.

Divine Wind's picture

 

 

You arrogant snob.

Most investors in physical gold do so only in times of screwy monetary and fiscal policy.

The fact that we complain about the manipulation slamming the FRN-denominated value of the metal is very different from what you state. From another angle, our complaints also originate from the broad impact of historic levels of money printing. It is not just the impact on the price of metals. It is the impact on every other aspect of life as well.

If you are not feeling it, you are a liar.

Few expect "guaranteed returns simply for 'stacking' these shiny bars."

We do so as history has shown that ALL paper currency ultimately becomes worthless.

We Goldbugz strongly encourage you to keep stacking your FRNs and paper-denominated investments.

We will see who prevails.

 

 


Diet Coke and Floozies's picture

Don't worry about MDB... He is all in with the FB IPO...

"Get me in at ANY price!" - MBD = Greatest comment evar... LMAO

HeavyShadow's picture

Really? He said that. Sounds like one of them folks that has massive issues when trying to organise a shag in a brothel.

Kirk2NCC1701's picture

You're a washed up has-been, else you'd know that...

The Squid is shorting paper gold here (screwing many of its US clients), while buying up Bullion on the cheap from its China office.

Scotty, MDB to beam down!

MonsterBox's picture

paper & physical divergence....will "they" let it happen?

new game's picture

barter.

some dealers will drop out-no product to sell and overhead.

fuck them anyways as they are book selling gougers with overhead.

find an idiot willing to sell for less that value-2 were just born -hello-opportunity awaits...

BobPaulson's picture

The paper gold game hasn't lost out yet. Everybody jawbones about demand through the roof but the real proof is when you see a slope on the demand/price curve that can drive a wedge between the two prices. The minute there is any kind of carry trade to physical I suspect it's curtains but for all the talk of big demand, I don't see the A-bomb going off at the COMEX yet.

If I am not mistaken the last nuclear strike on the gold carry was by De Gaulle in the 70s. If a sovereign actually demands delivery instead of talking about it, it will heat up IMO. I'm guessing talking up repatriation is BS for now.

Let's say you are a country with some piece of paper saying your friends in the US are "holding" your gold for you. If you're small enough you ask for delivery and they publicly deliver to ease fears. If you are Germany, you don't want the answer to be "Sorry, can't deliver today, we will make good on our IOU in FRN's" because that is shooting yourself in the foot.

So the small holders can't do enough damage to force the facts of the shortage in the open and the big guys don't want to because they'll lose out. It can only happen with an avalanche of small guys then. So it will be slow. Every time the inventory gets low, I suspect they will short the price again, print some money and buy more from the skittish speculators. Hopefully the quick sellers will eventually be worked out and then it will get tight?

 

Its_the_economy_stupid's picture

Logical. Lucid. Passes the smell test. Let's see which sovereigns step up.

Ray1968's picture

Gold coins and bullets: the shelves are empty!! 

espirit's picture

Sort of like a defunct petrol station, where the posted price nowhere reflects the current price of the station across the street.

You can go there, but it still can't be had.

Imminent Crucible's picture

Is this how hyperinflation starts? In controlled and limited categories, and then spreading outwards?  The reason I ask is that I went back to the ammo section my last trip into Wal-Mart to see if anything was in stock. "Got any .380?" "No, sorry". "Got any .38 Special?" "Nope." "Any 9mm?" ...hesitation...."Uh, yeah, a few boxes of Winchester came in. I just put them on the shelf."

So I bought two 100-boxes @ $24 each. Went home and looked it up on ableammo.com.  The exact same Winchester 9mm 100 box was out of stock, but priced at $116 per box.

Last night I checked all the silver dealers I could think of for various rounds. One had a few old Engelhard Prospectors--for ELEVEN BUCKS over spot. The rest had a few large bars, hardly any rounds out there.

I wonder if this is the beginning.

GetZeeGold's picture

 

 

 ...what explains the other precious metals dropping?

 

In space no one can hear you scream....but we're not in space.

Sudden Debt's picture

If the price of gold drops in the COMEX fault and there's nobody to see the gold...

did the goldprice drop?....

Yamaha's picture

Read - Williams and Fleckenstein. That is all you need to know.

max2205's picture

slv... new lows this AM

augustusgloop's picture

that actually sounds better: 

Ag should be tanking on macro sink-hole, Au should be holding its own on the promise of bank deposit haircuts. 

That said, premiums on Silver Eagles look like they are not letting up.

Yamaha's picture

Cramer just throwing darts in all directions - what a joke!

espirit's picture

Cramer is a blind chimp.

Rory_Breaker's picture

Just like any portfolio manager

Kirk2NCC1701's picture

No, he's a dutiful foot-soldier. Doing what he is supposed to.

Hedge accordingly.

Papasmurf's picture

Turn Cramer off.  You'll hear something from him where you forget the information source.  That can lead to mistakes that cost you money.

LawsofPhysics's picture

Higher demand for physical, yet the "price" is at a two year low.  Yeah, that makes sense.  More war on the way.  Far too many paper promises and far too little real collateral.