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Gold Buying Surges In November - China Buys 21 Tonnes In November Alone

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Gold Buying Surges In November - China Buys 21 Tonnes In November Alone

Editors Note: Despite gold at near 6 year lows, global demand for physical bullion remains very high. This is clearly seen in the recent demand data from the U.S. Mint and other mints and demand data from GFMS and the World Gold Council which shows very robust demand from Germany, India and of course, China.

GoldCore: Total Sales of US Mint Gold Eagles and Buffalo Coins

There is also the very high official demand from central banks and, in particular, the Russian central bank and the People's Bank of China (PBOC). Today came news that China's gold reserves rose by another 21 tonnes in November, the biggest bout of gold buying since China began disclosing monthly data on China's gold reserves in June - see Gold News.

Last week data showed that sales of American Eagle gold coins at the U.S. Mint surged in November, with gold demand nearly tripling month-over-month as bullion prices fell to multi-year lows.

Despite these very high levels of demand, gold prices fell sharply in November - from $1,141/oz to $1,070/oz or 6.6%.

Gold prices continue to be determined by traders and speculators in the futures market as evidenced by the Commitment of Traders (COT) data, showing that hedge funds now have record short positions. This typically occurs close to market bottoms and - along with the supply demand fundamentals - would suggest gold is close to bottoming.

Futures participants are eagerly awaiting the Fed's interest rate decision next Wednesday, December 16th. Should the much heralded and anticipated 25 basis point rise materialise as is expected, then we expect gold could show further weakness.

Weakness into year end seems quite possible given the poor technical position, poor sentiment in western markets and momentum which can be a powerful thing. $1,000/oz gold seems increasingly likely and it appears to be gravitating to this big round number.

Chinese New Year looms and demand from China should provide support at these levels and should spur gains in January.

Dr Constantin Gurdgiev covered the surge in demand for gold coins from the U.S. Mint on his blog:

Following October fall-off, sales of U.S. Mint gold coins rose strongly in November to 135,000 oz by weight (+86.2% y/y) and 237,500 units (+95.5% y/y).

These figures include sales of both Eagles and Buffalo coins. Average weight of coin sold also rose strongly to 0.5684 oz compared to 0.4709 oz in October and close to 0.5967 oz/coin in November 2014.

As noted in my note covering October sales, October decline was a correction reflective of volatile demand and also significant uplift in sales in previous months.

As chart above shows, sales by weight are now well above period average and above peak period average. In 11 months of 2014, US Mint sold 679,500 oz of gold coins; over the same period of 2015 sales totalled 1,020,000 oz. 

November 2015 also marked 20th consecutive month of gold sales/price correlations (12mo running) being negative, suggesting strong and entrenched demand from buyers pursuing long hold strategy and taking advantage of improving cost of holding gold. 
 

Continue reading Dr Constantin Gurdgiev blog on U.S. Mint gold coin demand

DAILY PRICES
Today’s Gold Prices: USD 1071.75, EUR 988.43 and GBP 714.79 per ounce.
Yesterday’s Gold Prices: USD 1082.70, EUR 1001.80 and GBP 718.26 per ounce.
(LBMA AM)

GoldCore: Gold in USD - 10 Years

Gold in USD - 10 Years

Gold fell back yesterday after Friday’s gain, closing down $12.30 to $1072.90. Silver also fell by $0.27 to close at $14.28. Platinum lost $29 to closes at $849.

Read more on the GoldCore.com blog

IMPORTANT NEWS

China adds 21 tonnes to gold reserves in November on price slump – Reuters
Gold retains losses as dollar rallies on Fed rate hike view – Reuters
Gold Retreats as Traders Refocus on Rate Rise, Dollar Strength – Bloomberg
Gold ends lower, loses steam after big Friday rally – MarketWatch
Here’s a Hedge Fund Getting in Commodities, Rather Than Out – Bloomberg

IMPORTANT ANALYSIS

For all their big spending, central banks cannot control inflation – The Telegraph
Falling Oil + Rising Dollar = Crisis For A Whole Lot Of People – DollarCollapse.com
Bond Bust Will Be Biggest Crash in History-Mike Maloney – USAWatchdog,com
Here’s What Happens To Gold When Interest Rates Go Up – Casey Research
Germany gives Greece names of 10,000 citizens suspected of dodging taxes – The Guardian

Read more News & Commentary on GoldCore.com


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Tue, 12/08/2015 - 22:26 | 6897397 fowlerja
fowlerja's picture

Actually China is following a great policy...buy the fucking gold...btfg!

Tue, 12/08/2015 - 21:12 | 6897041 Grandad Grumps
Grandad Grumps's picture

The more gold China purchases, the longer the recession will last.

Tue, 12/08/2015 - 19:17 | 6896381 ramgold2206
ramgold2206's picture

Hi guys is really like your opinions on this Question; anyone on here who has acquired physical gold in the past couple of years; do you genuinely feel financially more secure with your stack or annoyed because bullion hasn't shot thru the roof yet?

email me on ramgold2206@gmail.com

www.tramramgold.com

Tue, 12/08/2015 - 18:42 | 6896224 JPMorgan
JPMorgan's picture

The lower the price goes the more physical they are going to continue to lose.  

There is only one way to cut global gold demand now... and that's with a revaluation much higher.

Central banks are only delaying what inevitably must happen in my opinion.   

 

Tue, 12/08/2015 - 21:14 | 6897055 Grandad Grumps
Grandad Grumps's picture

That is not the way it has historically gone in the banker managed and banker priced economy. Historically the bankers would cause a cash shortfall by tightening credit, forcing the owners of physical assets to sell at a loss.

Tue, 12/08/2015 - 16:30 | 6895552 wet_nurse
wet_nurse's picture

A falling price in gold/silver only means paper is being sold. There is zero correlation with the $ of phyz buying/selling. Weird world we live in

Tue, 12/08/2015 - 16:16 | 6895472 DirkDiggler11
DirkDiggler11's picture

For the last 4 straight years PM's have been sold going into Christmas, then bought right after the New Year. A wise man would buy his phyz gold just before Christmas. I would say you can then sell after the first of the year, but looking at economies across the globe, why would one want to sell any PM's right now ???

Tue, 12/08/2015 - 17:07 | 6895758 slimycorporated...
slimycorporatedickhead's picture

This is what I've been saying.. PM prices continue to decline, who in there right mind is selling physical heading into 2016, and who is going to sell physical when a global financial crisis is undeniable...? Right now there are people expecting the US economy to blast off, BASED ON WHAT??? This makes no sense at all

Tue, 12/08/2015 - 16:06 | 6895411 Hongcha
Hongcha's picture

Buying drives prices down.  Everyone knows that.

Tue, 12/08/2015 - 17:57 | 6895998 LowerSlowerDela...
LowerSlowerDelaware_LSD's picture

In the land Central Planning anything can be true.

Tue, 12/08/2015 - 15:47 | 6895298 Mercuryquicksilver
Mercuryquicksilver's picture

Talk about the tail waging the dog.

Fed vaguely hints (like a whisper in the wind of an uninhabited forest) of 25 basis points, market already priced in, gold futures bottom out physical purchase despite demand. AND goldcore tells me to hold off purchase until Jan at the earliest.

What a mixed up false economy when foreign central banks ARE the contrarian.

 

Tue, 12/08/2015 - 15:32 | 6895215 Consuelo
Consuelo's picture

 

 

As long as there is no serious escalation of hostilities between the U.S. and the Russia/China axis, which would prompt said nations into asymmetrical actions which would include the revelation and/or use of physical gold holdings in a manner hostile to U.S. global trade/reserve currency status, Nothing is going to change in the U.S. domestic precious metals markets.    The charade and chicanery could continue, perhaps indefinitely. 

Tue, 12/08/2015 - 14:36 | 6894877 SILVERGEDDON
SILVERGEDDON's picture

Paper gold 300 to one versus physical.

Easy for electron pushers to manipulate paper, work volatility for profit, and if they are smart, push profit into physical.

Because, one day, paper's gonna be worthless, same as it ever was.

Why ? because it has no basis for value, margin-ed out to 300 to one.

Tue, 12/08/2015 - 14:16 | 6894762 Soul Glow
Soul Glow's picture

Strong demand is....bearish?

Fucked up economy.

Tue, 12/08/2015 - 14:09 | 6894721 lasvegaspersona
lasvegaspersona's picture

If China commits a certain dollar sum to gold buying then they will get more tonnage as the POG falls.

Thay may be what we are seeing...or...they are tired of waiting for their gold.

I wonder how the media explains this...China's economy in shambles yet it still has a billion here and there for gold. It almost seems like gold is important.

Tue, 12/08/2015 - 14:02 | 6894672 InnVestuhrr
InnVestuhrr's picture

Ahhhh, that explains why the price is in freefall ! Thanks so much.

Tue, 12/08/2015 - 13:23 | 6894357 J_nathan
J_nathan's picture

Comex tree shake 2016?

 

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