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Chinese 'Gold Rush' -Year of Dragon First Week Sees Record Sales– Up 49.7%
From GoldCore
Chinese 'Gold Rush' -Year of Dragon First Week Sees Record Sales– Up 49.7%
Gold’s London AM fix this morning was USD 1,720.50, GBP 1,097.40, and EUR 1,310.06 per ounce.
Friday's AM fix was USD 1,722.00, GBP 1,095.98, and EUR 1,310.30 per ounce.
Cross Currency Table - Bloomberg
Gold prices fell in Asia and in Europe this morning with profit taking after last week’s 4.3% gains seems the primary reason for today’s weakness.
However, gold prices are likely to continue to be supported by the continuing Greek debt saga (and risk of contagion) and developments in the increasingly tense situation with Iran (and the risk of war).
Iran
US President Obama, signed a law on December 31st that seeks to penalize countries that import Iran's oil or transact with the Islamic Republic's Central Bank. Europe has also imposed sanctions on Iran's oil imports from July 2012. Measures also include an immediate ban of all new oil contracts with Iran and a freeze on the assets of the country's central bank within the EU, due to their nuclear program.
Gold Spot Dollar/oz – 5 Days (Bloomberg)
India has had friendly relations with Iran for years and will now find itself in a mire of political manoeuvring . It wishes to keep relations on a good footing with the US and Europe but has the dilemma of being dependent on oil from Iran and other countries.
EU
These tensions plus the decline of the dollar’s value has strengthened gold in the past month.
European leaders are meeting today in Brussels about jobs and economic growth but the Greek debt situation may again dominate.
As long as the failed panacea of recent years - to print and electronically create money and pile more debt upon already massive levels of debt – continues to be seen as the solution – gold’s foundations remain very secure.
XAU-EUR Exchange Rate – 5 Days (Bloomberg)
Only the massive writing down of and forgiveness of debt and massive deleveraging in the banking system can help ameliorate the European and global debt crisis.
China
Xinhua, the official press agency of the government of the People's Republic of China reports that a "gold rush" swept through China during the week-long Lunar New Year holiday this year, with demand for precious metals and jewelry surging since the Year of the Dragon began.
Data released by China's Beijing Municipal Commission of Commerce shows a 49.7% increase in sales volume for precious metals jewelry and bullion during the week-long holiday (over last year), which lasted from January 22 to 28 over that of last year's Spring Festival.
One of Beijing's best-known gold retailers, Caibai, saw sales of gold and silver jewelry and bullion rose 57.6% during the week long New Years holiday according to data released by the Ministry of Commerce (MOC) on Saturday,
Other jewelry stores across the country also saw sales boom during the period, with customers favoring New Year themed gold bars and ingots and other types of Dragon themed jewelries.
During the week-long holiday, which lasted from January 22 to 28, the sales volume in just one gold retailer, Caibaiand Guohua, another of Beijing's top gold retailers, reached about 600 million yuan (nearly $100 million).
Caibai began selling gold bars as investment items during the 2008 Beijing Olympic Games, but the trend of buying gold or silver bars during the Spring Festival has taken off in the past two years.
In much of the western world where gold remains a fringe investment of the smart money (some pension funds, central banks and high net worth) the retail public has predominantly been selling gold (in the form of jewellery) and very few own gold coins or bars.
XAU-GBP Exchange Rate – 5 Days (Bloomberg)
This is in marked contrast to China where buying gold as a hedge against inflation and as a store of wealth has now firmly entered the mainstream in a country of 1.3 billion people.
"Long treasured by Chinese, gold is no longer owned only by a privileged few, but has become a new investment channel open to all," said Guan Qiang, assistant manager at Caibai.
Gold's secular bull market will likely continue until gold has entered the mainstream and a 'gold rush' consumes the retail public in the EU, UK, US and other western nations.
For breaking news and commentary on financial markets and gold, follow us on Twitter.
SILVER
Silver is trading at $33.17/oz, €25.28/oz and £21.14/oz.
PLATINUM GROUP METALS
Platinum is trading at $1,598.00/oz, palladium at $676/oz and rhodium at $1,325/oz.
NEWS
(The Economic Times)
Gold edges lower from 7-week high; Greek debt talks eyed
(China Daily)
Spring Festival sparks a 'gold rush' in China
(Emirates247)
Gold up 10% on rumours that India, China will pay in bullion for Iran oil
(TehranTimes)
'India resolute to buy Iran's oil'
(Barron's)
Hedgies, Managed Futures Funds Raise Stakes In Gold & Silver
(MarketWatch)
CME adds Deutsche Bank to gold custodian providers
COMMENTARY
(Forbes)
Gold Is The Hottest Currency In The World
(NASDAQ)
Silver Singularity Is Near
(FT)
Fiscal Treaty Could Trigger "Debt Explosion"
(KingWorldNews)
Russell - Gold Threatening Dollar’s Reserve Currency Status
(ZeroHedge)
Davos Post Mortem
»
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Is that up 49.7% from the week before ?
What a gigantic sucking sound.
and of course it's blindingly obvious why gold is now going down... not...
The Chinese are buying up gold
Despite all the lies that we're told
The modern day caper
Is those holding paper
Will soon be left out in the cold
Well.....we'd better take some hot QE cash and drive that crap down.
See? Everything is fine....trust us.
If they're going to subsidize it.....I'm going to buy it. If they can just hold the beach-ball underwater for a couple more hours.
Or from the same week last year ?
Do they know something we don't?
yes. it's the year of the water dragon. water=wealth and dragon=risk-taking adventure
though I would point to their high inflation since a while and of course their historic love for a metal they only now may buy legally
Poor things, they don't have Roubini to guide them.
China gold frenzy: some pics I took at the Caibai market.
http://investinginchinesestocks.blogspot.com/2012/01/china-gold-frenzy.html
Great pics.
Is that level of activity regular for the market? When were the photos taken?
http://www.bullionbaron.com/
Were they having a sale, or is it always like that?
/Mike
Compare gold and silver prices
Mmm, enough to make a Barbarian very hungry! :>D
Golden dragons. What's not to like?!
;)
The Water Dragon awakens.
Take delivery FiSHeS.
I am starting to get cognitive dissonance. A few days ago I met a guy working for a Wall Street hedge fund. Very clever guy (far smarter than me). He isn't a trader but works in one of the risk control functions. He takes a completely opposite view of everything - he thinks the US Dollar is in deflationary mode (so will keep gaining value), he has all his money in USD cash and he thinks that any talk of hyperinflation and/or US Government default is "nuts". He also thinks people buying CDSs on US Government debt are "stupid" and will only end up losing a ton of money. He also said that if he was a bank, he would be issuing CDSs on US debt left, right and centre as there is zero default risk.
Politically, the guy is totally pro-Obama and said he would vote for him as he is a much better president than any of the Republicans America has had in fifty years (including Reagan). He thinks there is no real problem with the debt (which he says Obama has only increased by 16 percent - that's not a typo). He also thinks there is tons of economic growth ahead and that the US Government can ëasily"increase revenue by taxing corporations more.
When smart people say such things, I don't know what to think. Am I stupid or is he? he thinks keeping physical gold is nuts.
Sophisticated guys often have trouble with grasping simple things.
One, he is talking his book. Especially if he works at a hedge fund.
Two, you need to make your own decisions after due diligence- get a number of expert opinions.
Three, in a system where all information is compromised, it is difficult to make good decisions.
Four, Gold has no counterparty risk.
Five, if you are not sophisticated enough in economics and finance to understand trends and consequences, you might at least consider eliminating counterparty risk.
Six, dollars, equities and bonds have counterparty risk.
Good Luck!
He has a complete view - everything syncs (or, indeed sinks..) with everything else. If you asked him about the performance of physical gold over the past 5-10 years & how that squares with being nuts & vis-a-vis keeping all in USD how do you think he could have re-traced his arguments? (or rather, simple assertions)
If the 'gold is nuts' assertion fails, so does the rest by implication.
A friend of mine knows (reasonably well) two middle-ranking Goldman Sachs functionaries whom he tries to 'interrogate' about the whys & wherefores & how they think things are going, in the general economic world-view sense - hey guess what, they don't - they don't have a view that is. They know that whatever happens, they're in the brokerage/arbitrage/manipulation mix & will win whatever happens. Having a 'view' therefore, is redundant.
The most bright and inteligent people are often the most prone to fall for their own subconscious emotional traps. It's probably something to do with them being used to use logic and raw mental power to figure out and influence things in their profession - it makes one underestimate the power and influence of that which has little to do with logic.
To put things in another way, this guy is probably so personally and emotionally invested in a specific model that he can neither see it's modes of failure nor envision it's fall. All this would be at a subconscious level, subtly affecting his logical conclusions via his axioms (the base assumptions of things that "just are" - for example 1+1=2 is an axiom) on top of which his building of logic is built, his estimations of the likellyhood of events and even the universe of events he can conceive of.
On the outside you have a seemingly inteligent person with an extremely complex logical building of why things are going to be/not-be a certain way yet if you have the ability to dig through the complexity you find out sandy foundations and cracks on the wall. The funny bit is that if you start picking up and challenging his logical assumption he will probably react emotionally, with anger, rather than logically looking at your argument - this is usually your best indication that you are dealing with the kind of individual I described above.
Personaly I call that being inteligent but not smart.
When people contradict me, I rarely get angry with them. I use it as an opportunity to question myself. At the end of the day, it is not about winning or losing arguments, it is about winning or losing money. If he gets it wrong, not only will his ego take a pounding from being wrong, so will his bank balance (and perhaps his political views will not be quite so smug).
I sometimes wonder where the likes of Krugman put their money. I can only hope that he has it in cash and UST because he is so effing clever compared to the "idiots" who believe in sound money and gold. Ergo, he puts his money where his mouth his. I'd like to see that sunofabitch's face when he loses his shirt. His kind do get under my skin but I have learnt to discipline myself and not let them bother me. But it would be sweet justice if he were to be utterly ruined financially. That would be fantastic. He can take his nobel pipe and smoke it for what it is worth.
I lived in Shanghai from 2003-2006 and went to the gold markets next to Yu Yuan gardens at least once a month - if not bi-weekly. I have been in all seasons and all types of weather. While I did see it busy some times, I never saw a gold shop that crowded in Shanghai.
By the way, some of the shops there were massive - two floors, each about 3-4,000 square feet, all full of 24k solid gold. You had to search to find 18k or silver! The funny thing is that the unique items could have fit in to a 1,000 square foot shop - it just repeated itself again and again.
Also, it was very easy to use the gold purchases as savings because:
1. the government only charged about 1.5% (or so) a tax on the sale of the gold - thus you got "dinged" about 3-4% to buy it and sell it back to them.
2. the government would allow you to trade up at no cost - I changed rings and necklaces up to something larger or more decadent, with credit given at the spot price on the day of the trade, on several occasions.
3. I never recall using a passport or id during any exchange.
Man are they civilized in that respect.
How did you get all your booty home?
Boating accidents occurs in China too
I lost all my gold in a tragic rickshaw accident in Shanghai.
perhaps a reason for the run up in gold last week. Suckers were buying at the market so the market maker kept raising the offer
I see the fucking PigDog Manipulators of the precious metals money done their dirty deeds over that late night/early morning...
Fuck you's bankers....
Each and everyone of you's......
See ya's in hell......
And looking forward to it.
Gold prices fell from profit taking....???
Ya.....Okee Dokee..........
Tragic. A billion Chinese have no idea that gold she is in a bauble.
Well, if I were Chinese and faced with a cratering real estate market and currency issued by a communist government, pm's would be a logical investment...just the same situation we face....perhaps they are ahead of us on the learning curve?