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Gold Support at 144 Day Moving Average at $1,603; Chinese Gold Demand “Extremely Strong”
Submitted by GoldCore
Gold Support at 144 Day Moving Average at $1,603; Chinese Gold Demand “Extremely Strong”
Gold is trading at USD 1,655.70, EUR 1,232.18, GBP 1,065.81, JPY 126,856.60, AUD 1,703.34 and CHF 1,523.38 per ounce.
Gold’s London AM fix this morning was USD 1,662.00, EUR 1,222.96, and GBP 1,064.09 per ounce.
Yesterday’s AM fix was USD 1,664.00, EUR 1,226.59, and GBP 1,063.74.
Cross Currency Rates
Gold closed marginally higher last week which will embolden some technical traders. After the sharp fall seen in September, gold looks well supported at the 144 day moving average which has edged up to $1,602.95/oz (see chart below). The 144 day moving average has provided strong support for gold in recent years and may again prove a valuable technical aid.
Fundamentally there is also strong demand above $1,650 and especially near $1,600/oz. A large Tokyo based bullion house told Reuters that "we see the bottom for gold prices at $1,600 . . . When gold prices approach that level, physical demand from emerging economies rises."
Given the scale of the selloff in September, the market may require more time to compose itself. Further consolidation between the 100 ($1,660.90/oz) and the 144 ($1,602.95/oz) day moving average is possible and has been the pattern after selloffs in recent years.
Gold in USD – 2 Years (Daily) with 100 (White) and 144 DMA (Green)
Fundamental support continues to come from physical demand particularly in Asia.
Premiums for gold bars in Vietnam were at $22.21 to world gold of $1,648.70 on Monday.
Premiums for gold bars in Hong Kong are at $3.00 an ounce over spot prices, their highest level since at least February. Shanghai gold closed at a very healthy premium of $21.81 to world gold of $1,656.60.
Physical demand for gold in Shanghai has been “extremely strong” this week following the week-long Chinese holiday, Mitusi note in their morning report.
UBS are more circumspect but note that physical demand in China appeared to be “quite decent” in the first trading day after the Golden Week holiday. They note that combined volumes for the SGE Au9999 and Au9995 contracts surged to the highest since February 14th. Year-to-date volumes are now 11% higher than 2010 levels.
UBS “expect demand to remain strong until the Chinese New Year holidays in late January 2012.”
A further sign of the significant scale of demand from Asia and from China in particular is seen in the news today that China has installed its first gold vending machine. More importantly, China and Chinese banks are planning to roll out another 2,000 gold ATMs nationwide. Each ATM can hold up to 200 kilograms of gold bullion in varying denominations at once.
The handful of ATM machines internationally selling gold bars have received much media attention and some have suggested that these few gold ATMs signal a top in the market.
The rolling out of 2,000 gold ATMs in China in the coming months is a further sign of China’s nearly insatiable appetite for gold bullion and a sign that demand is likely to remain robust for the foreseeable future.
The per capita consumption of gold of nearly 1.3 billion Chinese people continues to increase from a very low base.
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NEWS
(Mineweb) -- China installs gold vending machine, plans 2,000 more
http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=137215&sn=Detail&pid=102055
(Bloomberg) -- Gold Drops From Two-Week High Before Slovakia Bailout Fund Vote
http://www.businessweek.com/news/2011-10-11/gold-drops-from-two-week-hig...
(Reuters) -- Gold extends gains on EU debt hopes
http://www.reuters.com/article/2011/10/11/us-markets-precious-idUSTRE78M...
(Bloomberg) -- Gold Extends Biggest Advance in a Month as Debt Optimism Helps Buoy Euro
http://www.bloomberg.com/news/2011-10-11/gold-may-advance-a-second-day-a...
(CNBC) -- Dennis Gartman: Gold Market Giving Europe Thumbs Down
http://www.cnbc.com/id/44849999
COMMENTARY
(Zero Hedge) -- Peak Silver Revisited: Impacts Of A Global Depression, Declining Ore Grades & A Falling EROI
http://www.zerohedge.com/news/peak-silver-revisited-impacts-global-depre...
(History Channel via YouTube) -- Decoded: Ft. Knox Gold
http://www.youtube.com/watch?v=IXXMSduH6YE&feature=share
(Dollar Collapse) -- Doug Noland: “The Situation Is Utterly Hopeless”
http://dollarcollapse.com/the-economy/doug-noland-%E2%80%9Cthe-situation...
(New York times) -- Panic of the Plutocrats
http://www.nytimes.com/2011/10/10/opinion/panic-of-the-plutocrats.html?_...
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if we get 2008 again i can see gold coming down to 1300-1400 where I will continue to add to my position.
knight99
If it fails to hold $1,600.00, you will get your wish.................down to around $1475-80.
Back up de Truk.
Stop supporting China's alternate currency which was devised by their government to protect their citizens from inflation caused by artificially pegging the yuan to the dollar. They are stealing our economy and laughing at us while spreading propagnda about how the US and other developed world is Su redding the price of gold even though they own most of it. This is so they can support gold prices to keep their citizens happy without having to buy more of a metal with no strategic value. Please think about why China would hoard gold and market it to their citizens. It's so they don't have to appreciate the yuan.
Idiot.
Hence the appropriate moniker.
no wonder you're "broke"....
suggestion....travel back in time to just before the Clinton's sold you out and make Vince Foster kill them both...then hide the evidence...otherwise,
c'mon back to earth son, face the sad old truth, the dirty lowdown...
btw...there's an edit button...learn how to use it, or folks here will just assume you're in a hurry to collect yur gubbernment paycheck!
Along that line: So when do we get our gold ATMs? Buying PMs online is getting scary to say the least.
Our bankers don't want that.
If they did there would only be a few. Too much theft risk for most locations. Fully stocked Chinese style gold ATM holds ~200 Kilos Au, or over $1 mil at current market. Americans would want Eagles or fractional which are not trackable like numbered bars.
A kilo of gold is approx US$50,000, so 200 kilos would be about US$10 million not US$1 million.
Thank you. 32.15 troy oz per kilo yields ~10.6+ mil. Used calc to be sure and then missread or misstyped result!. Time for better reading glasses!
Broke, 1 week, 6 days. Red.
Charlie,
That was the correction.........................IF it breaks it again, then we go to $14teens.
very few chinese own gold. there isnt enough bars on the windows now to protect your TV.
Test, why my comments always stripped from ZH.
Test, why my comments always stripped from ZH.
Don't know, but you might try posting thoughtful comments that others will want to read. Pay attention to grammar, spelling, and punctuation; the quality of your writing is a reflection of your thought process.
Suggestion: provide some links on gold ownership among Chinese individuals.
ptolemy_newit
Compared the the 1.2B pop, yes.Compared to the new Urban dwellers, the stores are full of buyers,snatching all they can afford.
Chinese folks have seen the fiat game before, and Homey don't pay there,they know what is money.
Buy platinum, it's worth more than gold and is cheaper.
Doubling down on stupid this morning?
I remember about 5 years ago, when platinum was double gold. On that basis it looks cheaper, and in fact is much rarer in terms of how much of it there is above and below ground.
The problem is one of context: about half of platinum is used for auto emissions-control devices. Unlike 2006, we're at global overcapacity in new-car production, plus most platinum from junked cars is recovered (unlike silver, which is too cheap to be worth recovering in small amounts).
Gold is a bet on current instability, corruption, incompetence, collapse, and (possible) re-structuring of world monetary systems. Platinum is a bet on high auto sales (and concern with emissions) in the emerging world. If this latter outcome emerges, it's a ways down the road and will have to contend with the effects of peak oil, plus a possible substitute for platinum in cars.
Sure, hold some platinum, it does look cheap. But bury it deep, as you won't be cashing it out for years to come.
Wealthy folks prefer Plat to Gold for jewelry, as it's* I think* approx 32x's more rare than Gold.
It also cost's approx $1500.00 oz to mine.It's mined and extracted with Rhodium, and Palladium.
So, I would say your correct, but if it goes to any lower, get some.Buying at current costs $1500,is a deal.
Because at $1500,it's at out of the ground cost.(plus SA is the provider for 3/4th's the world supply,never a stable place w/regards to miners.), and to bring on a new Plat mine takes YEARS, and costs approx 1 Billion.
Will Cash 4 Gold's start popping up next to the atm's?
The ATM's will also purchase gold. Without raping the seller
HAHAH, There is only one little problem with this ATM scheme.
Remember the last summer day when you were thirsty and went to a Coke machine, deposited the correct amount of coinage.......click,click...Buzzz...thunk. NO PRODUCT DISPENSED.
Now suppose you just deposited $3200 for two nice shiny Pandas and this happens....PHUCK ME: Talk about kicking and beating the shit out of a vending machine. They better build them out of boiler plate.
And, then there is the kid with the coat hanger digging for bars.
Or how about the guy who rolls around the dolly full of twinkies and cupcakes. What is he going to do when he makes $10 bucks an hour but his dolly does not have candy bars, but 20 lbs of AU? You had better screen those employees carefully. I want to apply for the first job driving that Armored Hostess Cupcake truck; Have Passport, will travel.
Phucking machines.
PaperWillBurn
The ATM's will also purchase gold. Without raping the seller
Yeah, that's just a USA deal...............................
2000 ATMs all fully loaded with 200 kg = 400 metric tonnes of gold, which is more than Gordon Brown sold off from the UK reserves at 'Brown Bottom'.
Western government behavior is a good contra-indicator. Sell what they buy (Dexia, AIG, Greek bonds), and buy what they sell (physical gold, firearms).
A further sign of the significant scale of demand from Asia and from China in particular is seen in the news today that China has installed its first gold vending machine
This if a further sign of extreme bearishness in gold.
The big question about this gold ATM if they accept it back :)
O, crap I just paid 20% premium for this gold in ATM, let's see where can I exchane it? What, another 10% in exchange rate in the bank?
A few more legs to the downside before recovery can take place.
We never got a decent retest of the spike low, buyers jumped in too fast.
Exactly, combine that with further USD strength and its a no brainer to sit on the sideline and wait (for physical accumulation that is). Shorting XAU is looking pretty good though.
how much are CBs still willing ot sell in order to supress the price? with the implosion of the whole fiat fx system, CBs are actively BUYING gold now. it's banks that are trying to supress now, bc otherwise they are done and done. but their old friends (SNB, FED, DBB) are no longer on board, and Chinese CB is building up stock...
Since you're German, can you tell me if Germany ever got its gold reserves out of New York? Or were they 'lent out' to the bullion banks along with the contents of Fort Knox?
I suppose that the suppression will go on as long as CBs can print money to cover the losses on their paper shorts.
Emerging-market CBs are buying, but I'm not sure about G20 CBs. I think a lot of them sold long ago and are sitting on IOUs from those very banks they're bailing out. For that reason, I'm not sure that you can separate the TBTF banks from the G20 CBs. From our vantage point, their interests are almost identical.
that's right, no more gold reserves. so that's why merkel will do everything to keep the euro.
*
Chinese banks are planning to roll out another 2,000 gold ATMs nationwide. Each ATM can hold up to 200 kilograms of gold bullion in varying denominations at once.
This is big. They´re building 400 metric tonnes (possibly daily?) domestic physical volume . OMG, they really are going GOLD
Good point, though I would say that this is 400 tons of inventory, not volume (which has a time dimension).
Even more significant than the size is that common folk are being encouraged to buy. As Broke433 pointed out earlier in this thread, it is one way for the Chinese to sterilize some of the inflationary yuan printing that they must do to keep their dollar peg. Also, by providing workers with an inflation hedge they may help to reduce the unrest that would result from a bout of really high inflation.
On the skeptical side, at 200kg per machine, that would make each one worth about $10 million. Knocking over a typical armored car wouldn't get you that much, and would be riskier. So I doubt that the machines will be fully stocked, for security reasons.
Would not want to be the guy stocking such machines in US, armored car or not. Doubt we see many of these machines here anytime soon.
Technical Analysis is not always suitable for gold,specially when a systemic crisis is ante portas.
dumbdumb. gold price has been suppressed for 40 years due to gold-carry trade. expect price continue to rise until it catches up with shit fiat fx (or should i say shiat fx)
Find a moving average that works for your confirmation bias and run wif it!
Not me; I'm a fundamentals investor. I only read news stories that confirm my opinions. I would like to read some sensible anti-gold writing, but it all seems like idiotic propaganda.
What's a devil's advocate to do?
here:
http://lips-institute.ch/en/
http://www.gata.org/
if you don't understand how the gold price has been fixed since fiat came along, you don't understand that now it will become difficult to keep the price under control
Thanks for the links, esp. Lips (I wasn't familiar with him), but these are pro-gold. I'm already pro-gold, but would like to counteract my confirmation bias by reading good anti-gold material.
The gold price was fixed under the gold standard as well as the Bretton Woods standard. Now it is not fixed, but merely manipulated. I realize what they're doing, but want to illuminate my blind spots; reality check and all that.
bad choice of words, of course i meant that the gold price was (is) manipulated.
I don't think you will find anyone who wrote explicitly anti-gold, since no one is that stupid...
for a discussion, this should serve your needs:
http://books.google.de/books?hl=de&lr=&id=tbhNKNAlEikC&oi=fnd&pg=PR9&dq=...
I think you overlooked Jon Nadler, resident anti-gold and pro-fiat propagandist of Kitco.com:
http://www.tomaveni.com/Commentary/Nadler-01.htm
http://www.tomaveni.com/Commentary/Nadler-02.htm
http://www.tomaveni.com/Commentary/Nadler-03.htm
http://www.tomaveni.com/Commentary/Nadler-04.htm
http://www.tomaveni.com/Commentary/Nadler-05.htm
http://silverenthusiast.com/grading-jon-nadler/
One i read today.
http://www.marketoracle.co.uk/Article30884.html
Site carries varied opinions on the metals
Gold has probably bottomed at 1600 and will only go down more if there is a default/bankruptcy somewhere.
I think the Gold ATMs are not a good thing because they charge very large premiums, so they actually exhaust/waist the Gold buyers fire power
These ATMs do not signal a top, in fact nothing signals a top a nothing will, because there will be no top this time around. The Volcker high interest rates that kill Gold is a one-time trick, it can’t be done again, so forget about a top in Gold.
Real, universal, stable money is coming back and that is it, there is no way to stop it.
I beg to differ. No investor would buy from an ATM machine, just like anyone buying from ATM would probably not take the time to go to a dealer and buy. It's just more general public consumption. These same ATM buyers will be lined up to sell when the price crashes.
These same ATM buyers will be lined up to sell when the price crashes.
You mean when the the fiat useless fiat crashes?.The Chinese are selling the PM's to their folks for FUTURE protection,against the super high inflation that follows deflation.
They do not have any Social back up sytems, they must pay for their own needs.
NO FREE rides on the Commie System....................
What you say is mostly true. What he said is possible. It will be interesting to see if the Chinese retail buyer panics out of gold, when/if a Euro crash causes a dollar/yuan spike. I'm not betting on that one.
Gold may see a temperary pullback before it continues higher in the weeks ahead. http://bit.ly/nXET06
Gold will do everything that I don't want it to do, until in the end it gets where it was always going.
Gold doesn't move; it just exists. Paper money, on the other hand, gets to where it was always going, as Voltaire memorably put it. This is defensive, not offensive, investing. (Although, if FOFOA is right, your lifestyle could be drastically changed by a sudden revaluation.)
I'll just leave this here: http://www.marketwatch.com/story/why-jim-rogers-is-right-about-commodities-2011-10-11?dist=beforebell
I agree with the comment above that TA is not always useful for Gold. The price is manipulated by CBs who want to scare the public away from Gold. CBS are increasing their stakes in the world gold supply, and they want to do so whilst the price is still low. Yes, it may dip below $1600, but if you wait too long for lower prices they may not happen.
criminals have heisted ATM machines for years that just held cash.....i can only imagine the criminal interest in Gold ATMs.
Criminals heisting gold ATM machines in China? Get real! 1 bullet in back of head... instant justice.
BTW, I suspect that an ATM containing hundreds of thousands of Yuan in gold has several armed guards standing nearby, monitoring all that happens.
China is slowly moving toward a gold referenced currency... regardless of how much the dollar and euro fiats are debased.
mist - good article re Jim Rogers. One does really have to respect what the growing demographics of this country in terms of commodity price impact. I recall an illustration I read that if all the people in China ate one egg a week, it would take all of Canada's grain production just to feed the chickens.
Daily moves in the PM's are for the paper guys that trade beta and COT data interpretation (correctly or incorrectly)....Who cares! When you have extra $ buy some...Try not to buy alot at once and the daily/weekly noise melts into the monthly/yearly...We'll let you know when this PM bull market is over or getting really toppy!!! It's not today!!!
For the PM daytraders though...I have definitely noticed a routine-ish-like behavior lately...The 2:00 AM (NY) selloff in Hong Kong is getting pretty predictable...The paper guys like to mix it up where the kill-zone is just to make it interesting....
I sat for some long minutes last month in a few Bank of China lobbies and watched the captive audience videos running non-stop ads selling gold and silver bullion.
I confess I don't much like Chinese coinage stylistically (except when they reproduce their excellent dragon coins of the Late Qing Dynasty).
So the impression I got was that the Party wants people to buy gold/silver.
Contrast with the United States, where all the ads are about SELLING it.
All mega-governments are to be despised; like the chicken despises its keeper no matter how good the feed is. I'm not saying its right but you have buyers in China and sellers in the USA.
We also have drinkable water here and air that does not taste like a huff of modelling glue.
Saxon: The Modern Chinese Coins (especially 1979-~2004) have been 'The Place to Be' for atleast the last decade and really really 'The Place to Be' the last couple years...You coulden't have better PM coins than those...I agree with you though! The US Gov doesn't seem to push the PM's much here in America
Deleu; I don't deal or trade them but do I know the Pandas carry a premium over comparable .999 one-oz. coins. I just don't like the cartoonish, soft-impact rendering. The new coins I saw in the PRC (and there are many new ones) to me lack character. This is all subjective of course. For my money the 20th Century U.S. coins are the most beautiful.
And there is no interest whatsoever in U.S. coins in the PRC. Like cigarettes (dozens of brands, all run through the Party), the Chinese are only offered Chinese.
Saxxon,
And there is no interest whatsoever in U.S. coins in the PRC. Like cigarettes (dozens of brands, all run through the Party), the Chinese are only offered Chinese.
Sure there is, but the Reds will not alllow them into the country.
PM paper is not gold. so it does not really help to look at intraday/daily charts for the big picture. trade PM paper with market hours, buy physical for the long run
All I know is that the correlation between equities and PMs certainly appears to be back. I don't like that.
I wish this country would get some gold vending machines installed.
"Gold vending machine comes to Fla.
BOCA RATON, Fla., Dec. 17 (UPI) -- A German company specializing in vending machines dispensing gold bars and coins picked Boca Raton, Fla., as its first U.S. test market, a U.S. company says.
PMX Gold, the Boca Raton company operating the machine for German company Gold to Go, said the vending machine was installed at the Town Center Mall in Boca Raton after similar machines were previously installed at international locations including the Emirates Palace Hotel in Abu Dhabi"
Read more: http://www.city-data.com/forum/personal-finance/1371162-news-gold-vending-machine-comes-fla.html#ixzz1aTrwRq84
By the time this deflationary depression is over, I think gold may be close to $550 in 2015 (give or take), before going past $2000. Here are some estimates of turning points in the price curve: http://econocasts.blogspot.com/2011/10/cycle-models-gold-long-short-term...
http://globaleconomicanalysis.blogspot.com/2007/01/gold-and-k-cycle.html
In the credit crunch of Winter deflation, gold and currencies are hoarded and the purchasing power of both rises. If anything, the CPI adjusted price as shown above during the Great Depression does not really do justice to the mammoth increase in assets such as land or stocks that gold could buy. Instead it reflects purchasing power on a general basket of goods and services. The same thing is likely to happen again.
Got to add though -
Gold vending machines in China, PAGE getting closer and closer, China lowering their own currency to match the Dollar so they can keep on selling cheap goods whilst telling their people to buy gold.
Its sounds like we getting closer and closer to a Gold reserve currency!!
The handful of ATM machines internationally selling gold bars have received much media attention and some have suggested that these few gold ATMs signal a top in the market.
Yeah, 2000 of them, and the largest population on the planet, that saves an avg of 50% of their spending cash,is going to stop?.
Uh, right.
These bitches are going to wind up owning 85% of all of it before we're thru.
And they will never be through, their savers, and Gold & Silver is their preferred FIAT.
Excellent - because with the Pacific Decadal Oscillation (PDO) going into the 30 year cold cycle, agricultural production in China, as well as elsewhere, will likely fall. So - at least they will have golden bars to pay for golden sheaves from the US and Canada.
Probably a dumb question, & I'm as big a gold bug as the next guy, but we *have* seen this movie before. I'm seeing stuff in the article and the comments about gold technicals, and chinese ATM's, and such....but no mention of the possibility/probability of the next margin hike/serial margin hikes. Like any good criminal, TPTB seem to have found them a fine M.O. for pounding down PM's when they get too uppitty. One that logic says they'll keep using til it stops working. But no one's talking about that.
Are they done with the rate hikes? Are we at a margin rate maximum? Did I miss that memo?