Today’s AM fix was USD 1,462.25, EUR 1,123.43 and GBP 947.79 per ounce.
Yesterday’s AM fix was USD 1,446.50, EUR 1,107.07 and GBP 937.64 per ounce.
Comex Gold Inventory Plummet [12]
Gold climbed $33.90 or 2.37% yesterday to $1,464.30/oz and silver surged +4.83%.
Gold has surged 4.9% in dollar terms so far this week and is headed for its biggest weekly gain in one-and-a-half years. Gold has recovered in all currencies and is up by 4.8% in euro terms and 3.7% in sterling terms.
Therefore, gold has recovered nearly half of its recent sharp decline and is now just 7% below its price ($1,560/oz) prior to the futures induced sell off on April 12th and 15th.
The manipulated sell off on the COMEX has led to bargain hunting and a surge in physical coin and bar buying internationally. Gold bullion inventories on the COMEX are being depleted rapidly (see chart and data below) and certain bullion products are either out of stock or production and distribution has been suspended.
The gold sell off has stoked a frenzy among coin, bar and jewelry buyers from China to India and the U.S. and Europe.
Government mints and refineries around the world have confirmed that demand for bullion coins and bars is surging and they are struggling to keep up with the demand as are brokerages who are running out of stock, particularly of smaller coins and bars.
The Perth Mint has experienced “unprecedented activity” and one of its busiest weeks ever. Some customers are experiencing “long delays” in securing certain bullion coins and bars.
The Perth Mint have suspended production of many silver bullion products (2013 Australian Lunar snake silver bullion coins - 1 kilo, 10oz, 5oz, 2oz, 1/2oz and 2013 Australian Kookaburra silver bullion coins - 10oz. 1oz and 1/2oz) but is continuing to offer 2013 Australian Kookaburra silver bullion coins (1oz and 1 kilo).
Many bullion dealers internationally have been cleared out of stock and buyers have to be less selective in which coins and bars they buy. This is leading to rising premiums on coins and bars and to delays in buyers receiving their bullion.
The U.S. Mint’s sales of gold coins are heading for the highest in almost three years following the biggest plunge in futures prices since 1980.
Gold Prices and US Mint Gold Coin Sales (1 Year) [13]
The Bloomberg Chart of the Day shows the surge in American Eagle gold coins this month and the slump last week in futures.
Sales of gold coins from the U.S. Mint in April are set for the biggest month since December 2009 and the U.K. Mint has confirmed that gold coin purchases have tripled in April.
The risk of currency devaluations in Japan and internationally and then the confiscation of deposits in Cyprus was already leading to increased physical demand, particularly in Japan and Europe.
Bullion buyers who were getting ready to allocate capital to the gold market saw the sell off as an opportunity to buy gold at much cheaper prices and were quick to take the opportunity. The tragic events in Boston and increased geopolitical risk may have also encouraged U.S. buyers who have been buying record amounts of gold coins at these lower prices.
Gold in USD, 5 day – (Bloomberg) [14]
Demand in the Middle East and Asia, particularly China and India has also surged. This very important facet of gold demand continues to be ignored by gold bears.
The World Gold Council noted how there is a shortage of gold bars in Dubai, a primary trading hub for precious metals in the Middle East.
Gold physical demand has surged in India and China after the price drop. The two gold buying behemoths account for more than half of annual global bullion demand.
Gold imports by China from Hong Kong have surged this month as mainland buyers increased purchases after domestic prices sank to the cheapest in more than 2 1/2 years.
Volumes for the benchmark spot contract on the Shanghai Gold Exchange, China’s biggest cash bullion market, exceeded 20 metric tons every day since April 16. That’s more than four times the daily average in 2012, according to exchange data compiled by Bloomberg. Volumes reached a record 43,272 kilograms (43 metric tons) on April 22 alone.
This puts the rumour of Cyprus’ 15 tonne gold sale in perspective.
Retail sales tripled across China on April 15-16, according to the China Gold Association. Shipments to China reached a record 114,405 kilograms in December, according to data from Hong Kong’s Census and Statistics Department, which may release April data in June.
“Given that the trading volume has been so huge on the Shanghai Gold Exchange, the import volume in April should definitely reach a very high level,” said Qu Mingyu, a trader at Bank of China Ltd., one of the country’s three largest bullion banks.
Gold in USD, 1 Year – (Bloomberg) [15]
Gold stockpiles held at warehouses monitored by COMEX, fell sharply this week according to CME data:
===============================================================================
April 24 April 23 April 22 April 19 April 18
2013 2013 2013 2013 2013
===============================================================================
Grand total 7,990,799 8,345,509 8,583,373 8,781,910 8,917,901
30-day average 9,181,556 9,240,083 9,288,168 9,330,848 9,370,087
Daily change -354,710 -237,864 -198,536 -135,991 -32,497
5-day avg. % -6.1% -4.6% -3.6% -2.7% -2.3%
-------------------------------------------------------------------------------
Total registered 2,174,090 2,210,736 2,281,503 2,280,400 2,371,583
30-day average 2,634,576 2,649,134 2,664,740 2,674,676 2,684,738
Daily change -36,646 -70,767 1,103 -91,183 -389
5-day avg. % -17.1% -18.8% -15.5% -12.8% -10.2%
-------------------------------------------------------------------------------
===============================================================================
April 24 April 23 April 22 April 19 April 18
2013 2013 2013 2013 2013
===============================================================================
Total eligible 5,816,709 6,134,773 6,301,870 6,501,509 6,546,317
30-day average 6,546,980 6,590,949 6,623,428 6,656,172 6,685,349
Daily change -318,064 -167,097 -199,639 -44,808 -32,108
5-day avg. % -1.5% 1.8% 1.8% 1.9% 1.3%
--------------------Brink’s, Inc.--------------------
Total 624,888 623,602 622,749 622,749 622,749
Registered 494,576 494,576 494,576 494,576 494,576
Eligible 130,311 129,025 128,173 128,173 128,173
-------------------Scotia Mocatta--------------------
Total 2,930,817 3,020,611 3,491,842 3,241,037 3,255,905
Registered 501,155 537,801 378,053 607,465 622,333
Eligible 2,429,662 2,482,810 3,113,788 2,633,572 2,633,572
-------------------HSBC Bank, USA--------------------
Total 3,486,233 3,491,642 1,286,265 3,524,073 3,632,317
Registered 378,053 378,053 780,334 378,053 378,053
Eligible 3,108,179 3,113,589 505,931 3,146,020 3,254,264
================================================================================
April 24 April 23 April 22 April 19 April 18
2013 2013 2013 2013 2013
================================================================================
----------Manfra, Tordella & Brookes, Inc.-----------
Total 26,946 26,946 26,946 26,946 26,946
Registered 19,971 19,971 19,971 19,971 19,971
Eligible 6,975 6,975 6,975 6,975 6,975
--------------JP Morgan Chase Bank NA----------------
Total 921,916 1,182,708 3,155,571 1,367,103 1,379,983
Registered 780,334 780,334 608,568 780,334 856,650
Eligible 141,581 402,374 2,547,003 586,769 523,333
================================================================================
NOTE: Levels are in troy ounces. SOURCE: CME Group Inc.
COMEX gold inventories are registered gold bullion bars that meet the standards for delivery under gold futures contracts and for which a receipt from an Exchange-approved depository or warehouse has been issued.
JP Morgan’s eligible gold inventories fell by more than 70% this week which suggests there may be supply issues in the larger London good delivery gold bar market also. This is important to keep an eye on next week.
The death of the gold market is greatly exaggerated and gold’s long term secular bull market is set to continue due to very large and increasing physical demand for bullion internationally.
Ignore the gold doomsters who do not understand gold and have been wrong about it throughout the gold bull market of the last 12 years.
This is a buying opportunity. Secure your allocated bullion and take delivery of gold and silver bullion coins and bars while they are available and premiums, while higher, remain relatively low.
The violent sell off in the gold futures market has shook weak hands out of the market but gold’s long term fundamentals remain sound and it remains a vital diversification for all wishing to protect themselves from currency devaluations and the significant systemic risk of today.
GoldCore April Insight
The recent fall in the price of gold has proved to be a gift to other investors as small denomination bars, at the time of writing, are now difficult to source in India, Singapore, Japan, China and Europe.
In this month’s edition of Insight [16] Chris Sanders argues that the real issue is that we are not accumulating enough capital to replace depreciating assets, particularly with regard to the production of energy. Accompanying this alarming reality is the apparent reckless abandon with which the banking fraternity in the US is ‘bending’ COMEX’s rules and over in Cyprus, treating depositors’ savings as their own personal safety net.
In this edition of GoldCore Insight you will find out about:
• The Cyprus rubicon - depositors' savings are fair game
• How energy will shape our future
• The importance of owning physical bullion
Download here [16]
