Today’s AM fix was USD 1,360.00, EUR 1,015.38 and GBP 867.29 per ounce.
Yesterday’s AM fix was USD 1,365.75, EUR 1,020.28 and GBP 871.29 per ounce.
Gold rose $4.70 or 0.34% yesterday, closing at $1,371.30/oz. Silver fell $0.16 or nearly 0.69%, closing at $23. Platinum rose $11.94 or .8% to $1,514.24/oz, while palladium was down $2.57 or .3% to $744.93/oz.
Click here to download our latest edition of Insight: LBMA Data: Beyond The Smoke And Mirrors [8]
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Premiums on the Shanghai gold exchange are robust at $21 over COMEX spot suggesting robust physical demand. Volumes in China remain high and volumes on Shanghai’s benchmark spot contract climbed to the highest in more than two weeks.
Gold Prices/ Fixes/ Rates / Volumes - (Bloomberg) [9]
Assets in the SPDR, the biggest exchange-traded product, expanded for the fourth time this month which may also be supporting gold.
There continues to be confusion regarding when the U.S. Federal Reserve will begin to curb its radical and highly unorthodox $85 billion debt monetisation programme.
The Fed’s July minutes are released at 1800 GMT. Fed officials don’t have a consensus view and several Fed bank officials that have spoken in the press recently don’t even have voting rights.
As ever, it is best to watch what central banks do and not what they say. Monetary policies are set to remain ultra loose for the foreseeable future despite any Fed ‘tapering’ or tinkering at the edges and this is bullish for gold.
India has no proposal to lease gold bought from the IMF according to India’s Economic Affairs Secretary, Arvind Mayaram. His comments came in a text message.
The influential in India, Hindu Business Line newspaper, had reported earlier that the government will consider leasing out 200 tons of gold bought from IMF in 2009, citing finance ministry officials it didn’t identify.
With strains in the LBMA gold market [10], further pressure may be being applied to India to now help with supply after their recent draconian attempted measures to restrict demand.
Russian gold holdings rose another 200,000 ounces in July and rose to 32.2 million ounces or 913 tonnes as of August 1st (according to Bloomberg figures).
The Russian gold reserves were worth some $42.6 billion at the end of last month, the Russian central bank, Bank Rossi, says on its website.
Russian Gold Reserves Million Fine Troy Oz - 1994-Today (Bloomberg) [11]
The central bank said its gold and foreign exchange reserves were $507.8 billion as of last Thursday. Foreign exchange reserves include monetary gold, special drawing rights, reserve positions at the IMF and foreign exchange.
Thus, Russian gold reserves have nearly trebled in seven years since 2006 and gold now constitutes over 8% of Russia’s overall exchange reserves.
However, Russian gold reserves remain miniscule both in overall tonnage terms versus other countries and also as a percentage of their overall fx reserves.
Wikipedia [12]
They are small versus those of the U.S. at over 8,133 tonnes (unaudited and unconfirmed) and Germany at 3,391 tonnes. Although Germany is having difficulty in repatriating its gold reserves from the U.S. and has been told it will take several years.
Central banks remain net buyers of gold and this remains a fundamental and an important pillar of support for the gold market.
Yet, total global gold reserves today at 1.023 billion ounces or 29,000 tonnes remain small even versus those seen in the 1960s and 1970s.
IMF World Gold Reserves in Million Fine Troy Oz (ex China) [13]
29,000 tonnes is worth $1.4 trillion - not much more than recent U.S budget deficits in one year.
This is despite the massive increase in money supplies and foreign exchange reserves throughout the world in recent years.
Central banks represent the smart and ‘insider’ money in the world and investors and savers would do well to pay heed at central banks continued diversification into safe haven gold.
