Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Seeker Closing Report: Gold and Silver Trade Mixed With Stocks
By: Chris Mullen, Gold Seeker Report

Gold And Cryptos Destroy Fiat
By: Stewart Thomson

Mike's New Crypto Documentary And Large Silver Purchase
By: Mike Maloney

CPM Group’s Jeff Christian Responds “NEGATIVELY” To The SRSrocco Report On Silver Investment Demand
By: Steve St. Angelo

Low Silver Price Creating Buying Opportunities; SilverCrest Preparing for Maiden Resource
By: Nicholas LePan, SilverSeek.com

Bitcoin Hyper-Deflation, Gold and Silver Report
By: Keith Weiner

Cryptojunkies: Beware the Ides of December
By: Michael Ballanger

This Week in Bitcoin: The IRS Targets Coinbase, Venezuela to Mint Its Own Cryptocurrency
By: Frank Holmes

Buy Gold, Silver Time After Speculators Reduce Longs and Banks Reduce Shorts
By: GoldCore

Gold Seeker Closing Report: Gold and Silver Fall While Stocks Edge Higher
By: Chris Mullen, Gold Seeker Report

 
Search

GoldSeek Web

 
Gold "Supported by Physical Buying" as Chinese Demand Forecast to Double by 2020



By: Adrian Ash, BullionVault


-- Posted Monday, 29 March 2010 | Digg This ArticleDigg It! | | Source: GoldSeek.com

London Gold Market Report

 

THE PRICE OF WHOLESALE gold bullion ticked higher against the US Dollar on Monday morning, rising together with the Euro and most world stock markets after "Chinese buying emerged" according to one Hong Kong dealer.

"The downside on gold prices is limited," said another – Fortis Nederland's head of commodity derivatives, Wallace Ng – to Bloomberg.

"I don't see gold trading below $1100 an ounce for now."

China's economic growth over the last 3 months likely hit 12% per year, according to two senior Beijing economists separately quoted by the Chinese press today.

Yu Bin at the State Council Development Research Center and Fan Jianping, senior economist at the State Information Center, both now forecast a dip in GDP growth as the central bank looks to curb inflation and debt.

Longer-term, "Gold consumption in China will continue to catch up with the rest of the world...and has the potential to double during the next decade," reckons former Credit Suisse analyst Eily Ong, now investment research manager at the mining-backed World Gold Council, in a new report.

"China has recently provided strong support for global gold demand during a period of weakness in other parts of the world. The combination of a healthy outlook for demand and relatively inelastic supply in China may be seen as perfect conditions for gold."

Rising 85% by weight since 2004, annual gold demand from Chinese households has more than quadrupled in Dollar terms.

Based on World Bank estimates of China's household savings rate – probably worth some $660bn last year – the proportion of private savings spent on gold investment and jewelry each year has almost doubled since the market was deregulated in 2001, says analysis by BullionVault, reaching 2.1% in 2009.

"The real value of gold for investors lies in the reliable diversification it provides and its low correlation with other assets," says Ong.

"Gold also consistently delivers a lower average volatility than most mainstream assets and commodities."

Silver prices also rose to a 6-session high against the Dollar on Monday morning in London, rising to $17.27 an ounce to add almost 3.0% from last Wednesday's low.

Over on the currency markets, meantime, the Euro and British Pound slipped back vs. the Dollar, ticking lower from 4-day highs at $1.35 and $1.50 respectively.

That buoyed the gold price north of €824 and £741 per ounce.

New Eurozone data today showed economic, consumer and industrial confidence all improving across the 16-nation currency union in March, but remaining depressed.

Here in the UK, non-financial businesses repaid almost £2 billion of their outstanding debt last month, the Bank of England reported, taking their outstanding debt to a 17-month low.

"Evidence of QE's effectiveness remains somewhat elusive," notes Richard McGuire, fixed income strategist at RBC Capital Markets.

Over the 12 months since the Bank of England's £200bn quantitative easing program began, borrowing by UK businesses outside the financial sector has fallen by £16.5bn, a drop equal to some 1.2% of gross domestic product.

"Physical demand for gold has supported the metal despite substantial Dollar strength," notes this morning's Commodities Daily from Standard Bank's London office.

Over on New York's Comex derivatives market, in contrast, bullish speculation by non-industry players continued to fall last week, new data showed after Friday's close.

Net speculative length – meaning the number of bullish minus bearish bets held by large and small speculative traders – fell below 750 tonnes equivalent for only the second time since Sept. '09.

As a proportion of all open gold futures and options contracts, the net long position held by hedge funds and other large speculators fell to 11-month low beneath 30%.

Analyzing the latest US derivatives data for gold, silver, platinum and palladium, "[It] seems to indicate that gold is still the least vulnerable to a sharp correction," says Standard Bank.

 

Adrian Ash

 

Formerly City correspondent for The Daily Reckoning in London and head of editorial at the UK's leading financial advisory for private investors, Adrian Ash is the editor of Gold News and head of research at BullionVault – winner of the Queen's Award for Enterprise Innovation, 2009 – where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

 

(c) BullionVault 2010

 

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


-- Posted Monday, 29 March 2010 | Digg This Article | Source: GoldSeek.com





 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2017



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.