Gold Spot $/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.

Europe
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.

NEWS
Gold edges lower from 7-week high; Greek debt talks eyed
http://economictimes.indiatimes.com/markets/commodities/gold-edges-lower-from-7-week-high-greek-debt-talks-eyed/articleshow/11684608.cms

Spring Festival sparks a 'gold rush' in China
http://www.chinadaily.com.cn/bizchina/2012-01/30/content_14504507.htm

Gold up 10% on rumours that India, China will pay in bullion for Iran oil
http://www.emirates247.com/markets/gold/gold-up-10-on-rumours-that-india-china-will-pay-in-bullion-for-iran-oil-2012-01-30-1.440209

'India resolute to buy Iran's oil'
http://tehrantimes.com/economy-and-business/94876-india-resolute-to-buy-irans-oil

Hedgies, Managed Futures Funds Raise Stakes In Gold & Silver
http://blogs.barrons.com/focusonfunds/2012/01/27/hedgies-managed-futures-traders-raise-long-positions-in-gold-silver/?mod=BOLBlog

CME adds Deutsche Bank to gold custodian providers
http://www.marketwatch.com/story/cme-adds-deutsche-bank-to-gold-custodian-providers-2012-01-27-18040

COMMENTARY
Gold Is The Hottest Currency In The World
http://www.forbes.com/sites/robertlenzner/2012/01/28/gold-is-the-hottest-currency-in-the-world/?partner=yahootix

Silver Singularity Is Near
http://community.nasdaq.com/News/2012-01/the-silver-singularity-is-near.aspx?storyid=117209 

Fiscal Treaty Could Trigger "Debt Explosion"
http://www.ft.com/intl/cms/s/0/e15ba792-4830-11e1-b1b4-00144feabdc0.html#axzz1kvgRkwbY

Russell - Gold Threatening Dollar’s Reserve Currency Status
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/1/28_Russell_-_Gold_Threatening_Dollars_Reserve_Currency_Status.html

Celente - War, Bank Runs, Riots & Gold Going Mainstream
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/1/27_Celente_-_War,_Bank_Runs,_Riots_%26_Gold_Going_Mainstream.html

Iran Blinks, Delays Vote On European Crude Export Halt Even As US Escalates Military Developments Against Country
http://www.zerohedge.com/news/iran-blinks-delays-vote-european-crude-export-halt-even-us-escalates-military-developments-agai 

Davos Post Mortem
http://www.zerohedge.com/news/davos-post-mortem 

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-- Posted Monday, 30 January 2012 | Digg This Article