Gold - one part of the world is buying, and one is selling.
23-Jan-2011The Financial Times puts it in a nutshell:
Traders said that gold sales to China had jumped 30-50 per cent since Christmas, driving the cost of kilo bars in Hong Kong more than $3 per ounce above the market price of gold, the highest level since 2008 and an indication of the tightness in the physical market.
“Physical demand has rocketed in China at the start of the year,” said Walter de Wet, head of commodities research at Standard Bank.
The wave of Asian buying has propped up gold prices at about $1,360 a Troy ounce, traders and analysts said.
The metal’s price has dropped 4.6 per cent from its December record price of $1,430.95, trading at $1,364.10 on Friday, as optimism about prospects for US growth has led western investors to turn their attention away from gold to other commodities and equities. “We have a balanced situation where one part of the world is buying and the other part is selling,” said a senior trader in Hong Kong. Chinese and Indian investors are increasingly turning to gold to protect savings against sharply rising food prices .
Investor buying of gold bars jumped 80 per cent to a record 144 tonnes last year in India, according to GFMS, the precious metals consultancy, while across east Asia bar hoarding was up 125 per cent at a 15-year high."
Meanwhile did you see these figures out this week as reported in the 5 Minute Forecast?
While the markets tread water, the Russians and Chinese are snapping up metal…
- Chinese silver imports quadrupled last year, according to figures from Mitsui. Net imports of less than 900,000 kilograms in 2009 surged to nearly 3.5 million in 2010. China, long a net exporter of silver, became a net importer in 2007
- Russia’s central bank plans to keep loading up on gold. In 2010, Russia grew its gold reserve 23.9%, to 790 metric tons. Now the deputy head of the Central Bank of Russia has announced plans to add to that stash at a pace of 100 metric tons a year.
I only need to ask one question - Which side of this trade are you on?
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