Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
China's Grand Plan to Take Over the World - 19th Nov 19
Interest Rates Heading Zero or Negative to Prop Up Debt Bubble - 19th Nov 19
Plethora of Potential Financial Crisis Triggers - 19th Nov 19
Trade News Still Relevant? - 19th Nov 19
Comments on Catena Media Q3 Report 2019 - 19th Nov 19
Venezuela’s Hyperinflation Drags On For A Near Record—36 Months - 18th Nov 19
Intellectual Property as the New Guild System - 18th Nov 19
Gold Mining Stocks Q3’ 2019 Fundamentals - 18th Nov 19
The Best Way To Play The Coming Gold Boom - 18th Nov 19
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19

Market Oracle FREE Newsletter

$4 Billion Golden Oppoerunity

Silver Beating Gold as Miners De-Hedging positions

Commodities / Gold & Silver 2009 Aug 11, 2009 - 07:06 AM GMT

By: Adrian_Ash

Commodities

GOLD HELD FLAT Tuesday morning in London, adding 0.6% from yesterday's 7-session low as Asian stock markets rose but European shares reversed early gains.

Oil futures were little changed below $71 per barrel despite news that China's crude imports jumped by 18% in July to a new monthly record.


Developed-world government debt rose, meantime, pushing the yield offered to new buyers of 10-year US Treasuries down to 3.76%.

Silver bounced 1.6% from Monday's four-session low at $14.32 an ounce.

"Silver continues to outperform Gold both on the upside and on the downside," says today's Metal Matters from London market-makers Scotia Mocatta.

"Silver is benefitting from both investment demand and anticipation of a pickup in industrial demand," the monthly report says, but de-hedging by Gold Mining companies who'd previously sold their future production forwards on the derivatives market "still provides support" for Bullion.

AngloGold Ashanti, the world's fourth largest gold-miner, took advantage of July's 5% drop in Gold Prices to buy back 43.5 tonnes of the gold it had sold forward, leaving its hedge book at 139 tonnes.

"Official gold sales in 2009 seem set to fall to the lowest level since 1994," Scotia Mocatta goes on, "with net central banks sales likely to be in the order of 140 tonnes this year, down from 246 tonnes in 2008."

The Bullion bank also believes sales of scrap gold fell to 350 tonnes between April and July, down by 40% from the first quarter of 2009. Current scrap supplies are limited, another London dealer confirms, but physical gold buying is also taking its traditional August holiday.

"This month and ahead of the festivals, the real consumers will be Buying Gold," said Haresh Acharya, an Indian bullion dealer at wholesalers Parker Agrochem Exports Ltd in Ahmedabad, Gujurat to Reuters today.

"However there is hardly any demand from northern India because of the below-normal monsoon. If the monsoon fails, the full year will be very bad."

Analysis from Religare Capital Markets in Mumbai challenges this view, however, showing that poor monsoons have less impact on India's traditionally strong autumn gold buying than rural incomes – likely to be boosted by government aid if the harvest is bad – and the recent 3-month stability in Rupee Gold Prices.

"We are not in the 1980s and '70s or '60s when rain played a very important role in our GDP through agri-sector growth," says Religare's president Amitabh Chakraborty, also speaking to Reuters.

Gold imports to India – the world's No.1 gold consumer market – may rise by 15% between July and Jan., says another Mumbai analyst, after falling by one-half in the first six months of the year.

"Gold is currently supported by a weak Rupee," reckons Commerztrend's Gnanasekar Thiagarajan. "Gold may again go up if the Fed indicates inflationary concerns" in tomorrow's US interest-rate decision.

On the data front Tuesday, Germany reported flat consumer prices for July, but deflation in wholesale prices accelerated to 10.6% year-on-year.

The Euro ticked back above $1.4150, holding the Gold Price in Euros just shy of €670 an ounce.

UK investors now Ready to Buy Gold saw the price touch fresh two-week highs above £576 as the Pound stayed below $1.6500.

The Bank of Japan meantime kept its key interest rate at 0.1%, warning that "It may take time for falls in consumer prices to end."

Japan's consumer price index – excluding volatile food prices – showed the fastest drop on record in June, down 1.7% from a year earlier.

Gold priced in Japanese Yen has more than trebled since the Bank of Japan initiated its "zero interest rate policy" to try and combat deflation at the start of this decade.

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at www.BullionVault.com , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2009

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.

Adrian Ash Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules