Today’s AM fix was USD 1,384.50, EUR 1,074.01 and GBP 919.14 per ounce.
Yesterday’s AM fix was USD 1,379.00, EUR 1,067.42 and GBP 913.43 per ounce.
Gold fell $13.70 or 0.98% yesterday to $1,381.00/oz and silver finished down 1.59%.
Gold edged higher today supported by strong physical demand internationally and especially in Asia.
Demand in the physical market continued to hold prices near $1,400/oz as the recent drops in the spot market encourage buyers internationally to accumulate bullion.
Cross Currency Table – (Bloomberg)
The paper gold market remains volatile and is likely to get more volatile but this is not deterring physical buyers and premiums remain strong in most markets.
Premiums in India and Hong Kong have fallen from the very high premiums of recent days but Singapore, Shanghai, Dubai, Turkey and western markets continue to see high premiums.
Overnight the volume for the Shanghai Gold Exchange’s cash contract surged 55% to 15,641 kilograms from a two-week low of 10,094 kilograms on May 27.
The Shanghai Futures Exchange announced yesterday that they will begin after-hours trading for gold and silver futures within one or two months.
In Singapore, gold coins and bars are being sold at high premiums compared to the spot price as there is not enough supply in the market to meet the strong demand.
Reuters quoted one broker who said that most of the bullion dealers in Singapore were sold out of bullion and that “everybody is buying and no one is selling.”
In India, certain states have either seen coin stocks fall to very low levels and others have actually run out of gold coins.
The drop in gold prices in April led to a surge in bargain hunting in India and globally which is continuing with prices below $1,400/oz.
Gold Spot $/oz, Daily, 3 Year – (Bloomberg)
In Hyderabad, a city of nearly 7 million people , gold and jewellery shops in the city have dwindling stocks of gold coins and bars. Some have completely run out of stock of the best-selling gold coins while others are having to ration their remaining stocks.
The gold rush is expected to continue for some time, due to delays in jewellery and coin shops receiving supplies of coins from banks and bullion brokers.
This is creating a delay in the entire supply chain.
The U.S. Mint sales of gold coins were the highest in 3 years after demand surged on the recent price drop.
Yesterday, the U.S. Mint resumed sales of their 1/10th ounce gold coin after the mint ran out of inventory last month and suspended sales amid record demand.
In the U.S., there are difficulties in sourcing British Sovereigns (0.2345 oz), Chinese Pandas (1 oz) and Australian Kangaroos (1 oz) in volume.
The Royal Mint (UK), The Perth Mint in Australia and other mints are seeing record levels of demand.
This morning The World Gold Council confirmed the very strong demand being seen globally and especially in Asia.
Asian gold demand from this April to June will reach a quarterly record as bullion buyers in China, India and the rest of the region take possession of supply freed up by selling from exchange-traded funds (ETFs), the WGC said.
“Asian markets will see record quarterly totals of gold demand in the second quarter of 2013,” WGC Managing Director Marcus Grubb said in a report released this morning.
Gold demand in India, the world’s largest buyer, is heading for a quarterly record after prices fell to a two-year low in April, The World Gold Council said.
“Even if ETF outflows continue in the United States, it is quite likely that the gold previously held in ETFs will find a ready market among Indian, Chinese and Middle Eastern consumers who are taking a long-term view on the prospects for gold.”
A long term view remains vital to protecting and growing wealth today.
It remains prudent to ignore the poorly informed analysis of the speculators who have been responsible for much of the destruction of wealth in recent years.
Few of them predicted this crisis and most do not understand the importance of diversification and the importance of gold as a safe haven asset. Nor do they know that gold remains nearly half its inflation adjusted high of $2,500/oz seen in 1980 (see chart) and the ramifications of that for the gold market in the coming months and years.
Those who continue to focus on gold’s academically and historically proven safe haven qualities as an important diversification will again be rewarded in the coming months.
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