{"id":39784,"date":"2013-07-09T09:17:52","date_gmt":"2013-07-09T13:17:52","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=39784"},"modified":"2013-07-09T09:17:52","modified_gmt":"2013-07-09T13:17:52","slug":"case-for-gold-unchanged-as-asia-buys-western-etfs-fall-to-2010-levels","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/07\/09\/case-for-gold-unchanged-as-asia-buys-western-etfs-fall-to-2010-levels\/","title":{"rendered":"Case for Gold “Unchanged” as Asia Buys, Western ETFs Fall to 2010 Levels"},"content":{"rendered":"

London Gold Market Report<\/strong>
\nfrom Adrian Ash<\/strong>
\nBullionVault<\/strong><\/a>
\nTuesday, 9 July 08:45 EST<\/strong><\/p>\n

The PRICE of gold slipped from 1-week highs at $1260 per ounce lunchtime Tuesday in London, as European stock markets cut earlier gains and commodity prices held flat.<\/p>\n

\u00a0Fresh gold investing demand in Asia was strong overnight, according to dealers.<\/p>\n

\u00a0Traders also cited new Chinese inflation data \u2013 which came in above analyst forecasts for June at 2.7% \u2013 plus “stops being triggered” as gold prices rose through $1240.<\/p>\n

\u00a0“We are now back to the levels of last week,” says broker Marex Spectron, “pre-NFP.”<\/p>\n

\u00a0Friday’s non-farm US payrolls data saw gold drop $20 per ounce \u2013 “a pointless move down to 1210,” says Marex. “Although it gave us the opportunity to buy the dip!”<\/p>\n

\u00a0Despite being “medium-term bearish” overall, “We still believe that an interim low is in place,” says the latest technical analysis from Axel Rudolph at Germany’s Commerzbank.<\/p>\n

\u00a0“A corrective move higher towards the 1321.50 April low is currently underway.”<\/p>\n

\u00a0On a fundamental level however, “No sustainable price recovery is likely” says Rudolph’s colleague Eugen Weinberg at Commerzbank’s commodities team “for as long as ETF outflows continue on this scale.”<\/p>\n

\u00a0Exchange-traded gold trust funds lost another 15 tonnes on Monday as investing positions were reduced again.<\/p>\n

\u00a0That took global\u00a0gold investment<\/a>\u00a0through ETFs below 2,000 tonnes for the first time since May 2010 according to Bloomberg data.<\/p>\n

\u00a0“Money managers are also retreating further from the gold market,” says Weinberg.<\/p>\n

\u00a0Latest data from US regulator the CFTC last night showed speculators in gold futures and options cutting their “net long” investing position as a group to just 108 tonnes equivalent.<\/p>\n

\u00a0Down four-fifths from the start of this year, the net long position of non-industry players in US gold derivatives has now fallen 89% from the record peak of summer 2011.<\/p>\n

\u00a0Gold investing in China in contrast \u2013 now the world’s second-largest consumer market for bullion \u2013 has been strong, market-maker HSBC notes.<\/p>\n

\u00a0“An indicator of good demand from China is bullion\u2019s premium on the Shanghai Gold Exchange,” HSBC said in a note Friday, “which more recently stood at $34\/oz, significantly higher than the $10-25\/oz range seen in May.”<\/p>\n

\u00a0The Shanghai Gold Exchange this week began an overnight trading session, extending trade until 2.30am.<\/p>\n

\u00a0The 2013 price drop has also spurred\u00a0net gold bullion buying by Japanese households<\/a>, according to Tanaka \u2013 the country’s largest chain of bullion retailers \u2013 the first such net addition to private holdings since 2004.<\/p>\n

\u00a0Japan’s gold ETF sector has bucked the global trend too, Bloomberg reports today, with gold investing positions expanding 10% by weight against a 25% drop in Western ETF stocks.<\/p>\n

“A lot of [Western] investors are starting to exit their hedge against unorthodox monetary policy in the US,” the newswire today quotes Dominic Schnider at UBS Wealth Management in Singapore.<\/p>\n

\u00a0“As an insurance asset, gold, which worked out so well for people in the past few years, is not attractive anymore.”<\/p>\n

\u00a0But “policymakers should be cautious in interpreting the plunge in gold prices as a vote of confidence in their performance,” counters academic economist and author Kenneth Rogoff at Project Syndicate.<\/p>\n

\u00a0“The case for or against gold<\/a>\u00a0has not changed all that much since 2010,” Rogoff believes, pointing to when prices were last at this level.<\/p>\n

\u00a0“The real case for [gold investing], then as now, was never a speculative one. Rather, gold is a hedge…a form of insurance against war, financial Armageddon, and wholesale currency debasement.”<\/p>\n

Adrian Ash<\/strong><\/span><\/a><\/p>\n

BullionVault<\/strong><\/span><\/a><\/p>\n

Gold price chart, no delay | Buy gold online<\/strong><\/span><\/a><\/p>\n

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.<\/p>\n

 <\/p>\n

(c) BullionVault 2013<\/p>\n

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 \u2013 and must be verified elsewhere \u2013 should you choose to act on it.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

London Gold Market Report from Adrian Ash BullionVault Tuesday, 9 July 08:45 EST The PRICE of gold slipped from 1-week highs at $1260 per ounce lunchtime Tuesday in London, as European stock markets cut earlier gains and commodity prices held flat. \u00a0Fresh gold investing demand in Asia was strong overnight, according to dealers. \u00a0Traders also … <\/p>\n

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