{"id":43617,"date":"2013-10-30T10:21:37","date_gmt":"2013-10-30T14:21:37","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=43617"},"modified":"2013-10-30T10:21:37","modified_gmt":"2013-10-30T14:21:37","slug":"weak-us-data-see-precious-metals-rise-ugly-truth-fed-policy","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/10\/30\/weak-us-data-see-precious-metals-rise-ugly-truth-fed-policy\/","title":{"rendered":"Weak US Data See Precious Metals Rise on “Ugly Truth” of Fed Policy"},"content":{"rendered":"

London Gold Market Report<\/strong>
\nfrom Adrian Ash<\/strong>
\nBullionVault<\/span><\/a><\/strong>
\nWeds 30 Oct 09:55 EST<\/strong><\/p>\n

BOTH gold and silver rose Wednesday lunchtime in London, as the day’s widely-expected “no change” decision from the US Federal Reserve was preceded by weak US data.<\/p>\n

\u00a0The private-sector ADP Payrolls report said the US economy added only 130,000 jobs<\/a> last month, rather than the 150,000 analysts forecast.<\/p>\n

\u00a0US inflation also lagged consensus forecasts, as did Germany’s consumer price index, which showed a 0.2% fall this month from September.<\/p>\n

Gold added 0.5% to $1358 per ounce. Silver prices gained 1.4% to break above $23 per ounce for the first time in 6 weeks.<\/p>\n

“We are concerned that the ugly truth is that money printing remains the major prop keeping the global economy from toppling over,” says John Chatfeild-Roberts, part of the multi-manager Merlin team at UK fund giant Jupiter.<\/p>\n

\u00a0Underperforming their benchmarks in 2013 thanks to the falling gold price, Merlin’s managers warn that quantitative easing “[may] be enough to tide us over until the buttressing effect of sustainable economic growth emerges.<\/p>\n

\u00a0“[But] the alternative scenario helps to explain why gold remains of value<\/a> in what appears to be a precarious future.”<\/p>\n

\u00a0“The global economy,” writes Marcus Grubb, director at market-development organization the World Gold Council in its latest Gold Investor report<\/a>, “has come a long way since the 2008-2009 financial crisis and its aftermath.”<\/p>\n

\u00a0But with growth weak and financial markets volatile, investors “[should] apply the single most important lesson learned during the Great Recession: risk management matters.”<\/p>\n

\u00a0Advising that gold remains integral to long-term investor holdings, Grubb’s team go on to explain “why a 2% to 10% allocation to gold in well-diversified portfolios makes sense.”<\/p>\n

\u00a0Over in Asia on Wednesday, Hong Kong-based jewelry retailer Chow Tai Fook \u2013 one of China’s largest gold chains, with 1,850 outlets \u2013 said today it expects to report strong growth in half-year sales, sending the company’s stock 3% higher.<\/p>\n

\u00a0Shanghai gold contracts meantime reversed Tuesday’s $3.50 discount to London prices, ending the day with a $1.50 per ounce premium to that global benchmark.<\/p>\n

\u00a0More widely in Asia however, “Physical demand in this part of the world has shown some signs of weakening recently,” says a note from AnandRathi Commodities Ltd. in Mumbai.<\/p>\n

\u00a0Indian premiums on investment gold bars<\/a>, over and above London benchmarks, today crashed to $70 per ounce<\/a> “due to weak demand for gold on the domestic market” according to one Mumbai dealer quoted by the Business Standard.<\/p>\n

\u00a0But other sources continued to put the Mumbai premium at $115 per ounce, and “Still gold is not available,” Reuters today quotes All India Gems & Jewellery Trade director Bachhraj Bamalwa.<\/p>\n

\u00a0Two days before Dhanteras marks the start of Diwali, the peak gold-buying festival in the world’s No.1 consumer nation, Bamalwa put the premium to London benchmarks at $120-130 per ounce.<\/p>\n

\u00a0Thanks to 2013’s good monsoon and harvest, “Farmers will have additional disposable income,” explained the World Gold Council’s P.R. Somasundaram, managing director India, earlier this month.<\/p>\n

\u00a0“As an Indian, the first thing comes in our mind after food is to accumulate some gold. Based on that fact, we estimate a robust quarter for gold this year.”<\/p>\n

\u00a02013’s bumper harvest means wheat exports from India \u2013 already the world’s No.2 supplier \u2013 will rise by one third to new record highs, says Singapore trader Agrocorp.<\/p>\n

\u00a0India’s food ministry may this week cut the minimum price<\/a> needed to make wheat exports, says Bloomberg, because the country’s own state reserves are now double what it needs.<\/p>\n

\u00a0High-spending Indian jewelry buyers are switching however to platinum and diamond pieces, according to a survey<\/a> from the Associated Chambers of Commerce & Industry.<\/p>\n

More than three-quarters of the 350 jewelers surveyed by AssoCham said they have increased their platinum and diamond work, to meet consumer demand hurt by this year’s record-high gold prices and now the shortage of gold forced by the Indian government’s gold imports ban<\/a>.<\/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

 <\/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 fully allocated bullion already vaulted in your choice of London, New York, Singapore, Toronto or Zurich 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

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

London Gold Market Report from Adrian Ash BullionVault Weds 30 Oct 09:55 EST BOTH gold and silver rose Wednesday lunchtime in London, as the day’s widely-expected “no change” decision from the US Federal Reserve was preceded by weak US data. \u00a0The private-sector ADP Payrolls report said the US economy added only 130,000 jobs last month, … <\/p>\n

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