Tag Archives: bullion

bullion

Chinese Consumerism Props Up Gold Prices

Despite fears of commodities losing value this year and investor hesitation in buying into gold, the precious metal climbed to its highest level in three weeks on increased consumption in Asia, despite the lack of investing demand.

Last year, gold dropped 28 percent of its values, the most since 1981, as investors fled to rising equities and dampened inflation for store value. The Fed’s highly publicised talks regarding economic stimulus and last month’s decision to cut funds for bond purchasing from $85 billion to $75 billion played a big role in the market sentiment towards gold.

Despite investors’ hesitation, however, Chinese consumers are certainly taking advantage of the lower prices as shipments of gold to China more that doubled in the first eleven months of the year, as data from the Hong Kong Census and Statistics Department. The title of the world’s biggest bullion consumer has probably shifted from India to China, the World Gold Council said.

SPDR Gold Trust, the biggest gold-backed exchange-traded product, saw its holding deplete to 794.62 tons yesterday, the lowest since January 2009, according to reports published on the fund’s website. A sum of 552.6 tons was taken out in the past year.

Other metals have been showing upward movement as well. Silver for immediate delivery rose 0.2 percent, its fourth consecutive day of advancement. Platinum also climbed 0.2 percent, while Palladium fell 0.1 percent.

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GoldCoins

Gold Pares Weekly Loss But Set For Annual Drop

The Federal Reserve’s decision earlier this week to start cutting back on stimulus helped gold gain some of the ground it lost after closing at its lowest level since 2010. Accoridng to Goldman Sachs Group Inc., however, bullion’s downwards movement has not come to an end as the precious metal is set for its biggest annual decline since 1981.

The turbulent economic conditions around the globe that marked 2013 have diminished investors faith in gold as a store of value, sending it towards its first annual decline since 2000. On 18th December, the Fed decided to finally begin reducing its bond-buying programme from $85 billion to $75 billion. The decision pushed U.S. equities to record highs, while exchange-traded products that are backed by gold lost about $73 billion this year and mining companies dropped at least $26 billion.

Goldman’s head of commodities research in New York, Jeffrey Currie, said that “gold is now likely to grind lower throughout 2014. Much of the expected price decline has been priced in as opposed to a more gentle process as the Fed backs away from QE. When the gold market sees these events, it usually tries to price it in immediately.”

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GoldBalance

Gold Breaks Its Fall Despite Forecasts of Stimulus Tapering

Speculation that the Federal Reserve may decrease its economic stimulus as early as next week didn’t seem to be doing gold any favours; however, the safe-heaven’s decline halted after just two days as the five-month low prices may be luring investors back towards it.

Bullion to be delivered immediately increased as much as 0.4 percent in Singapore today, while yesterday prices had fallen 2.1 percent, the most since 2nd December. When data last week came in positive for U.S. payrolls in November, gold touched $1,210.61 on 6th December, the lowest since 5th July.

The precious metal is set for its first annual lost in 13 years with a decline of 27 percent this year as investors anticipate Fed cuts on improving U.S. economy. The FOMC meeting is scheduled for next week, 17-18 December, and 34 percent of the economist that participated in a Bloomberg survey expect the cuts to begin next month. On a poll conducted on the 8th November, only 17 percent thought so.

Gold for February delivery increased 0.3 percent after its greatest fall in 10 weeks yesterday. The volume of trading remained at similar levels to the 100-day average

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Gold charioteer

Gold Travels East on Lower-Price Path

Overall international demand for gold dropped 21 percent in the third quarters as both investors and central banks show reluctance in buying the metal, according to the World Gold Council.

The council announced in a report today that demand around the globe plunged to 868.5 metric tons, compared to 1,101.4 ton last year. Investors purchased 118.7 tons from ETFs and similar products, while central bank purchases fell 17 percent.

April of this year saw the gold market move into a bear, casing gold prices to drop 24 percent with inflations doubting the precious metal’s value as equity prices rallied against falling inflation levels.

If we isolate the Easter market, however, a different image emerges as gold demand jumped in China, India, and the Middle East in the 12 months to September against decreasing European sales. The World Gold Council mentioned that the difference in markets highlights the movement of the global bullion market form west to east.

Demand for jewellery, bars and coins jumped 30 percent in China to 996.3 metric tons, while in India gold experienced a 24 percent increase reaching 977.6 tons. On the contrary, demand in Europe slid 11 percent during the same period with marked drops in the U.K., France, and Switzerland. Moreover, the share of Global sales corresponding to Asia and the Middle East rallied to 68 percent from previously 65 percent over the 12 months, while the share from the European market fell to 8.3 percent from 11 percent.

With gold set for an annual decline. the first since 2000, bullion travels eastward attracting Asian investors with its lower prices as the Federal Reserve considers curtailing its financial stimulus amidst signs of an economic recovery for the U.S.

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melted gold

Gold Slides for Fifth Day; Gold Bug Expects Reversal Soon

After its speedy rise at the end of the U.S. government shutdown and signs of a struggling American economy, gold recorded its fifth consecutive day of rapid decline, heading for the longest slump in three months, after data showed U.S. manufacturing activity climbed to a two-year high, spurring speculation that the Federal Reserve will after all begin paring stimulus sooner that previously forecast.

Bullion for immediate delivery fell as much as 0.3 percent to $1,312.24 an ounce. Further drop today would mark the longer losing run since the five days leading to 1st August.

Gold plummeted 22 percent in 2013 as investors sold off the safe-haven commodity as prospects of an economic recovery appeared on the horizon. Although the Fed maintained its $85 billion monthly bond-buying programme last week, it also noted signs of underlying strength” in the world’s largest economy that seems to have renewed investors trust in the USD.

But not everyone agrees that investors should so quickly shun the precious metal. Peter Schiff, nicknamed gold bug, predicts gold will maintain its 21 percent year-to-date fall and even surge 52 percent to hit a record $2,000 an ounce within a year. Schiff stated that he’s waiting for a dollar crash, one much worse than any thus-far experienced, that will benefit gold. Despite the gold bug’s accurate predictions in 2006 about the burst of the housing bubble and bank bankruptcy, many critics laugh at his recent predictions seeing no signs for such economic reversal.

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Gold production

Barrick Gold to Sell Shares for Debt Reduction

Barrick Gold Corp. (ABX), the world’s largest gold producer, plans to sell shares to raise about $3.45 billion in efforts to reduce its debt, which has increased this year as the price of gold declined.

The Toronto-based company announced today that it agreed to sell 163.5 million shares for $18.35 each in so-called bought deal that’s underwritten by a group led by RBC Capital Markets, Barclays Plc and GMP Securities LP. The company also said that there’s an over-allotment option for the sale of 24.5 million shares.

As the price of gold has declined 21 percent this year, the company found itself under immense pressure. Thus Chief Executive Officer Jamie Sokalsky has considered many ways to raise capital including a strategic equity investment, a sale of a stake in its copper business and selling a stale in its $8.5 billion Pascua-Lama project to a state-backed Chinese investor. Barrick announced earlier today that it will postpone constructions at Pascua-Lama to conserve cash.

The announcement of the share sale came yesterday after the close of regular trading in New York yesterday, where Barrick plunged 5.4 percent to $18.34 at 6 p.m.
Barrick expects to use $2.6 billion from the stock sale to repurchase bonds. It will use $1.1 billion to buy back $700 million of 1.75 percent notes due 2014 and $350 million of 4.875 percent notes, also due in 2014.

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bullion

Bullion Declining As Fed Hints At Recovery

Gold declined for a third day, trimming its monthly gain, as the U.S. Federal Reserve spoke of willingness to scale back its monetary stimulus, should economy improve. Silver platinum, and palladium have also experienced drops.

Gold for immediate delivery fell as much as 0.7 percent to $1,335.30 an ounce. Prices, however, are still up 0.5 percent this month after the 16-day U.S. shutdown hurt the country’s economy and investors anticipate that the Fed won’t slow down the pace of asset purchases until next year.

More specifically the central bank announced yesterday that it will maintain its $85 billion monthly bond purchases, while noting that it could see signs of “underlying strength” in the economy.

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