Industry News

  • GOLD PRICES whipped violently with all financial markets Thursday as the European Central Bank announced yet more aggressive monetary stimulus only to see the single currency jump to 3-week highs against the Dollar as stock markets sank.
     
    Germany's Dax index turned a near-3% gain into a worse-than-2% loss for the day, while US and UK government bond prices fell sharply as Eurozone bonds ticked higher.
     
    Crude oil dropped over 2%. New York equity markets opened sharply lower.
     
    "This package isn't an overreaction to oil prices," ECB president Mario Draghi told his scheduled press conference in Frankfurt.
     
    "It's an adequate reaction to weakening growth prospects."
     
    Gold priced in Dollars initially dropped to 1-week lows beneath $1240 per ounce, a 13-month high when first reached a month ago.
     
    But then surging with silver – which jumped to recover all this week's 30 cent loss to trade back at $15.50 – gold bullion rose to $1267 per ounce after Draghi spoke, trading some 0.7% higher from last Friday's close.
     
    The ECB's decision today cut its main refinancing rate for Eurosystem banks to 0.00%, cut the deposit rate on excess reserves further below zero to minus 0.40%, expanded its QE money creation scheme by one-third to €80 billion per month, widened the range of assets it can buy with that money to include non-financial corporate bonds (albeit not starting until late in Q2), and announced 4 new "targeted" long-term refinancing operations – to be known as TLTRO II – under which banks may borrow up to 30% of the value of loans already made at zero cost for 4 years.
     
    Some analysts claimed disappointment that the negative deposit rate – intended to stop banks holding cash at the ECB instead of lending it – didn't become "tiered" to try and defend the Eurozone banking sector's profitability.
     
    Others said Draghi's mistake was to suggest in his press conference that the deposit rate will not be cut again after today, "signalling a possible end to what is essentially an open-ended program," in the words of a spread-betting analyst at CMC Markets.
     
    But forecasting consumer-price inflation of just 0.1% for 2016, and cutting his economic growth forecast to 1.4%, Draghi said the ECB understand "the need for further monetary stimulus...without undue delay."
     
    "You see [devaluations] almost everywhere except for the United States," said US presidential hopeful Donald Trump – now expected by two-in-three chief financial officers at US corporations to become the Republican nominee for November's election according to a new poll – to CNBC today.
     
    "We do nothing about it. They're taking advantage of our country [and] taking our jobs," Trump added, calling Beijing "the grandmaster of all" in terms of currency manipulation.
     
    Initially dropping, the Euro however jumped during Draghi's press conference, reaching its highest level since mid-February near $1.12 on the FX market.
     
    That squashed the gold price in Euros to 1-week lows beneath €1135 per ounce.
     
    Earlier Russia's third largest gold miner Polyus – which was bought and de-listed from the London stock market as the metal's price hit 6-year lows in December – had said it hedged around 8% of the next 4 years' output on February's jump in prices.
  • GOLD TRADING recovered a $5 per ounce drop in London trade lunchtime Wednesday, with bullion standing at $1255 as Western stock markets rose again ahead of tomorrow's negative-interest rate and QE decision from the European Central Bank.
     
    Brent crude oil crept back above $40 per barrel for the first time in 3 months, but iron ore dumped half of Monday's record 19% one-day jump.
     
    Despite expectations that the ECB will extend NIRP still further on Thursday, government bond prices fell across the board, pushing 10-year German Bund yields higher from last week's 10-month low beneath 0.11%.
     
    The Euro slipped below $1.10, keeping the gold price for single-currency investors trading in line with last week's finish at €1144 per ounce – a 13-month high when first reached in February. 
     
    Bullion priced in Dollars held 2% below last week's 13-month high near $1280.
     
    "Gold has finally succumbed to some profit-taking," says a trading note from London brokers Marex Spectron.
     
    "The trend of the first couple of months seems to be over."
     
    After gold trading "pierced through the multi-year [down] channel at $1264, a monthly close above this [level] will be of prime importance," says a technical analysis from French investment bank and bullion market maker Societe Generale, calling Friday's peak of $1280 and then Monday's $1277 "a probable double top" – classically a bearish pattern, which a "move below $1245 will confirm."
     
    But after gold's underlying price direction saw a "golden cross" on analysts' charts at the end of February, inviting momentum traders to buy the uptrend, the metal's 50-day moving average "has [now] crossed the 100- and 200-day MA from below," notes Canadian bank and London market-maker Scotia Mocatta, "and the 100-day MA is set to pierce the 200-day MA as well."
     
    On gold's global benchmark, the 3pm LBMA price set by auction between the largest bullion traders, the 50-day average rose above both the 100- and 200-day averages at the end of February 2016 – a position seen briefly in the spring and then late-summer of 2014.
     
    For a decade starting June 2001, gold's 50-day moving average held above the 100-DMA and 200-DMA on 73% of all trading sessions.
     
    The 100-DMA only lagged the 200-DMA on 306 of the 2,704 trading days starting July 2001.
    Chart of gold price's 50-day moving average, 100-dma and 200-dma
     
    "We think the [moving averages] should gradually catch up to the current price level and lend some support," says Scotia.
     
    Gold trading on Shanghai's government-approved bourse meantime held firm Wednesday at almost twice average levels, but it still shrank to only half of Monday's new record, when 87 tonnes-worth of the main Au(T+D) contract changed hands.
     
    Compared to the world benchmark of London settlement, Shanghai gold prices today rose to a premium of $2.50 per ounce – back in line with the average incentive offered to new imports – as the Yuan reached a 3-week high versus the Dollar on the FX market.
  • GOLD PRICES will hold 18% stronger in 2016 than previously thought according to last year's most accurate forecaster, with weakening global growth and the move to negative interest rates in central-bank policy (NIRP) driving ETF and other gold investment.
     
    Gold edged higher Tuesday morning to come within $2 of Friday's 13-month high near $1280 per ounce as world stock markets fell following much weaker-than-expected trade data from China.
     
    China's imports shrank almost 14% year-on-year in February, but exports crashed 25%, crushing the country's trade surplus from a record $63.3 billion to $32.6bn.
     
    The Chinese New Year period, however, typically shows a sharp drop in China's trade surplus, giving the lowest monthly figure in each of the last 10 years.
     
    Major government bonds jumped in price, pushing yields sharply lower and taking 10-year Japanese rates to minus 0.09%.
     
    The Dollar held tight around $1.10 per Euro on the FX market. Thursday's meeting of the European Central Bank is now widely expected to see it extend NIRP still further on its deposit rate.
     
    "On the back of difficult and uncertain global markets, gold prices have risen by almost 20% so far this year," notes Bernard Dahdah, precious metals specialist at French investment and bullion bank Natixis, the best gold price forecaster of 2015, and formerly the second-most bearish amongst 31 professional analysts predicting how gold will perform in 2016.
     
    Winner of last year's London Bullion Market Association forecast survey after predicting 2015's average gold price down to the dollar, Dahdah previously said gold would fall below $1000 by the end of this month, and average just $970 for 2016 as a whole.
     
    Now however, and "in light of [the bank's] updated view on global markets," Dahdah has raised Natixis' full-year forecast by 18% to $1150 per ounce.
     
    "Higher gold prices this year," he explains, "have been mainly driven by the announcement of negative interest rates some key central banks, the collapse in the Chinese stock market, and finally expectations that the Fed will raise rates at a slower than expected pace."
     
    As recently as 8 January, Dahdah said that "the main theme affecting gold this year [would] not be a Chinese slowdown but the expected...interest rate hikes by the Fed."
     
    Natixis' previous 2016 outlook – beaten as a bearish call only by fellow French bank BNP Paribas' forecast average of $960 – also said outflows from physically-backed ETF investment trusts would also continue "as higher-yielding investments and a stronger Dollar [became] more attractive to investors."
     
    Unchanged Monday, the quantity of bullion needed to back shares in the giant SPDR Gold Trust (NYSEArca:GLD) has now swelled by 150 tonnes since New Year, reversing all of 2014 and 2015's outflows in just 10 weeks.
     
    One of the GLD's competitor ETFs, the Blackrock iShares Gold Trust (NYSEArca:IAU), said Monday it sold 25 million shares between mid-February and last week without registering them with US regulators the SEC.
     
    Describing the compliance failure as "inadvertent", asset-management giant Blackrock said it may have to buy back those shares – transferred at a value of $296 million – and those stock-buyers affected "may have the right to collect damages" plus interest.
     
    Last Friday's price high of $1280 now means gold has exceeeded 24 of the 31 analysts' peak forecasts for 2016 in this year's LBMA competition.
     
    With gold rising from $1072 at New Year to $1277.50 at the daily London benchmark auction, none of the 31 has yet seen gold touch their lowest price forecast.
     
    Gold's daily average-to-date stands at $1161, unchanged from 2015's overall figure and more than 5% above the 31 gold analysts' average full-year 2016 forecast.
  • GOLD PRICES traded just below $1270 per ounce Monday lunchtime in London, writes Steffen Grosshauser at BullionVault, extending last week's gain to push the metal 20% higher for 2016 to date as Eurozone stock markets slipped ahead of the European Central Bank's next decision on negative interest rates, due later this week.
     
    The Dollar pushed towards higher to $1.0940 per Euro on the FX market – three cents stronger than February's 4-month low – after news that German factory orders decreased for the second time in a row in January.
     
    The Sentix survey of Eurozone investor sentiment gave its worst reading since the Swiss Franc de-pegging turmoil of January 2015.
     
    The European Central Bank will announce its latest QE bond buying and negative interest-rate policy (NIRP) on Thursday.
     
    Iron ore prices meantime leapt a record 19% on Monday after a senior member of China's politburo said at the weekend that government borrowing should be increased to boost spending and economic growth.
     
    "Gold's rally has been impressive despite bearish factors including weak physical demand, creeping US bond yields, stronger equities and strong US employment data that lends support for tighter monetary policy," said investment and bullion bank HSBC in a report Friday, watching gold zoom within 35 cents of $1280 per ounce.
     
    US bond prices slipped again Monday, pushing 10-year yields towards 1-month highs at 1.90%.
     
    Energy commodities rose as iron jumped, with Brent crude oil gaining 1% to $39.10 per barrel, and now surging by more than a third from January's new 12-year lows.
     
    Silver prices outpaced gold on Monday, extending last week's 5% gain to reach $15.67 per ounce –now up nearly 14% since mid-January.
     
    Platinum's discount to gold remained at $280 however, while copper slipped 1% after rising sharply last week.
     
    Strong investment money flows into exchange-traded trust funds backed by gold are "providing support to the market," said Australian bank ANZ on Monday, "boosted [by] the adoption of negative interest rates by some central banks, weaker US Dollar and persistent uncertainty in the financial markets."
     
    Latest positioning data from the Comex gold futures and options market show "short positions continue to decline," ANZ goes on. "But at these high prices restrained physical demand may begin to temper the rally and we could be in for some profit taking or liquidation."
    Chart of 'Managed Money' bull and bear positions in Comex gold futures & options via CFTC data
     
    With gold having broken through what it calls resistance at $1250, "It will be interesting to see in the next set of data out this Friday whether this triggered renewed buying or additional profit taking," says Canada-based investment and bullion bank Scotiabank in its latest technical analysis.
     
    "Our next target level for gold is $1308 (the January 2015 high), while the near-term support stands at $1246" on Scotia's charts.
  • GOLD PRICES set new 13-month highs near $1280 per ounce Friday in London, swiftly recovering a $25 drop after new US data showed stronger-than-expected jobs growth in February.
     
    Non-farm payrolls expanded by 242,000 on the Department of Labor's estimate, almost 30% ahead of consensus forecasts.
     
    Average US earnings slipped 0.1% last month, the jobs data said, while the average working week declined to 34.4 hours, the shortest since February 2014.
     
    The US Dollar briefly spiked on the FX market, but then fell to new 1-week lows at $1.10 per Euro, while New York's stock markets hit 2-month highs.
     
    Industrial commodities extended their rally, and silver jumped above $15.60 per ounce, gaining more than 6% from last weekend.
     
    Gold prices traded 4.3% higher from last Friday's finish.
     
    "NIRP policy ex-US and stickiness in US inflation could push US real bond yields lower," says a note from US investment bank J.P.Morgan's global strategist Jan Loeys, referring to Europe and Japan's negative interest-rate policies and pointing to the rate of interest paid by Treasury bonds after accounting for inflation.
     
    "That could further support gold prices, as gold's best performance has historically occurred during a low and falling US real interest-rate environment, with monthly returns averaging 1.4% compared to the long-run average of 0.4%."
     
    Ahead of tomorrow's 7th anniversary of UK interest rates being cut to a record-low of 0.5%, gold priced in British Pounds today touched £900 per ounce – a price first seen in November 2010, last seen in August 2013, and still some 25% below the peak of September 2011.
     
    Then the world's largest exchange-traded trust fund by value at that time, the SPDR Gold Trust (NYSEArca:GLD) swelled in size yet again Thursday, with demand for its shares taking the quantity of gold needed to back their value up to 793 tonnes.
     
    The GLD has now recovered more than one-fifth of its 53% shrinkage from 2012's peak gold holding to December 2015's eight-year low.
     
    Adding 150 tonnes since New Year alone, the GLD hasn't grown this fast since global stock markets bottomed – and central-bank QE began – at the depths of the crash following Lehman Brothers' collapse.
    Chart of the SPDR Gold Trust (NYSEArca:GLD) holdings, 9-week change
     
    "Generally I agree with the benefits of owning gold," says one bullion-bank trader in a note, "[especially given] the current market mindset and rising uncertainties.
     
    "I would just remind buyers to beware, the upside is probably a long and winding road. A healthy entry point seems necessary."
     
    The largest silver ETF, the iShares Trust product (NYSEArca:SLV), also grew Thursday, needing its largest 1-day inflow of metal to back the value of its shares for at least 18 months.
     
    Adding 169 tonnes, that took the SLV's silver backing to a 3-month high of 9,946 tonnes, 
     
    Shares in Canadian asset manager Sprott's closed-end silver trust (NYSEArca:PSLV) ended Thursday at a premium of 3.2% to spot prices, the most expensive gap for buyers of the stock since February 2015.
     
    The PSLV's premium to the value of silver it owns peaked above 34% in January 2012, falling to a discount of 1% in mid-2015.
     
    US Treasury bond prices meantime fell after Friday's US jobs news, pushing 10-year yields to 1-month highs at 1.86% per year.
     
    Betting on the likelihood of a June rate rise from the US Federal Reserve rose marginally, putting the odds at 36% against 33% yesterday.
     
    Odds on a hike at the Fed's March meeting, however, held below 2%.
  • GOLD PRICES edged higher against a weakening US Dollar in Asian and London hours on Thursday, rising 1.8% from last week's finish as world stock markets held unchanged in quiet trade.
     
    Major government bonds held also flat overall, as did commodities.
     
    Silver edged up towards $15 per ounce for the third day this week.
     
    Gold's rally, says a note from Dutch bank ABN Amro, has "pushed aside headwinds such as...a higher probability of a Fed rate hike in June, and a rebound in the US Dollar, highlighting the strong upward momentum in gold prices."
     
    Gold prices first reached today's US Dollar peak of $1245 per ounce 3 weeks ago, trading in a tightening range since then.
     
    ABN that day called gold's price movement a "change in trend", switching its outlook to bullish the following week having been "long-standing bears".
     
    "The momentum for gold ETFs continues to underpin the spot price," says refining and finance group MKS, "[and] with fresh inflows yesterday...the influx [is] not looking to slow anytime soon."
     
    Rising for the 3rd session running on Wednesday, shares in bullion-tracker the SPDR Gold Trust (NYSEArca:GLD) saw investor demand expand once more, taking the quantity of gold needed to back the ETF's stock to the largest level since September 2014 at 788 tonnes – a 5-year low when reached in April that year.
    Chart of SPDR Gold Trust (NYSEArca:GLD) tonnes
     
    The largest silver-backed trust fund also saw demand for its stock grow Wednesday, but against falling prices, with silver recording a 1-month low at Wednesday's benchmarking auction in London of $14.82 per ounce.
     
    The quantity of bullion needed to back the iShares' Silver Trust (NYSEArca:SLV) yesterday reached its largest level in 8 weeks at 9,777 tonnes.
     
    Meantime in India – the largest household-consumer market for gold – jewelry and bullion outlets "are shuttered," reports Bloomberg from Mumbai, with retailers and manufacturers striking in protest at Monday's announcement of gold tax and duty hikes in the 2016 Budget.
     
    A nation-wide strike in 2012 "was successful", Bloomberg says, in preventing the then-government from imposing an excise duty at the point of sale.
     
    But the current BJP administration of Narendra Modi – elected in 2014 on a pro-business platform – has now imposed a 1% levy, and "[won't] be in a hurry to roll back the excise tax as it will be blocking a source of revenue," the newswire quotes brokerage Inditrade's head of FX and commodities Harish Galipelli in Hyderabad.
     
    Indian gold prices last week fell as low as a $50 per ounce discount to international quotes, thanks to a glut of imported metal and a lack of demand ahead of the Budget, which had been expected to reduce duty, not raise it.
     
    Gold prices in China meantime reversed most of yesterday's 0.9% drop on the Shanghai Gold Exchange, nearing 12-month highs against the Yuan but cutting the premium above international Dollar quotes below 30 cents per ounce – just one-eighth of the incentive typically offered to Chinese importers.
     
    Trading volumes in Shanghai's main gold contract slipped to a 6-session low, but held two-thirds stronger than the daily average of the last 18 months.
     
    Gold priced in Euros today held around €1140 per ounce – the new 10-month high reached on Monday – as the single currency edged higher versus the Dollar following stronger-than-expected retail sales data for the 19-nation monetary union plus a rise in jobless benefit claims reported by the US.
  • GOLD PRICES held firm against a rallying US Dollar in London on Wednesday, trading above $1230 per ounce as Western stock markets failed to extend a strong surge in Asian equities overnight.
     
    After new data Tuesday said US manufacturing recovered a little in February from its worst showing since 2009, private-sector payroll figures from ADP Inc. reported a jump of 214,000 – well ahead of economists' consensus forecasts.
     
    The US government's estimate of non-farm payrolls growth in February will be released Friday.
     
    Commodities paused after the recent 30% jump from 13-year lows in crude oil, and silver prices also held flat below $14.90 per ounce, while major government bond prices retreated, nudging 10-year US Treasury yields near 1-month highs at 1.85%.
     
    "If the world economy and financial system is indeed heading for the rocks," reckons London-based Capital Economics, "an extended period of looser monetary policy and strong demand for safe havens should boost the precious metal further."
     
    The odds of a US Federal Reserve rate-rise to 0.75% at the mid-March meeting now stand below 1-in-50, according to futures trading, down from 1-in-6 a month ago.
     
    "However, we suspect that a new factor – the return of inflation – will also be increasingly important [and] any correction in the gold price will be short-lived," the consultancy concludes, repeating its end-2016 forecast of $1250 per ounce.
     
    Wholesale bullion trading "could continue to see some profit-taking and the market slip back," says a note from brokers Marex Spectron in London.
     
    But "consolidation remains underway," counters a technical analysis of price charts from Canadian bank and London bullion market maker Scotiabank.
     
    Consolidation should be seen "in a positive light," agrees the latest Bullion Weekly Technicals from German financial services group Commerzbank, repeating that February "saw the market break through the 2014-2016 downtrend at $1200...
     
    "[Now] we are seeing the market hold sideways below $1263.50" – the early February high for Comex gold futures contracts.
     
    Meantime in India – the world's largest consumer gold market – "most jewelry showrooms remained closed" on Wednesday reports Rediff, as the industry protested this week's new 2016 Budget tax hikes on gold imports and sales
     
    "The proposed excise duty will lead to a drastic fall in business," says Surinder Kumar Jain, vice-president of the All India Sarafa Association, which had previously supported the BJP government's policy of trying to curb gold imports by offering deposit and bond schemes – schemes further favored with the exemption of capital gains tax in Monday's Budget.
     
    "Scrap imports from Asia [to Italy and Swiss refiners] have boomed," says the latest gold note from precious-metals analysts Metals Focus, reporting that 2015's decline on falling prices has "all changed".
     
    "Domestic volumes responded strongly to prices breaching €36 per gram" in late February say refining industry contacts, Metals Focus reports, pointing to €1120 per ounce – a price last seen by European scrap dealers and refiners in April last year when gold failed to recover its sudden spike of last New Year 2015.
  • GOLD BULLION came within $6 per ounce of last week's 12-month US Dollar high in London on Tuesday, setting a fresh 13-month high for Eurozone investors as world stockmarkets rose again and crude oil extended its recovery to 33% from last month's 13-year lows.
     
    As gold priced in Dollars touched $1247, bullion in Euro terms set its highest spot price since late-January 2015 above €1147.
     
    Germany's Dax index of Frankfurt stocks meantime recovered start-February's level, some 10% above last month's 18-month lows, after new data said manufacturing activity in the 19-nation Eurozone is holding firmer than expected, while unemployment has fallen to 4-year lows.
     
    China's manufacturing PMI, in contrast, gave the weakest reading since late 2011, with both the NBS and Caixin surveys pointing to contraction.
     
    Turnover in the Shanghai Gold Exchange's main contract held at more than twice the last 18 months' average, but slipped to two-thirds of last Thursday's new all-time record with contracts worth some 45 tonnes of bullion changing hands.
     
    "The lowest Chinese manufacturing PMI since Nov 2011...saw the metal drop sharply," says a note from Swiss refiners MKS, but "it was very short lived...with bargain hunters quick to step in."
     
    The Yuan held firm on the FX market after Monday's cut to Chinese banks' reserve requirement ratios – the fifth such cut in a year, aimed at spurring new lending – capping the Shanghai gold premium at 50 cents per ounce above London quotes.
     
    One jewelry trade body in India – the world's No.1 consumer market for gold – today called an indefinite strike in protest at the new 1% excise, announced in yesterday's 2016 Budget and added to the 10% import duty which the industry had hoped would be cut.
     
    Japan's government meantime borrowed 10-year money today at a negative rate of interest for the first time ever, with a sale of new bonds paying buyers -0.024% annually if held to redemption in 2026.
     
    Major government bond prices worldwide eased back in price as equities rose, nudging 10-year US Treasury yields up to 1.75%.
     
    The first time US yields fell to this level, gold traded at record highs above $1900 per ounce.
     
    Chart of gold prices versus 10-year US Treasury yields
     
    "We believe that the recent sharp rally in the gold price is a selling opportunity," says a note from commodity strategist Jesper Dannesboe at French investment and London bullion market-maker Societe Generale, calling the move "unsustainable".
     
    "The gold price appears to be discounting no further Fed rate hikes this year and very little tightening next year [but] our economists expect the US economy to withstand the slowdown in emerging markets."
     
    Commodity prices meantime extended their rally on Tuesday, taking Brent crude oil back to $37 per barrel – fully one third above January's new 13-year lows.
     
    Silver prices also rose, but failed to hold above $15 per ounce – a level reached on the way up in late 2007, but lost in late 2014 and again a year later.
  • GOLD PRICES cut into overnight gains lunchtime Monday in London, writes Steffen Grosshauser at BullionVault, but kept February on track for the sharpest month-on-month rise in Dollar terms since January 2012 as world stockmarkets fell following the G20 meeting of political and central-bank leaders from the world’s biggest economies in Shanghai.
     
    European shares retreated from a three-week high after the G20 meeting failed to propose any coordinated stimulus, merely agreeing at the weekend to use "all policy tools – monetary, fiscal and structural – individually and collectively" to support growth.
     
    "Markets looked at the G20 meeting and found it a tad disappointing, what they had been looking for was a unification of the G20 to do something as a force," said Peter Lowman, CIO of Investment Quorum, a London-based wealth management firm.
     
    Having been sold lower on Friday's US economic data, gold prices were lifted by Chinese traders Monday morning, says the Asian desk of Swiss refiner and finance group MKS.
     
    Over in India – the world's largest consumer market – local gold prices surged 1.4% against the Ruppee on Monday after Finance Minister Arun Jaitley surprised the market by maintaining gold import duty at the current record level of 10%, despite pleas for a reduction from the jewelry industry.
     
    Holding around $1230 per ounce for London settlement, wholesale gold prices have risen more than 10% in February, the largest monthly jump in more than 4 years.
     
    World stock markets, in contrast, headed for their third monthly drop in succession.
     
    "Gold has been the biggest story of this year," says Dan Denbow, portfolio manager at the USAA Precious Metals & Minerals Fund.
     
    "Last summer, people were calling it a barbaric relic, and nobody could care less about gold. Now, it’s slowly generating more and more buying."
     
    New data released Friday showed  speculators in Comex gold futures and options growing their bullish bets and slashing their bearish bets as a group over the week-ending last Tuesday.
     
    That took the "net spec long" position to its second largest since November 2012.
     Chart of Comex gold speculators' futures and options position
    Global holdings in gold-backed trust funds have meantime risen 15% so far in 2016, recovering from the 6-year lows hit as prices fell late in 2015 with the largest quarterly inflows since 2010.
     
    Silver followed gold prices and rose to $14.80 per ounce on Monday morning, after it dropped to a 3-week low of $14.69 last Friday. 
     
    However, "the picture certainly looks less rosy for silver, as it is currently sitting at the top end of the falling wedge that it had broken out from two weeks ago," wrote bullion bank Scotia Mocatta in a technical analysis after Friday's close.
     
    "Should silver drift lower and fall back into the wedge next week, we think it could break silver's uptrend and also cast a bad omen for gold."
     
    The Japanese Yen – often seen as a "risk off" asset – was meantime set for its biggest monthly gain since 2008, while China's Yuan fell Monday for the seventh day in a row.
     
    Brent crude oil remained around $32.50 per barrel after it rallied last week on expectations that top producers would cut their output.
     
    Oil prices have now fallen around 70% from their mid-2014 high.
  • GOLD BULLION held above $1230 per ounce in Asian and London trade Friday morning, on track to reverse most of last week's 0.9% drop as European stockmarkets followed China higher.
     
    Commodity prices rallied for a second day as major government bond prices eased back, but silver headed for its second weekly fall in a row at $15.13 per ounce.
     
    Priced in the US Dollar, gold now stands 18% higher from December's 6-year lows, gaining more against all other major currencies except the Japanese Yen and the Euro.
     
    Bullion priced in Sterling has gained 27% since then, and it has reversed all of the 2013 price crash against the currencies of 8 from the largest 10 gold-mining nations worldwide, including No.2 Australia.
     
     
    Even against the fast-rising Yen gold has risen 10% since New Year, with a 14% rise versus the single currency Euro.
     
    "It's time to buy gold," says one report of German financial services group Deutsche Bank's latest view, adding that it sees "rising stresses in the global financial system.
     
    "Buying some gold as 'insurance' is warranted," says Deutsche, which quit the wholesale bullion business in 2014 amid accusations of price rigging at the benchmark London Fix – accusations now dismissed by German financial regulator BaFin.
     
    Celebrity trader Pete Narajan yesterday bought shares in the Market Vectors Gold Miners ETF (NYSEArca:GDX) says CNBC, where he co-presents the Half-Time Report.
     
    Launched a decade ago, the GDX has now risen 55% in the last 5 weeks, rallying off fresh all-time lows to reach its highest price in more than 8 months.
     
    A broader rally in mining shares helped European stock markets touch 3-week highs Friday morning, newswires report.
     
    Gold-related investment funds this week saw their biggest cash inflows since 2009, according to data from Bank of America Merrill Lynch. 
     
    The CME futures exchange yesterday raised the downpayment asked of speculative traders to $4,950 per 100-ounce contract – equal to 4 cents on the Dollar, and now raising the initial margin on these leveraged derivatives some 23% above end-2015's six-year low.
     
    Options contracts on those Comex gold futures have given "the biggest bang for the buck" in 2016, says Reuters, with bullish calls betting that gold will hit $1300 per ounce by April rising 1343% since New Year.
     
    "The price for the $1400 strike option has risen 667%."
     
    Wholesale traders in the Middle and Far East, in contrast, "are mostly sellers as gold in local currencies is sky high," says one London bullion bank's sales desk in a note.
     
    But while "capping gold's upside [that is] not disrupting the momentum. Gold rocks."
     
    The rally since New Year is "just pure risk and fear," Bloomberg quotes Wayne Gordon, executive director for commodities and forex at Swiss bank UBS's wealth management division.
     
    "People are unduly worried."
     
    Beijing's politburo has "room" to support the Chinese economy if needed, said People's Bank of China chief Zhou Xiaochuan overnight at a conference for G20 financial leaders in Shanghai, but "the direction [to reform and rebalance] is not changed" and the PBoC will maintain "prudent monetary policy."
     
    Bank of England chief Mark Carney meantime warned the G20 meeting that negative interest rates – now applied by the Swiss, Swedish, Eurozone and Japanese central banks – are a "zero-sum game" for global growth, threatening a "beggar-thy-neighbor" currency war of competitive devaluation to try and boost export sales.
  • GOLD TRADING held wholesale prices above $1230 per ounce in Asia and London on Thursday morning, with volumes in China's bullion market setting a new record as the Shanghai stock market closed sharply lower but European equities rallied.
     
    With gold prices trading 16% higher against both the US Dollar and Chinese Yuan since 1st January, China's main share index tday sank 6.4%, its worst 1-day in a month, while commodity prices gave back a third of Wednesday's late recovery.
     
    Gold trading volumes in Shanghai today jumped to a new all-time record, with Dollar-equivalent prices in the world's largest mining producer and importer moving above London quotes for the first time this week, offering a gross margin of $1.30 per ounce on new shipments – barely half the 18-month average.
     
    Data released overnight showed gold imports to China through Hong Kong sank as prices rose in January, falling 85% from December to the lowest level since 2011 according to Bloomberg data, despite the approach of the key Lunar New Year shopping season.
     
    Some CNY18 billion-worth of the Shanghai Gold Exchange's main Au(T+D) contract changed hands on Thursday, trading some 70 tonnes of bullion.
     
    Until Thursday, "The SGE had remained in discount for the entire week," notes the Asian trading desk of Swiss refinery and finance group MKS, "and it seemed like some Asian investors were happy to capitalise on [this week's] higher prices."
     
    Trading in the New York-based Comex's gold call options meantime – a highly leveraged bet that prices will rise – has jumped in February to its highest daily average since prices peaked above $1900 per ounce in September 2011, the Wall Street Journal notes in a chart.
     
    "It shows how bullish people are on gold," the WSJ quotes one derivatives strategist at a broker-dealer.
     
    The world's largest exchange-traded trust fund at its 2011 peak by value,  the SPDR Gold Trust (NYSEArca:GLD) has now grown 18% by shares outstanding since New Year, needing an extra 118 tonnes to back its value – the sharpest 8-week inflow since July 2010, when the Greek debt crisis first began making headlines worldwide.
     
    "The move in gold," reckons Swiss bank Credit Suisse's global head of FX strategy Shahab Jalinoos, speaking to Bloomberg, "captures the idea that interest rates are going to be very low in all the major countries, including now the United States, which is a big change from the end of last year."
     
    "China's interest in buying gold from Hong Kong cooled a lot last month," the newswire also quotes Shanghai analyst Wang Rong at Guotai & Junan Futures Co., "because of [high prices due to] exchange rate factors.
     
    "Purchases in December were so high that they probably anticipated demand in January."
  • GOLD BULLION jumped even as the US Dollar rose Wednesday, reaching new multi-month highs against the Euro, Sterling and Swiss Franc as Western stock markets sank again with crude oil prices.
     
    US oil contracts reversed the week's earlier gain, whipping more than 3% for the 21st session out of just 36 so far in 2016.
     
    Gold priced in Dollars touched $1251 per ounce in the wholesale bullion market, just $10 below this month's spike to 1-year highs.
     
    Gold bullion meantime set new 10-month highs in the Euro above €1135, and shot within £2.50 of £900 per ounce against the British Pound as the UK currency slumped to new 7-year lows amid the Brexit debate.
     
    That level was first seen in November 2010, some 10 months before the current all-time high of £1195, and last seen in September 2013.
     
    "Would we like higher gold price? Yes," says USAA Precious Metals & Minerals Fund assistant vice-president Dan Denbow.
     
     
    "You've got the physical story," says investment, retail and bullion bank HSBC's head of FX strategy Daragh Maher, referring to what his colleague James Steel believes to be growing Asian demand, "and now you've got the risk-off story" in financial assets.
     
    "Gold doesn't yield. Who cares? Nor does Germany."
     
    German 10-year Bund yields offered new buyers just 0.17% per annum Wednesday lunchtime in Frankfurt as prices rose again.
     
    Swiss 10-year yields meantime sank to new all-time lows of minus 0.4% per annum.
     
    "[There's] a resurgence of bullish sentiment," say another bullion bank's analysts, but with prices jumping so sharply from late 2015's new 6-year lows so far in 2016, "buyers and sellers [are] fighting fiercely for control."
     
    Over in India – world No.1 gold consumer market – "Discounts in the physical market have been larger than the duty cut expectations," writes fund manager Chirag Mehta of Quantum AMC in the Economic Times, referring to anticipation that next Monday's government Budget will reduce import tariffs of gold bullion from the current 10%, but also the $50 per ounce discounts to world prices being offered by retail dealers thanks to a stockpile glut and weak demand. 
     
    Looking to tap trading in the currency of China, the world's No.1 gold miner and importer, Hong Kong Exchanges & Clearing – which owns the London Metals Exchange, where Europe's last major "open outcry" market was recently moved to new facilities – said Tuesday it plans to launch Yuan futures against a range of other currencies, plus a Yuan-denominated gold contract, later in 2016.
     
    "The cluster of all these currency instruments hopefully will create an eco system for China to say there is an offshore market that you can trade," Bloomberg quotes HKEX chief executive Charles Li.
     
    Prices on the mainland's Shanghai Gold Exchange today rose another 0.3% against the Yuan by the close of Chinese trade, but the key contract finished at a discount of 75 cents per ounce to London quotes.
     
    That gap is typically a premium, averaging $2.50 per ounce over the last 18 months and directly incentivizing new imports of gold to the world's second-largest economy.
     
    Trading volume in the much-trumpeted "international" Shangahi gold contract iAu9999 – launched in late 2014 – today equaled just 0.0005% of the main T+D contract, having collapsed after briefly eclipsing the SGE's key onshore product in Spring 2015.
  • GOLD PRICE losses of 1.7% from yesterday were reversed in Asian and London trade Tuesday, taking the metal back above $1220 per ounce as world stock markets reversed Monday's rally, as did crude oil.
     
    The British Pound slipped again near 7-year lows on the currency market as CEOs and directors from 34 of the largest 100 companies listed on the London Stock Exchange called for UK voters to stay in the EU, avoiding Brexit.
     
    The LBMA gold price today set a new 13-month high for UK traders at the morning auction, fixing above £863.46 per ounce – just 2 pence shy of January 2015's then 16-month peak.
     
    "If you think the Brexit risk is not such a 'tail-risk'," says one bullion bank's salesdesk, using a term for low probability events, "then it may make sense to add diversification to a balanced portfolio...despite the current perception of rich prices."
     
    For Dollar gold prices, "2015-2016 resistance line should now offer support circa $1197," says the latest Bullion Weekly Technicals from Commerzbank's chart analyst Karen Jones.
     
    "Gold defended its territory yesterday despite rising stock markets and a firmer US Dollar," adds the German financial services group's commodities team.
     
    "We still maintain our view that gold needs to be traded inversely against both US stocks and oil," says Ed Meir at US brokerage INTL FCStone, "as these two complexes seem to be the dominant variables."
     
    The quantity of gold needed to back shares in the SPDR Gold Trust (NYSEArca:GLD) rose yet again Monday, reaching an 11-month high of 752 tonnes – some 45% below end-2012's peak – but marking only the 6th addition so far this year on a day when gold prices fell.
     
    The opposite – of rising prices seeing an outflow from the GLD – has only happened once, on 6 January.
     
    February's surge in world gold prices – the strongest since August 2011 on a daily average basis – has badly dented imports to world No.1 consumer market India, Reuters quotes "sources", perhaps knocking inflows two-thirds below January's level as local retailers struggle to offload inventory even at $50 per ounce discounts to world prices.
     
    The world's larget minerals business, BHP Billiton today slashed its interim dividend to shareholders by 75% after reporting its first half-annual loss in 16 years, predicting still "weaker prices and high volatility" to come for iron, copper and oil.
     
    South Africa's 3rd largest gold producer, Harmony (JSE:HAR) today said it's locking in the current record-high price of bullion in Rand terms on one-third of this year's expected output, hedging its currency risk against the US Dollar to cover $400 million of sales.
  • GOLD PRICES sank 2% on Monday from last week's close, dipping near $1200 per ounce as crude oil stabilized, world stock markets rose, and the US Dollar surged on the currency markets thanks to a plunge in the British Pound ahead of the UK's Brexit vote on EU membership, now scheduled for 3 months' time.
     
    "Uncertainty over the result of the 'Brexit' referendum on June 23rd could see further losses in Sterling," notes Jonathan Butler in London for Japanese conglomerate Mitsubishi, "which could help strengthen the Dollar and keep USD-denominated precious metal prices on the defensive."
     
    Gold priced in British Pounds today slipped but then rallied back to £860 per ounce, its closing level from Friday and the fastest 7-week gain at 20% so far in 2016 since the peak of the financial crisis amid English rioting in August 2011. 
     
    "Today sees stocks sharply higher," says David Govett at London brokers Marex Spectron, "[with] oil above $30, the Dollar up and guess what? Gold is down $22.
     
    "I reiterate, gold is following other markets...Attempting to predict where gold will go on its own merits is pointless, despite some people's slavish devotion to technicals and fundamentals."
     
    Friday's technical analysis of gold price charts from Canadian bullion bank Scotia Mocatta called last week's "slightly lower close at $1231...further support to our view that gold indeed broke out the falling wedge formation that had kept the metal in a downward trend since mid-2013.
     
    "Should gold surpass our near-term target of $1305," says Scotia – pointing to the January 2015 high in Dollar terms – we expect the metal to close in on its 200-week moving average, currently at $1344."
     
    Looking at external factors, "Expectations surrounding interest rate hikes in the US and interest rate reductions in Japan and Europe have on net been positive for gold," says French investment and bullion bank Societe Generale's analyst Robin Bhar.
     
    "Recent fund managers’ surveys show investors want capital preservation, as evidenced by the preference for cash, bonds, gold and defensive stock sectors such as telecoms."
     
    Japan's policy of negative interest rates on central bank deposits has "sparked a public outcry," reports the Wall Street Journal, as "lawmakers say it victimizes consumers and sends a message of despair."
     
    Friday saw yet another net inflow of gold bullion needed to back shares in giant ETF the SPDR Gold Trust (NYSEArca:GLD), taking the fund's holdings to a 9-month high of 713 tonnes.
     
    Latest data released by US regulator the CFTC meantime showed bullish betting on Comex gold futures and options rising once more in the week-ending last Tuesday, but conviction remaining far below historic averages.
     
    Measuring the number of bullish against bearish bets held by all non-industry players, the ratio last week rose to its highest level since October at 2.9.
     
    The 20-year average, in contrast, sits above 20 bullish contracts for every 1 bearish bet.
     
    Silver betting, on the CFTC data, has become much more heated, with the 'Managed Money' category of traders holding a larger number of bullish contracts only 10 times in the last decade, 5 of those since the 2013 price crash.
     
    Silver prices today fell through the $15 level for the first time in almost 2 weeks, sinking 1.7% at the start of London trade before recovering to $15.15 per ounce – some 9% higher for 2016 to date.
     
    But that still left the Gold/Silver Ratio of the two precious metals' relative prices at a 7-year high above 80 ounces of silver per 1 ounce of gold.
  • GOLD TRADING in London saw prices rally but fail to reach yesterday's 1-week high at $1240 per ounce against a rising US Dollar on Friday, while Western stock markets fell yet again with commodities as the European Union failed to find common ground on its migrant crisis or the looming Brexit referendum in the UK. 
     
    Continuing talks with EU counterparts in Brussels, UK prime minister David Cameron said there was "progress" but "still no deal" he can put the British people in a referendum on Brexit from the economic union, perhaps as soon as this June.
     
    Heading for its first weekly drop in five, the gold price slipped back to $1223 – down 1.2% from last Friday's finish – as New York trading began.
     
    Gold trading has seen "an explosion of activity" in 2016 thanks to "collapsing real [interest] rates, the spread of central-bank negative deposit rates, and financial market instability," says Chinese-owned investment and bullion bank ICBC Standard Bank's Tom Kendall.
     
    Shanghai's stock market slipped Friday, but closed the first trading week of the new Year of the Monkey some 3.5% higher.
     
    Crude oil however reversed another 2% of this week's sharp bounce, trading back down towards $30 per barrel of WTI, while European stock markets fell over 0.5%, with Germany's Dax index dropping for the 22nd out of 35 sessions in 2016 to date.
     
    Wholesale gold trading prices against the Euro jumped overnight to 10-month highs at €1117 per ounce.
     
    Gold priced in British Pounds also rose, heading for its 7th consecutive weekly gain above £860 per ounce.
     
    "The EU's clearly difficult negotiations with Great Britain over concessions to the UK are no doubt playing a role," says the commodities team at German financial group Commerzbank.
     
    "If British Prime Minister Cameron's demands are not met, this could lead in a worst-case scenario to Great Britain leaving the EU (Brexit)."
     
    Looking at the policy of negative interest rates now applied to banking reserves held at the ECB, Bank of Japan and Swedish Riksbank, "Leave a million dollars with a bank, and in a year, you get only something like $990,000 back," Bloomberg News today quotes Swiss money manager and Asia-based finance author Marc Faber, publisher of the Gloom, Boom & Doom Report.
     
    "I would rather want to own some solid currency, in other words gold."
     
    "Even if gold's rally proves only a temporary phenomenon," writes US financial group BNY Mellon's chief strategist Simon Derrick, "it still speaks a great deal about how fragile investor faith in central banks has become."
     
    The giant SPDR Gold Trust (NYSEArca:GLD) grew again on Thursday, taking the inflow of bullion needed to back its shares so far this year to 71.3 tonnes – the heaviest inflow over 32 trading days since September 2012.
     
    That took the GLD's total holdings up to 713 tonnes, a 6-year low when first reached at the end of 2014 but now recovering some 13% from last December's new 7-year low.
     
    "Asian physical demand [in contrast] has been notable by its absence," Kendall at ICBC Standard Bank goes on, and so "$1225 feels rich right now.
     
    Call skew – meaning the higher prices being paid for bullish than bearish derivatives bets – "looks excessive," the note says, "given the weakness of physical demand.
     
    "The floor price for gold has probably risen and the bear is back in hibernation but it is way too soon to be talking about a new bull market."
  • GOLD INVESTING prices held above $1200 per ounce Thursday morning as European stockmarket rose but London share prices fell amid the start of UK negotiations with the EU to avoid 'Brexit', and the US Dollar rose to 2-week highs against the single Euro currency.
     
    UK prime minister David Cameron was due to meet EU head Jean-Claude Juncker in Brussels to discuss amends to Britain's terms of membership.
     
    Senior figures in the ruling Conservative government fear "turmoil" in Europe, says the Financial Times, if UK voters do choose to exit in the referendum promised by end-2017, and now likely this June.
     
    Gold priced in Pounds slipped Thursday below £840 per ounce, cutting investing gains in Sterling terms to 16.7% so far in 2016.
     
    Yuan gold prices meantime held steady in Shanghai, and moved to a small premium above global Dollar-price quotes but on the lowest trading volume since China returned from its week-long New Year's holidays on Monday.
     
    "There is [now] a sense of fragility," says one bullion bank's sales desk, "and gold is being kept afloat only by ETF demand, which continues pouring in – albeit at a slower pace.
     
    "It seems like investors are now loaded with gold."
     
    Investor demand for the SPDR Gold Trust (NYSEArca:GLD) held steady on Wednesday, with the quantity of gold bullion backing the ETF unchanged at 710 tonnes – a 7-month high, but still almost half the amount needed at the GLD's peak of end-2012.
     
    Yesterday's 1-week low in the silver price, in contrast, saw investor demand for the iShares Silver Trust (NYSEArca:SLV) retreat for the first time since last Wednesday, shrinking the quantity of bullion needed to back the ETF's shares in issue by 0.4% to 9,672 tonnes – a 3.5-year low when first reached late last month.
     
    Silver prices moved in a tight 10-cent range in London on Thursday, holding more than 4% below last week's sudden 4-month high at $15.95 per ounce.
     
    "Safe-haven demand appears to be where people are focused," Bloomberg quotes Jacob Klein, CEO of Australian gold miner Evolution (ASX:CAH) – which today reported record half-year output up 71% – "and that [signals] a loss of faith in central banks being able to manage through this period."
     
    "[Gold investing is] certainly getting more attention from people who have generally been bears over the past few years."
     
    Negative interest rates are "a dangerous experiment" warn analysts at US investment bank Morgan Stanley, pointing to a likely 5-10% erosion of Eurozone banking sector profits as a result of the sub-zero rates now being imposed on commercial deposits at the European Central Bank.
     
    "Having been long-standing gold bears we have now turned bullish," said Dutch bank ABN Amro's precious and FX analyst Georgette Boele in a note Wednesday.
     
    "The change in our macro, central banks and FX views [mean] we expect gold prices to rally to $1300 per ounce."
     
    Now averaging $1130 per ounce in 2016 to date, the gold price is currently 2.5% ahead of the average 2016 forecast from professional analysts competing in this year's survey by the London Bullion Market Association.
     
    The 2016 peak price forecast by 24 of those 31 analysts has already been beaten by last Thursday's sudden 12-month high at $1261.
     
    Evolution's share price today slipped 4.5% following its July-December 2015 results, but held more than 125% higher from this time last year.
     
    Australia's gold mining sector as a whole edged higher, pushing its rally from late 2014's lows to almost 95%.
     
     
    Also helped by falling costs thanks to local currency weakness against the US Dollar, South Africa's JSE Gold Index of mining stocks has now risen 150% from last August's 14-year bottom.
  • GOLD BULLION dipped below $1200 per ounce for the second day running in Asian trade Wednesday, with dealers reporting weak demand from major consumer nation India ahead of this month's government Budget, before rallying to $1207 by lunchtime in London.
     
    Western stock markets jumped 2%, crude oil rallied another 3%, and the US Dollar touched near-2 week highs on the currency market.
     
    With China's busiest single period of household gold demand now finished with last week's Lunar New Year holidays, bullion today rallied 1.0% on the Shanghai Gold Exchange as the Chinese Yuan retreated further from Monday's surge – its fastest 1-day gain since 2005 according to Bloomberg data, spurred by People’s Bank of China chief Zhou Xiaochuan blaming "foreign speculators [for] volatility" in the currency.
     
    A survey of 5,000 adults in the UK by Lloyds Bank's private banking division today said pessimism on share investing was the worst in 3 years last week, while gold became the second "favorite" investment after real estate.
     
    Tuesday saw the number of shares outstanding in the giant SPDR Gold Trust (NYSEArca:GLD) close unchanged from before the President's Day holiday weekend.
     
    Hedge-fund billionaire John Paulson was one of 6 out of the 15 largest GLD shareholders to cut his clients' position in the ETF during the last 3 months of 2015, when gold prices fell to new 6-year lows.
     
    Yesterday's biggest single change in Comex gold options betting for March was a rise in the number of $1180 puts, according to the Reuters news and data agency, giving speculators the change to profit if prices fall below that level before the contracts expire a week today.
     
    Bearish puts, however, still accounted for just 15% of the 5 most widely held March gold options, and just 21% of the April contract's top five bets.
     
    "Physical flows are dead quiet," said one wholesale bullion trading desk this morning.
     
    "Forwards have barely moved on the price jump. No-one's shipping to India in case the government cuts import duty in the Budget."
     
    Forward rates are the incentive offered by lenders to would-be borrowers of gold bullion in London's wholesale market, falling or rising when immediate supply becomes tighter or easier.
     
    India's finance minister Arun Jaitley will present the BJP government's 2016 Budget on Monday 29 February.
     
    Amid a deluge of newspaper, business and analyst opinions calling for special treatment or new programs to boost different parts of the economy, jewelry trade associations the IBJA and GJF have both formally asked for a cut to gold import duty rates.
     
    Currently at 10%, that rate was first imposed by the then-Congress Party government in 2013 to try and stem record-high bullion inflows when precious metal prices crashed, spurring huge consumer demand and pushing the country's balance of payments deficit with the rest of the world to a record 4.8% of GDP.
     
    India's retail gold prices – typically at a premium to international wholesale quotes – sank last week to a discount worth $25 per ounce, the Reuters news-wire says, with some dealers reporting "no buyers" on a $40 discount to Thursday's sudden 12-month high of $1260 for gold priced in Dollars.
     
    Illegal inflows of gold to India – the world's heaviest consumer nation – continue meantime, with "police conducting raids on only 10% of [gold] smugglers and 90 out of every 100 smugglers...walking out from airports and railway stations without any check," The Hindu newspaper today quotes Commissioner S.Khader Rahman of India's Customs Preventive unit.
     
    Unlike the GJF, the IBJA's executive team has said it backs the Finance Ministry's move to make personal tax account declarations mandatory on gold and jewelry purchases below 200,000 Rupees, equal to just less than US$3,000 – and down from the previous PAN gold declaration level of Rs 500,000, equal to some US$7,500.
  • GOLD BULLION rallied 2.0% from an overnight drop to $1190 per ounce in London on Tuesday, rising back to $1215 as European stock markets lost earlier gains.
     
    Commodity markets stalled after Monday's 4.7% bounce on the S&P GSCI index, while the Euro rallied from yesterday's sudden 1-week low to the Dollar.
     
    Shanghai's main gold contract closed Tuesday level with London bullion quotes at $1200 per ounce, as Yuan prices retreated another 0.9% .
     
    "Fears around China, oil and negative interest rates have likely been overstated in the gold price and other financial markets," says US investment bank – and London bullion market maker – Goldman Sachs.
     
    Despite what other analysts call gold's "relentless rally" in 2016 so far, Goldman analysts Jeffrey Currie and Max Layton still target a drop to $1000 within 12 months for gold bullion, telling clients on Monday that they have "nothing to fear but fear itself" – a phrase used in 1933 by Depression-era US president F.D.Roosevelt shortly before he banned the private ownership of bullion, and then raised the official Dollar price of gold, in a bid to boost inflation and curb America's worsening debt-deflation.
     
    "It's time to sell the fear barometer," say the Goldman Sachs analysts, urging clients to sell gold short using derivatives contracts, because "Systemic risks [to financial stability] stemming from the collapse in oil and commodity prices are extremely small."
     
    Betting on a rise in US inflation expectations was one of five "top trades for 2016" which Goldmans had already advised clients to close at a loss before the end of last week, alongside betting on a rally in the US Dollar, outperformance by US banking stocks, and a rise in Italian bond yields.
     
    That left only one "top 2016 trade" still in place, betting on stocks in non-commodity exporting nations against emerging-market banks.
     
    Consumer-price inflation in the UK slowed to 0.3% annually last month, new data showed Tuesday.
     
    Consensus forecasts for US consumer-price data, due Thursday, expect inflation to show a surge to 1.3% per year from December's annual rate of 0.7%.
     
    That would mark the fastest percentage point jump in 1 month since March 2011.
     
     
    Technical analysis from French investment bank and London bullion market maker Societe Generale says the gold price was "clearly overstretched" at last week's high of $1263, "suggesting possibility of a near-term retracement towards $1212/1200...likely to be an important support near term."
     
    "We would expect [the gold] price to ideally stabilise circa $1200/1192," counters Karen Jones' latest weekly technical chart-book for German financial services group Commerzbank, pointing to gold's October high.
     
    "The weekly close above the 2014-2016 downtrend completes a large bullish falling wedge pattern...[with a] key break up point at $1200.
     
    "We are currently viewing this sell off as a ‘return to point of break out’," Jones concludes, again targeting $1450 longer term.
  • GOLD PRICES fell for a second session on Monday morning in London, dropping to $1210 per ounce after Chinese markets reopened following the week-long Lunar New Year holiday and European equities rebounded sharply, writes Steffen Grosshauser at BullionVault.
     
    Coming after the weekly biggest gain in more than seven years, gold prices were set for their first back-to-back loss in a month on Monday.
     
    Shanghai traders today returned to find gold priced in Yuan trading 6.4% higher from before China's New Year holiday.
     
    Heavy trading volumes then saw Shanghai's main gold contract drop 2.3%, with the premium above comparable London quotes – typically around $2.50 per ounce – turning into a discount of 70 cents.
     
    "Gold is lower because of the good bounce in equities and the Chinese selling," the Reuters news-wire quotes a Sydney-based trader.
     
    "There is some profit-taking around but volumes [outside China] haven't been huge."
     
    "If financial markets continue to stabilize, gold is likely to correct further," analysts at global financial services provider and London bullion bank HSBC add.
     
    "The last time gold prices rose more than 10% in a 10-day stretch was during the rally when gold touched all-time highs above $1900," notes Swiss refiner MKS PAMP's Asian trading desk in its market update.
     
    Latest data, released Friday, showed money managers trading Comex gold futures and options doubling their "net bullish" position as a group in the week-ending last Tuesday.
     
    Equivalent to 226 tonnes of bullion, however, that measure of bullish bets minus bearish bets remained below two-thirds of the last 10 years' average.
    Silver prices tracked gold on Monday, halving last week's 5% gain to drop back to $15.30 per ounce. Silver also had 4 consecutive up-weeks and closed last week higher at $15.75 per ounce.
     
    "Support now lies at $15.00," said Friday's technical analysis from bullion bank ScotiaMocatta.
     
    "We would like a weekly close above $16.35 before feeling confident about calling December's $13.65 as the end of the bear move.
     
    Other precious metals meantime rallied as gold and silver fell, with platinum up $6 to $949 per ounce as crude oil steadied above $30 per barrel following Friday's surge.
     
    European stock markets added almost 3% on average, while the single Euro currency extended its retreat from last week's new 4-month highs against the Dollar to nearly 3 cents at $1.1177.
     
    "I don't think we're in the middle of a sustained [gold] bull market," says David Govett, head of precious metals at London-based broker Marex Spectron, speaking to the Financial Times.
     
    "The higher it goes the more it has to run out of steam at some point. It only takes a couple of positive economic figures to switch that mentality around and everyone jumps out of the lifeboat."
  • GOLD PRICES fell for a second session on Monday morning in London, dropping to $1210 per ounce after Chinese markets reopened following the week-long Lunar New Year holiday and European equities rebounded sharply, writes Steffen Grosshauser at BullionVault.
     
    Coming after the weekly biggest gain in more than seven years, gold prices were set for their first back-to-back loss in a month on Monday.
     
    Shanghai traders today returned to find gold priced in Yuan trading 6.4% higher from before China's New Year holiday.
     
    Heavy trading volumes then saw Shanghai's main gold contract drop 2.3%, with the premium above comparable London quotes – typically around $2.50 per ounce – turning into a discount of 70 cents.
     
    "Gold is lower because of the good bounce in equities and the Chinese selling," the Reuters news-wire quotes a Sydney-based trader.
     
    "There is some profit-taking around but volumes [outside China] haven't been huge."
     
    "If financial markets continue to stabilize, gold is likely to correct further," analysts at global financial services provider and London bullion bank HSBC add.
     
    "The last time gold prices rose more than 10% in a 10-day stretch was during the rally when gold touched all-time highs above $1900," notes Swiss refiner MKS PAMP's Asian trading desk in its market update.
     
    Latest data, released Friday, showed money managers trading Comex gold futures and options doubling their "net bullish" position as a group in the week-ending last Tuesday.
     
    Equivalent to 226 tonnes of bullion, however, that measure of bullish bets minus bearish bets remained below two-thirds of the last 10 years' average.
    Silver prices tracked gold on Monday, halving last week's 5% gain to drop back to $15.30 per ounce. Silver also had 4 consecutive up-weeks and closed last week higher at $15.75 per ounce.
     
    "Support now lies at $15.00," said Friday's technical analysis from bullion bank ScotiaMocatta.
     
    "We would like a weekly close above $16.35 before feeling confident about calling December's $13.65 as the end of the bear move.
     
    Other precious metals meantime rallied as gold and silver fell, with platinum up $6 to $949 per ounce as crude oil steadied above $30 per barrel following Friday's surge.
     
    European stock markets added almost 3% on average, while the single Euro currency extended its retreat from last week's new 4-month highs against the Dollar to nearly 3 cents at $1.1177.
     
    "I don't think we're in the middle of a sustained [gold] bull market," says David Govett, head of precious metals at London-based broker Marex Spectron, speaking to the Financial Times.
     
    "The higher it goes the more it has to run out of steam at some point. It only takes a couple of positive economic figures to switch that mentality around and everyone jumps out of the lifeboat."

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