"A lot of the Chinese were ... taking advantage of prices that have been coming off"
Just when you thought demand for gold couldn't get any more massive in China as it prepares to unthrone India as the world's top bullion consumer, a new report from Hong Kong has set the bar even higher.
"Gold shipments to China from Hong Kong rose in October to the second-highest on record as jewelers and retailers bought the metal to build up inventories ahead of a peak-demand season at the end of the year," Bloomberg reported.
Net imports hit 129.9 metric tons in October, from 109.4 tons in September. That's second only to the all-time high of 130 tons in March. Furthermore, imports have topped 100 tons for
"It's a strong number and it certainly puts China on track to import more than a thousand tons," said Victor Thianpiriya of Australia & New Zealand Banking Group. "You do get the usual seasonal pickup towards the last quarter of the year, but a lot of the Chinese were also taking advantage of prices that have been coming off."
"October was also the beginning of the wedding season, which could have prompted more demand for jewellery," said Chen Min of Jinrui Futures.
If October was any indication of burgeoning demand for gold in China, look out: China and numerous other nations with large Chinese populations (such as Indonesia, Malaysia, and Vietnam) celebrate the Chinese New Year holiday on Jan. 31, 2014. That buildup, of course, will be coinciding with Western demand for gold jewelry for the Christmas holidays. Look for the December and January numbers out of Hong Kong to potentially shock and awe gold market watchers.
More information can be found online at http://www.goldbullionadvisors.com
British currency firm sees "long-term bull trend" resuming in 2014
Gold is headed for a price rebound in 2014, maybe by as much as 40%, ECU Group chief executive Antony John toldFE Trustnet in an interview posted Nov. 25.
The financial markets are peaking and global macroeconomic weakness is likely to re-emerge in 2014, setting the stage for gold's resurgence, he predicted.
"It's a natural hedge against the world situation and we are likely to see a long-term bull trend," he said. "We could see $1,800 [an ounce] in the next 12 months."
China also is key to gold's future, he noted, especially as its emerging middle class continues to grow.
"The rhetoric [of the government] can mean you are going to get volatility, so as China develops, their love affair with gold will increase," he said.
China's plans to increase the renminbi's role as a global currency also makes gold important.
"The Chinese government are continuing to buy huge resources of gold and could be creating their own gold standard for their own currency," he said. "They will say, 'Our currency is backed by physical gold so the rate should naturally be higher.'" h
The eurozone also will re-enter full-blown crisis mode and is likely to have a dampening effect on markets, he predicted.
More information can be found online at http://www.goldbullionadvisors.com
"What we really own gold for is just in case something goes really haywire"
Gold might be down this year, but it's still an important component of Greenlight Capital founder David Einhorn's portfolio. Why? Because of reckless monetary policy from theFederal Reserve, the billionaire tells CNBC in a new interview.
Asked by the talking head whether gold's performance has been a disappointment, he replied: "I don't know that I would agree with the premise about it not working out the way we thought it would. We bought the gold in 2008 when we saw what was going on with the Fed policy.
"This year hasn't been a good year for gold, but other years have been good, and the investment overall so far has been OK for us. But that's not the important thing, because what we really own gold for is just in case something goes really, really haywire. And what I'm thinking about is in terms of mostly the monetary policies but also the fiscal policies that are being run by the big economies. I just heard (Starwood Capital) Barry Sternlicht (speak on CNBC) and he was very critical of quantitative easing and the easing policy. I think I'm much more critical than he is. ... I don't think it's a question of the price of gold; I think it's a question of the wisdom of the policy. And I think it makes sense. It's not like half our portfolio is in gold or anything like that, but I think it makes sense in any portfolio to own some of this. It's very under-owned and it makes sense in case these guys kind of lose control of the switches."
In the same interview at the Robin Hood Investors Conference, he also expounded on the Fed: "I'm not convinced when -- or if -- they'll ever taper," he said. "I don't know. We may go into the next crisis, the next depression/recession rollover, and the next move might be to pour more fuel on the fire. It wouldn't surprise me in the slightest."
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Metal "will remain a favored choice," one expert predicts
"When people finally realize that there's a shortage of gold, the price starts to go up. The most incredible thing to me is that because of all the misinformation out there, China can buy an extra 25% of the gold market over the last two years, and the price goes down. ... It should be substantially higher."-- Eric Sprott of Sprott Asset Management in a Novemberinterview with The Gold Report.
Another day, another upward revision to the estimates of China's gold consumption. Eric Sprott in recent months has been openly questioning the statistics compiled by industry firms such as the World Gold Council and Thomson Reuters GFMS, alleging that they underestimate true demand there.
Now Mineweb's Lawrence Williams has spotlighted the work of Koos Jansen, who "suggests that Chinese gold consumption in the current year will more likely exceed 2,000 tonnes, perhaps as high as 2,200 tonnes which implies a much higher level of imports than the World Gold Council's assumed 1,000-tonne estimate issued far earlier in the year before the continuing high monthly figures for imports through Hong Kong had become fully apparent. ...
"So, how does Jansen arrive at a much higher total estimate? He draws on published figures from the (People's Bank of China), the Shanghai Gold Exchange (SGE), and Swiss gold import and export data to reach his conclusions."
Who's buying all this gold? The Chinese "aunties" are at it again, according to Bloomberg in its Nov. 19 article "Gold No Slam-Dunk Sell in China as Aunties Buy Bullion."
The article profiles Yang Cuiyan, a 41-year-old housekeeper from Anhui province, who traveled 650 miles to Beijing to buy gold. Yang "is one of the legions of middle-aged Chinese women, respectfully referred to as aunties, who bought coins and jewelry this year, bringing support to a market shunned by many professional investors who began doubting the metal as a store of value."
"I don't know anything about the stock market and I don't have enough money to buy property, so I figured gold is the safest choice," she said. "I can put it on when I go back home to show everyone that I'm doing well. ... I don't want to put my money in a bank. I want to keep up with my relatives and friends back home. We all like to compete to see whose necklace is thicker."
China's demand for jewelry, bars, and coins rose 30% to 996.3 tonnes in the 12 months to September, while usage in India gained 24% to 977.6 tonnes, according to the WGC. India was No. 1 in 2012.
"Images in Chinese media of aunties clearing shelves in gold shops after a 14% plunge in prices in two days in April illustrate an appetite for bullion that defies the views of the biggest banks in the West and points to limited investment choices in China," Bloomberg noted.
"In China, you look around and see very few places to put your money," said Duan Shihua, a partner at Shanghai Leading Investment Management Co. "With the share market down and the government nudging people away from real estate, gold will remain a favored choice."
Chinese demand will be a key support for gold going forward. Once the allure of the stock market loses luster in the West and/or monetary velocity from unprecedented central-bank liquidity lights the fuse of inflation, expect a pickup in demand from investors in the U.S., and thus a resumption in the rise of dollar-denominated gold prices.
Furthermore, as China and Singapore grow in stature as gold-trading hubs, the price-setting mechanisms that are currently based in London and New York should give way to increasingly dominant Asian counterparts in cities like Shanghai, and prices will more truly reflect voracious Eastern physical demand and not waning Western gold ETF and futures investment.
More information can be found online at http://www.goldbullionadvisors.com
Avoid ETFs that own unclaimable derivatives of real bullion, he tells USA Watchdog
Gold ultimately is headed to $50,000 an ounce, bullion expertJim Sinclair of JSMineset.com tells Greg Hunter of USA Watchdog in a recent wide-ranging interview on numerous topics of interest to gold buyers.
Those topics include the Federal Reserve's quantitative-easing program, U.S. debt, the dollar's role as a world reserve currency, the Cyprus bail-ins, China and the other BRICS nations, the Singapore Gold Exchange, the stock market, the modern welfare state, and the difference between physical gold and paper gold like ETFs.
"The exchange-traded funds don't necessarily own physical gold," Sinclair notes. "In fact, they own gold in various derivative forms," and the claims on that derivative gold are exponentially higher than the existing physical supply. Once the demand for physical gold outstrips the ability of exchanges like the COMEX and the London Bullion Market Association to make normal deliveries, the price of physical bullion will explode, Sinclair predicts.
"Gold is insurance," Sinclair says. "I think the dollar gets hammered. I think we are headed toward hyperinflation."
Sinclair calls the collapse of Lehman Bros., the TARP bailout, and the 2008 financial crisis "The Great Flushing." We're next headed into what he calls "The Great Leveling," in which the middle class risks being wiped out. That period from 2014 to 2016 will be followed by "The Great Reset," in which the BRICS nations (Brazil, Russia, India, China, and South Africa) force the U.S. dollar off its pedestal as world reserve currency.
How high will gold go? Asked (at 41:15) for his gold prediction, Sinclair says: Gold is "trying to better $1,650, which is the pendulum point for gold. It will better $1,650 and will rise to $2,400, drop, then rise to $3,200 to $3,500 before we go into the Great Reset" before 2016. "I almost embarrassed to say (how high I think gold can go). ... Physical gold emancipated from paper gold, which I believe will happen, will be $50,000 an ounce."
More information can be found online at http://www.goldbullionadvisors.com
London's Telegraph reports on the stunning findings of new report
London's Telegraph newspaper has just reported on an exciting joint study by the Centre for Economics & Business Research and CoinInvestDirect that finds that "the gold price has soared by some 3,500% since 1970."
"This means an investor who spent 27,800 British pounds on gold and retained their investment ever since will today be a millionaire," it noted. "An investor with more modest sums would still be sitting on incredible gains. For instance, an investment of 10,000 pounds would be worth 360,000 pounds today."
And gold's gains since the start of the financial crisis are nothing to sneeze at either. Between 2006 to 2011," when the price peaked in U.S. dollars at around $1,920 an ounce, "gold climbed by 76% in value, as the metal is treated as a safe haven in times of uncertainty."
"The emergence of Asia, Latin America, and the Middle East into the global economy has played a significant role in this dramatic price growth," the report said. "Economic development has led to higher incomes, raising the levels of private consumption as well as private savings in emerging economies, where less-well developed financial sectors make gold an attractive store of wealth in these countries."
More information can be found online at http://www.goldbullionadvisors.com
And Chinese conglomerate buys world's largest gold vault: at 1 Chase Manhattan Plaza!
China is amassing so much gold that it needs somewhere to put it all, as do the firms with which it does business.
Last month news surfaced that a Chinese conglomerate,Fosun International, was buying the Manhattan landmark known as 1 Chase Manhattan Plaza. from JPMorgan Chasefor $725 million. JPMorgan will be relocating its employees from the iconic 60-story, 2.2 million square-foot tower, which was built by tycoon David Rockefeller.
"None of this is particularly newsworthy. What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm's commercial gold vault: incidentally, the largest in the world," Tyler Durden noted.
And now, the largest privately owned gold vault in China is opening in that nation's new free-trade zone in Shanghai. That zone, incidentally, will greatly hasten the internationalization of China's yuan (or renminbi) by creating a "fully liberalized trading hub for the Chinese currency."
Indeed, "the investment in Shanghai's new free-trade zone reflects a shift in world demand away from the U.S. and Europe toward Asia." Therefore, it's no coincidence that such a massive bullion warehouse is opening there. "A gold vault that can store 2,000 metric tons, double China's projected consumption this year, opened in Shanghai this month as owner Malca-Amit Global Ltd. seeks to benefit from rising demand in Asia's largest economy," Bloomberg reports.
"Asians in general -- they like gold, the physical gold; they don't like the paper gold," Malca-Amit's Joshua Rotbart said. "This place can be used as a trade hub basically, so foreign banks can trade with domestic banks within this facility, saving costs and time."
"Such a facility is a massive vote of confidence for the Chinese gold market," said Philip Klapwijk of Precious Metals Insights Ltd. "The trend for demand has been very strongly positive."
This isn't the first large gold vault to open in the region.Australia & New Zealand Banking Group, Deutsche Bank, and UBS all have does so in Singapore. And according toMacquarie bank analyst Matthew Turner, a surge in gold exports from the United Kingdom to Switzerland is occurring because Western gold is being liquidated from ETFs and shipped to Swiss refiners for export to Asia.
The new vault in Singapore is a continuation of China's push toward a more important role for the yuan, one facilitated by an implied gold backing, making it an increasingly attractive alternative to the U.S. dollar.
More information can be found online at http://www.goldbullionadvisors.com
"There's some form of official purchases that have not yet been reflected" in published statistics
"If you're China, the last thing you want to do is be transparent about your gold purchases, because it will drive the price up," "Currency Wars" author Jim Rickards told The Daily Reckoning earlier this year. But at some point in 2014, Rickards expects China will announce that its gold reserves have grown to 5,000 tonnes.
"That should be an earthquake because even the gold deniers, the gold doubters, are going to have to sit up and take notice," Rickards said. "Either the Chinese are dopes, which they're not, or people will start to get gold, which I think they will."
Now Philip Klapwijk of Precious Metals Insights Ltd. is saying China may have bought 300 metric tons of gold in the first half of this year to diversify its foreign-exchange reserves, the world's largest.
"The probability is that there's some form of official purchases that have not yet been reflected in the monetary gold reserves," Klapwijk said, referring to bullion declared to theInternational Monetary Fund. "Undoubtedly, that's provided support for prices, which could have been weaker.
"Purchases since end-2008 could be quite substantial, especially in calendar 2013 to date," said Klapwijk, who used for work for the metals consultancy Thomson Reuters GFMS. "It remains to be seen if China will decide at some point to re-position some or all of this bullion in the monetary reserves and publish a new figure for its official gold holdings."
More information can be found online at http://www.goldbullionadvisors.com
