Chinese and Indian gold price premiums on the rise.  Gold coin buyers rampant!

New York closed at $1,093.90 down $6.30 after closing at $1,100.20 on Tuesday. This morning in Asia the gold price rose back to $1,097 before the LBMA gold price was set at $1,101.65.  The dollar was weaker at $1.0996 after yesterday’s $1.0940 against the euro, with the dollar Index down to 97.03 from 97.28 yesterday. The euro equivalent was €1,001.86 down from €1,002.74 yesterday. Ahead of New York’s opening, gold was trading in London at $1,101.80 and in the euro at €1,001.73.

The silver price closed at $14.80 down 1 cent in New York. Ahead of New York’s opening it was trading at $14.87.

The ‘bear raid’ continues with another 2.384 tonnes of gold sold from the SPDR gold ETF on top of the  16 tonnes sold since Sunday night. The Gold Trust saw sales of 0.48 of a tonne yesterday. But there is a difference today. The impact on the gold price was zero as the gold price rose back to $1,097 in Asia. The holdings of the SPDR gold ETF are at 687.309 tonnes and 167.28 tonnes in the Gold Trust.

Retail demand in China is now jumping as it is in India, but it has still to reflect in London’s demand. The price rise in London was mainly due to a weaker dollar. But in both India and China premiums are rising with sales doubling in Hong Kong. Retail demand in these countries needs to feed through to Shanghai before we see this demand damage the ‘bear raid’.

One cannot know if the bears will continue their raids or how much gold they have to orchestrate their raids. The triggering of ‘stop loss’ protections has happened but will not continue unless more raiding takes place. How much demand will come from Asia now that it is picking up is key but if it matches the gold arbitraged into China, then the bears will have to cover their short positions. When we have more information we will be able to see where gold and silver are going. Gold coins buyers are rampant!

Many feel gold could have had its day, but such views are not those of long-term investors or central banks. With Russia continuing to build its gold reserves buying in its own production it is removing this supply from the global market, much as we believe China is doing. Kazakhstan takes all its local production into reserves and has done for years now. This adds to the reality that market prices in New York and London do not reflect global demand.

Silver ignored gold’s fall below $1,100 and has done so on its rise back there again. Investors should again ask why?

Julian D.W. Phillips for the Gold & Silver Forecasters – and