Gold Price News
Gold Prices Regain $1220 as Crude Oil Stems Plunge, UK's May Gets Brexiteer Backing
Fri, 16 Nov 2018 14:30:42 +0000
GOLD PRICES rose against a falling US Dollar on Friday, halving last week's 1.9% drop to trade back above $1220 per ounce as Western stock markets fell and crude oil rallied from this month's 17% plunge so far.
 
Gold priced in the British Pound meantime re-touched £950 for a second day running, adding 2.0% for a week begun by one senior Conservative calling Brexit "a failure of British statecraft on a scale unseen since the [1956] Suez crisis" as he became the first of 8 ministers to resign over the draft EU withdrawal deal which Prime Minister Theresa May must now put before Parliament.
 
Two senior 'Brexiteer' members of May's minority Conserative government today gave her their support.
 
The Pound rallied 1 cent against the Dollar after plunging yesterday to new November lows, reclaiming a $1.28 handle to trade only 1.5 cents down for the week.
 
The Euro meantime regained the last of a 1.5-cent drop against the Dollar to rise back near $1.1350, but European stock markets erased early gains to trade 2.5% down for the week in terms of the single currency.
 
While crude oil extended its bounce from this week's 12-month lows to 5.1%, silver and platinum also rose with gold prices on Friday, adding 1.6% and losing 1.0% respectively from last Friday at $14.37 and $844 per ounce.
 
Chart of WTI crude oil. Source: Investing.com
 
"The issues around Brexit have invigorated a little bit of safe-haven buying in the [gold] market," Reuters quotes Daniel Hyne at Australasian bank ANZ.
 
"The focus of the market has turned slightly to geopolitical issues."
 
"Investors are a bit more interested in gold," agrees Dutch bank ABN Amro, "[and] the momentum is up.
 
"We may go to $1250 in the short term."
 
Priced in the weakened British Pound, London's FTSE100 index of international companies fell on Friday back below 7,000 – a record high when first reached in spring 2015 – but curbed its weekly drop to 1.5%.
 
The more UK-focused FTSE250 lost 2.3% from last Friday's finish.
 
UK government bond prices edged back from Thursday's surge, nudging the yield offered to buyers of London's 10-year debt up to 1.40% from yesterday's 14 basis-point plunge to the lowest since August.
 
Shanghai gold prices meantime rallied 0.9% from this week's 1-month lows in Yuan terms, closing Friday above ¥272 per gram.
 
US President Donald Trump was meantime said overnight to be considering Turkey's request for extradition of self-exiled cleric Fetullah Gülen – accused by Ankara of masterminding a failed coup in 2016 – in exchange for easing its pressure on White House ally Saudi Arabia over the murder of journalist Jamal Khasshoghi last month in Istanbul.
 
Following the loss of the House to Democrats in last week's mid-term elections, a bipartisan group of US senators is pushing for sanctions against 17 Saudis allegedly involved in Khasshoghi's death.
 
Saudi prosecutors say they want the death penalty for five people accused of the murder.
 
After Riyadh said last weekend it may cut 2019 oil output to try to boost prices, sources in neighboring Iraq meantime said Friday that crude oil exports from Kirkuk through the Kurdistan-Turkey pipeline have restarted, specialist news agency S&P Global Platts reports, "paving the way for a rise in loadings from [oil cartel] Opec's second-largest producer."
Gold Trading 'Quiet' as 'Lose-Lose Brino' Brexit Deal Sinks UK Pound, EU 'Too Clever By Half'
Thu, 15 Nov 2018 15:25:02 +0000
GOLD TRADING saw bullion prices hold little changed against a rising US Dollar on Thursday as Western stock markets fell again and the British Pound sank following a raft of resignations from UK prime minister Theresa May's government over her draft EU withdrawal deal.
 
Now needing to put the deal before Parliament in London, and saying the choice is between this deal, a hard Brexit or no Brexit at all, May today faced calls for a vote of no confidence from pro-Brexit members of her Conservative Party.
 
The remaining 27 member states of the European Union also need to approve the UK's withdrawal agreement, with Brussels setting a date 10 days from now.
 
"Like [Tuesday] we saw plenty of buyers below the $1200 level [on Wednesday]," says a trading note from Swiss refiners MKS Pamp.
 
But with gold prices rising $15 per ounce amid last night's Brexit headlines, "Quiet trading in Asia today," it goes on, noting that "The [Shanghai] premium eased to $4-5 over loco London" – around half the typical incentive for new bullion imports into China, the No.1 gold consumer nation.
 
Four members of May's team quit Thursday morning, saying they do not support the proposed withdrawal agreement and repeating the action of leading Brexiteers David Davis and Boris Johnson in July, when they agreed to May's plan in face-to-face meetings only to resign publicly the following day.
 
The Pound sank Thursday but UK government bond prices jumped, pushing London's cost of borrowing down near the lowest levels of 2018.
 
Eurozone stock markets slipped 0.6% while London's FTSE100 index of mostly international corporations edged 0.4% lower and the Pound fell 3 cents towards $1.27 versus the Dollar.
 
"UK-facing shares fall as foreign-currency earners rise," notes UK brokerage Charles Stanley's Garry White, adding that "[global bank] HSBC sees the Pound falling to $1.10 in the event of a no-deal Brexit. If the agreement makes it though Parliament, sees it at $1.35."
 
Gold traded in UK Pounds recovered most of last week's £18 loss, jumping 2.8% to reach £948 per ounce.
 
It peaked at £1194 amid the English riots of summer 2011, falling to a low of £693 four years later before peaking again at £1069 immediately after the mid-2016 Brexit referendum result.
 
Chart of UK gold price in Pounds per ounce. Source: BullionVault
 
Jumping back above £11 per ounce for UK investors, silver like gold prices also recovered this week's earlier losses in US Dollar terms on Thursday, rallying 30 cents from the new 34-month low of $13.90 per ounce hit overnight.
 
Platinum prices failed to rally versus the Dollar however, trading around 2-week lows at $830.
 
Brent crude oil meantime extended its bounce from this week's new 8-month lows, rallying to $66.50 per barrel.
 
"This is a bad deal which isn't in the interests of the whole country," said UK opposition Labour Party leader Jeremy Corbyn last night – before reading the document – and then calling on May to "withdraw her half-baked Brexit deal that doesn't even have the support of her own Cabinet" in Parliament today.
 
"The Prime Minister has broken her promises," said MP Nigel Dodds of Ulster's DUP, the Unionist party previously allied with May's Conservative Party to give her a working majority in Parliament.
 
"Since the very beginning," said the European Union's chief negotiator Michel Barnier this morning, "we have had no doubt that Brexit is a lose-lose situation and that our negotiations are only about damage control."
 
Across its 585 pages, the Draft Agreement on the UK's withdrawal from the European Union and the European Atomic Energy Community uses the words:
  • "customs union" twice
  • "hard border" 4 times
  • "migration" 5 times
  • "tariff" 21 times
  • "VAT" 28 times
  • "sovereign" 84 times
  • "member states" 202 times
  • "transition" 401 times
  • "European Parliament" 417 times; and
  • "Parliament of the United Kingdom" once.
"There is ample material to support an assertion that this is Brexit in Name Only (BRINO)," says historian, journalist and Brexit blogger Richard North.
 
"It is the consummate triumph [for Brussels]," counters Telegraph columnist Ambrose Evans-Pritchard. "Britain is ‘out of Europe, but run by Europe’. The EU can have its cake and eat it.
 
"But sometimes in life you can be too clever by half...Some 80% of Europe’s capital markets are in London [and if the UK rejects May's deal] the financial shock of a no-deal Brexit would crystallize mounting risks and hurl the Eurozone into an existential crisis."
 
Italy's debt prices slipped again Thursday while German bond prices rose – widening the BTP-Bund spread to 315 basis points – as Rome's ruling left-right coalition vowed to push ahead with breaching rules of government deficits with its 2019 spending plans.
 
Ahead of Romania taking on the revolving EU presidency for 2019, Bucharest's deputy speaker in parliament "gave the middle finger" to Brussels yesterday over an EU report on corruption in the member state.
 
Hungary's government meantime gave asylum "for security reasons" to ex-Macedonia prime minister Nikola Gruevski, convicted at home for corruption.
Gold Prices Re-Test $1200 But GLD Firm as 'Europe's Mess' Boosts 'Over-Priced' Dollar
Wed, 14 Nov 2018 14:34:00 +0000
GOLD PRICES slipped back below $1200 for the second session running in London on Wednesday, retreating $2 towards fresh 5-week lows as the Dollar rose, 
 
Asian stock markets fell again but Europe steadied for a second day running as the UK government met to debate Prime Minister Theresa May's 500-page Brexit deal with Brussels on leaving the European Union.
 
The governments of Austria and the Netherlands meantime asked Brussels to begin EU procedures against fellow member Italy over its planned 2019 budget deficit.
 
That news saw Italy's borrowing costs blow out to a spread of 330 basis-points over comparable German Bund yields, back near last month's 5-year highs.
 
Euro gold prices touched new 3-week lows at €1063 per ounce while the EuroStoxx 600 equity index edged 0.1% higher.
 
"Messy European politics, along with a [US] Fed which is set to remain on its tightening trajectory, have kept the Dollar index above 97," says a note from Canadian brokerage TD Securities, "which continues to add to downside pressure on gold, as we expected.
 
"CTAs [Commodity Trading Advisers] have now pared back much of their record-setting shorts, [but] we suspect that a break below $1190 would prompt the [algorithmic traders] to once again increase their short positioning as downside momentum firms."
 
"We think the Dollar's too high, it has to back off," counters John LaForge, head of real-asset strategy at US bank Wells Fargo's Investment Institute.
 
"[Moreover] when stockmarket corrections are in the 10-15% level...which is where we are now...investors go out and look for some sort of insurance, and they typically will buy gold, even on a bounce in stocks."
 
Tuesday's stabilization in US equities saw giant gold-backed ETF the SPDR Gold Trust (NYSEArca: GLD) – a major vehicle for US money managers to track the gold price – shrink just 0.1% in size.
 
Since late-October's 3-month high in gold prices, the GLD has expanded by 1.8% in size, snapping its more typical pattern of growing or shrinking in size in line with the metal's price direction.
 
The US stock market has meantime slipped 0.7%.
 
Chart of SPDR Gold Trust (NYSEArca: GLD) size in tonnes. Source: BullionVault
 
With the S&P 500 index of listed US corporations rising 7.2% between July and September to reach its highest ever quarterly finish, the GLD's No.1 holder Fidelity Investments grew its position in the gold-backed ETF by 3.2%, regulator filings show.
 
No.2 holder First Eagle – an independent investment firm running some $111bn for clients – expanded its GLD position by 16.8%, while Bridgewater Associates – the No.7 holder run by Ray Dalio with around $160bn of assets under management – kept its holdings in the gold ETF unchanged.
 
First Eagle's GLD holdings ended Tuesday worth some $783m, and Bridgewater's $444m.
 
"Gold is that one defensive area that when things get choppy [investors] do go to," LaForge at Wells Fargo told CNBC overnight.
 
"When stocks find a bottom here, I think we will see people buy insurance, they'll buy gold."
 
Gold prices in Shanghai on Wednesday meantime held a $6 premium per ounce to London quotes, offering an incentive for new bullion shipments into China – the No.1 gold miner, importer and consumer nation – some 25% below its 3-year average.
 
The UK gold price in Pounds per ounce bounced 0.8% from yesterday's 5-week low of £922 as UK leader May today told Parliament she was "significantly closer" to reaching a Brexit deal with Brussels some 2.5 years after the narrow 'Leave' victory in 2016's referendum on quitting the European Union.
 
Rumors on Wednesday said at least 2 members of May's team refuse the deal and will resign, and other so-called Brexiteer members of her Conservative Party have also said they will reject it.
 
So will the opposition Labour Party, also despite not yet being allowed to read the proposal.
Gold Price Re-Tests $1200 Low as Brexit 'Optimism' Meets 'Stockpiling', Trump Whacks Macron
Tue, 13 Nov 2018 13:39:31 +0000
GOLD PRICES rallied from their first dip below $1200 per ounce in 5 weeks Tuesday in London as Italy faced down the EU over its 2019 deficit, Brexit dominated UK headlines, and US President Trump said France needs to pay more into the Nato military alliance.
 
Crude oil fell yet again, and Asian stock markets extended last night's rout on Wall Street, but European equities recovered 0.5% on average by lunchtime.
 
Silver touched a sub-$14 price for only the second time in nearly 3 years before adding 10 cents.
 
Platinum prices also dropped and bounced, touching new November lows before reaching $847 per ounce, still some 3.5% beneath last week's 5-month highs.
 
"There remains inherent weakness across the precious complex," says the latest trading note from MKS Pamp, the Swiss refining and finance group, "and we are likely to see a re-test of [gold price] $1200
before any uptrend is resumed.
 
"[While] political uncertainty and softer global equities should drive safe-haven demand over medium-term...a move underneath $1200 will see targets extend toward $1195 and
$1180," MKS says.
 
As for silver re-testing $14.00 per ounce, "The metal has not made a sustained break underneath the figure since early 2016 and could target a move to $13.75 - $13.65 should the support be broken."
 
After French President Emmanuel Macron criticized nationalism as "a betrayal of patriotism" in an Armistice Day speech apparently aimed at US leader Donald Trump and Russia's Vladimir Putin on Sunday, Trump today attacked him for France's failure to meet its Nato military treaty spending obligations.
Rumors of "cautious optimism" in both London and Brussels over an impending UK deal with the European Union for next March's Brexit meantime saw the Pound rise to 1-week highs against the Dollar, adding almost 1.5 cents from November's low.
 
That helped squash the UK gold price in Pounds per ounce down near £926, some 4.5% beneath late-October's 4-month high.
 
Gold priced in Euro terms meantime slipped to 3-week lows at €1067 as rumors spread that Italy's left-right coalition government will refuse European Union demands to re-submit a new 2019 budget and cut its deficit spending plans.
 
"The only way to respect European parameters is to commit economic suicide, which would lead to recession," said deputy prime minister Luigi di Maio of the 5 Star Movement party, in Rome on Monday, repeating comments made last week by independent Economy Minister Giovanni Tria.
 
"[Left-wing] Di Maio and [right-wing Lega Party partner Matteo] Salvini are at loggerheads over VAT sales tax, immigration and free prescriptions," says Il Sole 24 Ore. "But they are united on a hard line against Europe."
 
Hitting "procedural roadblocks" in Brussels' parliament over taking action against member states Poland and Hungary regarding their move towards 'anti-European' rules on migration and political freedoms, the European Commission yesterday also warned Romania not to "abuse" its new GDPR data protection rules to force journalists to reveal their sources.
 
The European Union meantime admitted yesterday that it cannot verify how €1bn of tax-payers' money was spent on Syrian refugees in Turkey – "a serious situation" according to chief European auditor Bettina Jakobsen.
 
Ahead of the Brexit deadline of 29 March 2019, average UK wages rose over the summer at their fastest pace in 3 years, new figures showed today.
 
Chart of UK average wages, including bonuses, real and nominal. Source: ONS
 
The figures also show the steepest drop on record in the number of migrants working in Britain from the "new EU" countries which joined the economic union in the early 2000s.
 
The number of UK employees from Poland, Hungary and their surrounding region fell by 154,000 over the 12 months to September, dropping back below 1 million.
 
The UK's jobless rate has risen to 4.1% of working-age people, edging higher from the lowest level since spring 1975.
 
"Job creation since May has averaged just 2,900 a month," says senior economist Mike Jakeman at accounting consultancy PwC.
 
"This slowdown in the number of new jobs opening up is likely to feed through into weaker consumer spending in the coming months."
 
Major UK grocery group Premier Foods (LON: PFD) said Tuesday it's spending £10m on "stockpiling" key ingredients for its cakes, sauces and convenience meals ahead of the Brexit deadline.
 
Growing its earnings per share by 13.8% over the last 6 months from the same period in 2017, Premier sold £716m worth of goods on an annualized basis.
Gold Price Slips in USD as Brexit + Italy Boost Dollar, Hedge Funds Stay Bearish
Mon, 12 Nov 2018 14:14:27 +0000
GOLD PRICES edged lower on Monday as the US Dollar hit 16-month highs on the currency market amid fresh concerns over UK Brexit turmoil and Italy's yawning budget deficit, writes Atsuko Whitehouse at BulllionVault.
 
Crude oil meantime bounced 1.5% from its 10-day slump after Saudi Arabia said it's considering a steep output cut for December.
 
The Opec oil cartel is "focused on mitigating downside risks" reckons Peter Kiernan, lead energy analyst at the Economist Intelligence Unit in Singapore, after crude prices declined by almost one-fifth from this autumn's multi-year highs on a surge in supply from top three producers the United States, Russia and Saudi Arabia.
 
Spot gold meantime touched a new 1-month low of $1204 in Asian trade before regaining $3 per ounce in London business.
 
Hedge funds and other money managers last week trimmed their bearish positions in Comex gold futures and options by 4.3%, down for the 4th week running to the notional equivalent of 401 tonnes according to data from US regulators the CFTC.
 
That group's bullish position was still smaller however, rising only 2.7% to the equivalent of 285 tonnes and leaving Managed Money speculators net bearish on gold overall for the 17th week in a row.
 
Chart of Managed Money long and short bets on Comex gold futures + options. Soure: BullionVault via CFTC
 
Holdings in the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust (NYSEArca:GLD), meantime shrank 3.8 tonnes to 755 tonnes as shareholders cut their position overall.
 
That was the first weekly drop in 5 for the world's largest gold-backed ETF trust fund.
 
"The Dollar is gaining strength after last week's Fed meeting and positive US economic data, which is weighing on non-yielding assets like gold," says a note from Geojit Financial Services in Kochi, south-west India.
 
In the UK, Prime Minister Theresa May was reportedly forced on Monday to drop plans for a cabinet meeting to agree her final Brexit deal with the European Union due to growing resistance within her own government following the high-profile resignation of 'EU Remainer' Jo Johnson, brother of arch-Brexiteer and former Foreign Secretary Boris.
 
Gold prices for UK investors jumped 0.9% from Friday's close to regain the £940 per ounce level Monday morning as Sterling fell.
 
The single Euro currency meantime hovered around 17-month lows against the US Dollar, slipping below $1.13 as the European Commission looked ready to escalate its budget battle with Italy.
 
Tuesday marks the deadline set by the EU for Rome's left-right coalition to revise its 2019 spending plans as Giovanni Tria, Italy's economy minister, works to reach a deal, a government source said on Sunday.
 
Gold prices for European investors climbed to reach €1073 Euro per ounce before halving that small 0.6% rally in afternoon trade.
 
Italy's borrowing costs meantime ticked higher on the bond market while other Eurozone government yields eased back.
 
US bond markets stayed closed Monday in observance of Veterans' Day. 
Rebound in Gold Investing 'Faces Long Haul' as Dollar Gains on Fed Rate-Rise Plan
Fri, 09 Nov 2018 13:59:08 +0000
GOLD INVESTING prices erased the last 3 weeks' gains versus a rising US Dollar on Friday in London as world stock markets also fell, following Wall Street lower after the Federal Reserve confirmed it plans to hike Dollar interest rates next month.
 
Dropping to $1212 per ounce – nearly 2.5% below late-October's 3-month high – wholesale gold investing prices also held near 3-week lows at £930 in British Pounds and 2-week lows of €1068 for Eurozone traders.
 
Crude oil meantime headed for its 10th consecutive daily drop – the longest losing streak on record according to Bloomberg – as news of record-high oil imports by China met worries over excess global supplies ahead of this weekend's meeting of the Opec oil cartel, rumored to bring production cuts from Saudi Arabia and Russia for 2019.
 
US household spending still shows "strong growth" according to the Fed's November statement on Thursday, but "business fixed investment has moderated from its rapid pace earlier in the year," the US central bank said, holding rates unchanged for this month as expected.
 
Despite October's stockmarket slump – the worst monthly drop since 2012 – "There was no 'financial stability' comments", notes Peter Boockvar at US advisors Bleakley Financial, "and there was not one mention about the slowing housing and auto sector."
 
"The flattening US yield curve," says new gold analysis from Marcus Garvey at Chinese-owned ICBC Standard Bank, pointing to the shrinking gap between short-term rates and longer-term yields, "[implies] that the market believes the US rates cycle is already approaching its latter stages.
 
"[But this] runs counter to a Dollar rally," he goes on, and if the Fed does continue to raise its key rate as expected, "Over the long-term, it will be hard for gold to escape US real [inflation-adjusted] rates" – a decade-long relationship from which bullion has so far diverged since the second half of 2017.
 
Chart from ICBC Standard Bank of gold prices vs. real 5-year US interest rates
 
On the currency market Friday the Dollar regained the last of this week's prior 1.5% drop versus the Euro, and traded back towards end-October's 22-month highs versus the Chinese Yuan.
 
"Gold has come under pressure because of [this] stronger Dollar," says Peter Fung at dealers Wing Fung Precious Metals in Hong Kong.
 
"Market sentiment from here could [again] be bearish for gold."
 
October's stockmarket sell-off and rising gold bullion price saw "early signs of professional interest in the market plus improvement in grass roots retail [investment] activity," says the new Q3 2018 Gold Survey Update from Thomson Reuters GFMS, now renamed Refinitiv.
 
"We believe that there is scope for further price appreciation, but it does look as if this will be something of a long haul.
 
"There is little appetite as yet for fresh longs [in the speculative Comex derivatives market]. We are looking for a fourth quarter average of $1224, leading to an annual average for next year of $1285."
 
Silver outpaced gold's losses on Friday, falling to 6-week lows at $14.22 per ounce. Platinum prices held firmer at $857, shedding 1.2% from last Friday's 19-week closing high.
Gold Price Slips as EC Slams Italy's 3% Deficit Ahead of US Fed Rates Decision
Thu, 08 Nov 2018 14:29:41 +0000
GOLD PRICES drifted lower for the fourth session running on Thursday, touching 1-week lows at $1222 per ounce in London ahead of today's interest-rate decision from the US Federal Reserve – widely expected to leave policy unchanged.
 
The Dollar itself eased back on the FX market, helping cut the gold price in Euro terms to a 2-week low beneath €1070 and the UK gold price in Pounds per ounce to mid-October levels at £930.
 
Ten-year US Treasury bond prices edged higher ahead of the Fed's statement, cutting the yield offered to new buyers back to 3.22% from yesterday's fresh 7.5-year high.
 
A small rise in German Bund rates meantime kept Italy's BTP yield spread below 300 basis points – the 5-year high hit since May – even as the European Commission again rebuked Rome's new left-right coalition government over its 2019 deficit spending plans.
 
Instead of spending 2.4% of GDP more than it receives in tax next year, Italy will run a budget deficit 2.9% forecasts European Economic Affairs commissioner Pierre Moscovici, rising to 3.1% in 2020 and so breaching the European Union's agreed limits with plans for a basic household income, pension reform and new public investment.
 
"[This] deterioration of the deficit, united with the risks of lower growth...[mean] uncertainty and risks, both internal and external, are on the rise and are beginning to weigh on the pace of economic activity," the EC warns, cutting its 2019 economic growth outlook for Italy to 1.2%, joint lowest with the Brexit-set UK among European states.
 
Chart of Italy's BTO-Bund yield spread. Source: Il Sole 24 Ore
 
European stock markets failed to follow Asia higher after Wall Street rose sharply overnight.
 
"Gold is trading right at the November lows," says a note from the Asian trading desk of Swiss refiners and finance group MKS Pamp, pointing to what "should be next support" at the 100-day moving average of $1216 per ounce.
 
Wednesday had seen "decent buying action out of China [and] London were [also] on the bid" following the US mid-term election results, MKS adds.
 
Peaking at $1231 however, gold was then "sold off throughout the [New York] session" as the US Dollar rallied on the FX market.
 
Gold mining output from former No.1 producer South Africa fell by almost one-fifth in September from the same month a year before, new data said Thursday, hitting its lowest since 2014.
 
Gold imports to India – the No.2 consumer market after China – meantime showed a 42% year-on-year drop for October the Finance Ministry said, totalling less than 39 tonnes.
 
"The restraint was chiefly due to the steep rise in gold prices in Indian Rupees," says German finance group Commerzbank, noting that "bullion dealers and jewelers are running numerous special offers in a bid to revive gold demand during [this week's] Dhanteras and Diwali festivals" ending yesterday.
 
Venezuela's socialist president Nicolás Maduro is meantime struggling to get his country's remaining 14 tonnes of gold bullion reserves shipped back from the Bank of England, The Times reported this morning, as US sanctions against his government bite deeper.
 
"The Bank has refused to release the gold bars, worth about £420 million," The Times says, "[because] British officials are understood to have insisted [on] clarification of the Venezuelan government's intentions for the gold [over] concerns that Mr.Maduro may seize the gold, which is owned by the state, and sell it for personal gain."
 
With crude oil accounting for 98% of Venezuela's exports, shipments to the US fell by one-fifth last month from September, new data showed Wednesday.
 
Oil prices today popped only to fall to new 8-month lows after reports from Russia's state-owned Tass news agency said Moscow and Saudi Arabia are discussing possible output curbs for 2019.
Gold Prices Unmoved by US Mid-Terms Roadblock, Rebound in China Demand
Wed, 07 Nov 2018 13:55:56 +0000
GOLD PRICES held little changed after yesterday's drop on Wednesday as the US mid-term election results split power in Washington and new data said China's huge foreign exchange reserves shrank to an 18-month low in October.
 
While the Republicans grew their majority in the Senate, the Democrats retook control of the House –  a "setback" for President Trump according to Fox News, as it risks blocking his policy agenda.
 
The People's Bank of China meantime said its foreign currency reserves fell some 1% last month to just above $3.0 trillion.
 
Gold priced in the Dollar gave back an overnight rally to trade at $1230 per ounce.
 
Trading at €1071 and £936 respectively, gold prices for Euro and UK investors were also virtually unchanged from this time 3 weeks ago.
 
Asian equities slipped but European stock markets rose solidly after what Trump called a "Big Victory...in this incredible Midterm Election."
 
Reports from India continued to say gold investment and jewelry demand remain weak for today's Diwali festival – peak of the No.2 consumer country's strongest gold-buying season – thanks to high prices in terms of the weak Indian Rupee.
 
With India's domestic gold price edging back Wednesday, "Bullion traders said the slide in gold prices was mostly due to absence of worthwhile activity," reports the Economic Times, "as jewellers and retailers made token purchases to mark the auspicious occasion of 'Diwali' and beginning of Hindu Samvat year 2075."
 
An overnight drop in the Chinese Yuan versus the Dollar meantime saw Shanghai gold prices hold unchanged, trading just 1.0% below late-October's 9-month highs.
 
That edged the Shanghai premium above London quotes to around $5.80 per ounce, still one-third below the typical incentive for new bullion imports into the world's No.1 gold buying market.
 
China's private-sector gold demand grew 5.1% over the first 9 months of 2018 from the same period last year, the government-mandated China Gold Association said Tuesday, with a 4.2% drop in gold investment via coins and bars offset by industrial use jumping 24.7% and jewelry demand – by far the largest segment – growing 6.9%.
 
 "The decline in gold prices drove consumers' buying sentiment for gold jewelry," says the CGA.
 
"You [also] need disposable income to buy gold jewelry," said analyst Li Fu from China Citic Bank at last week's London Bullion Market Association conference in Boston, noting how the spread of online retailing has enabled gold demand growth across China, including lower-tier cities and especially rural areas, where higher-income households carry less debt than their urban peers.
 
Slide from Li Fu of Citic's presentation at LBMA 2018.
 
Against that however, "Chinese households currently see gold as a poor investment," she went on, because since the price drop of 2013 it has failed to boom like real estate or equities.
 
Chinese households can now also access global asset markets through brokerage accounts, leaving gold as more of a "day trading" market for private investors looking to act on small price moves.
 
Looking at China's world-leading gold mine output, production fell 7.5% across the first 3 quarters of this year says the CGA, with output from "all key gold-producing provinces and enterprises fell to varying degrees...[while] major groups continue to dig deeper into cost reduction and efficiency gains [such as moving to] centralized procurement of bulk materials and avoiding peak times for electricity use.
 
"Gold enterprises that did not meet environmental protection requirements cut production, shut down or were rectified."
 
Looking abroad, "China's gold enterprises have become unstoppable in the overseas market since the beginning of this year," the CGA says, highlighting the policy of "going out" with a list of investments and acquisitions by Chinese miners – something stressed by industry leaders at last month's China International Gold Conference.
 
Exploration spending across China's minerals industries last year snapped 4 years of decline, the CGA says elsewhere, holding steady at the equivalent of $11 billion.
 
Mining-backed marketing, research and lobby group the World Gold Council in September launched a China chapter, inviting China Gold Group's Song Xin as chairman and also welcoming Shandong Gold Group to its global board of directors.
 
Next year's LBMA conference will be held jointly with the Shanghai Gold Exchange in the city of Shenzhen.
 
"We believe in the future development of the global gold market," said SGE president Jiao Jinpu to the Boston conference.
Gold Bullion Slips as India Reports Poor Diwali Demand, And Not Just for Gold
Tue, 06 Nov 2018 16:26:10 +0000
GOLD BULLION slipped against a weakening US Dollar in London trade Tuesday, falling harder for Euro investors ahead of the US mid-term election results as news reports from India confirmed poor festive demand for Dhanteras at the No.2 consumer nation's jewelry stores.
 
Priced in the Dollar gold bullion edged back down to $1228 as newscasters looked for early Senate and House results later this evening.
 
Gold priced in the Euro meantime fell to €1075 as Wall Street ticked higher but European stock markets again moved opposite to Asian equities, falling some 0.4% for the day.
 
"The recent sharp increase in [Rupee gold] prices could weigh on the consumer wallet, limiting purchases during this season," says P.R.Somasundaram, managing director for India at the mining-industry's World Gold Council.
 
With the peak gold-buying season of Diwali culminating on Wednesday, "Demand for gold on [Monday's] Dhanteras was sluggish across the country," agrees India Today, "with [only] Delhi and Mumbai swimming against the current."
 
But rural gold demand counts most however, counters the Economic Times, noting that less developed regions of the world's most populous nation account for 60% of its annual bullion off-take.
 
"Firm prices and a liquidity crunch in the [Indian bullion] market have flattened demand on India's gold-buying festival Dhanteras," the paper adds, reporting a shift to light-weight jewelry by consumers.
 
Reuters meantime reports weaker-than-expected festive demand across India's consumer goods sector, disappointing retailers from smartphones to cars as well as jewelry and bullion.
 
Chart of India household gold demand. Source: BullionVault via WGC
 
"Dhanteras sales this year is expected to be flat though it is better than the last few months when demand was muted," says Nitin Khandelwal, chairman of the All India Gem & Jewellery Domestic Council.
 
"Rural sales may not see a significant increase over last year, as farmers are yet to get [minimum support price]" from the government for this year's harvest.
 
"When small neighbourhood jewelers say that sales have dropped, that may be true.," adds Saurabh Gadgil of PNG Jewellers, also a director of the India Bullion & Jewellers Association.
 
"But there is a marked shift in customers from the unorganised to organised sector. People prefer to buy from stores that offer better quality...a variety of designs, certification, after sales [care] and buyback."
 
Faced with consistently large outflows of currency to pay for India's imports of gold bullion, the New Delhi government has tried a variety of ways to curb household demand over the last 5 years.
 
The 3 so-called "gold policies" of 2015 "were picked out of a hat," said Rajesh Khosla, head of refiner MMTC Pamp, at last week's LBMA conference in Boston.
 
Looking to formalize much more of the industry, and encourage direct imports of gold doré for refining into bullion, "The new and comprehensive 2018 policy document took 58 years to come, but is much more significant," Khosla said.
 
Fearing a block on its gold bullion reserves meantime, the government of Venezuela is looking to withdraw its remaining holdings from the Bank of England in London, Reuters claims from Caracas, citing un-named sources.
 
Last week the United States imposed new sanctions against Venezuela's president, Nicolás Maduro, saying that the Trump White House is committed to "fighting dictators performing atrocities in neighbouring countries."
 
The US sanctions are "crazy" and "schizophrenic", replied Maduro overnight, rebuking action against Venezuela gold exports by saying Caracas is now certifying 32 gold fields that will make Venezuela "the second largest gold reserve on Earth".
 
Priced in the British Pound, gold meantime erased the last of late-October's 3.3% jump on Tuesday as Sterling rallied again on the FX market despite Brussels and London confirming a lack of progress towards a Brexit deal.

 

Dollar and Gold Prices Down as Trade War 'Worsens' Amid Iran Sanctions, Fed Rates Decision, US Mid-Terms
Mon, 05 Nov 2018 14:19:33 +0000
GOLD PRICES slipped Monday lunchtime in London as European stock markets held a small gain, shrugging off another day of equity losses in Asia as a busy week began for trade, sanctions and monetary politics, writes Atsuko Whitehouse at BullionVault. 
 
Even as the US Dollar index retreated from last week's 17-month high against a basket of other currencies, spot gold prices fell 0.4% from Friday night's close to trade below $1229 per ounce.
 
"We are seeing increasing weariness that the US Dollar could run out of steam, which naturally plays into gold," reckons Stephen Innes, APAC trading head at spread-betting bookmakers Oanda in Singapore.
 
"If we get a little bit of escalation of US political risk that plays even more favourably into gold."
 
Ahead of tomorrow's key US mid-term elections, political pundit Nate Silver now puts a 1-in-7 shot on the Democrats winning the Senate, with a 1-in-7 shot on the Republicans holding the House of Representatives.
 
Lambasted by President Trump for raising interest rates, the Federal Reserve then meets to announce its latest policy on Thursday.
 
Trump's White House today re-introduced sanctions against No.5 oil exporter Iran over its nuclear research program, but gave some of America's closest allies exemptions that will allow Tehran's biggest customers – mostly in Asia – to continue buying its crude for now. 
 
US oil prices fell Monday, down below $63 per barrel.
 
Hedge funds and other money managers last week increased their bearish position in Comex gold futures and options by 69%, up to the notional equivalent of 141 tonnes – the highest in three weeks – according to US regulator the CFTC.
 
Chart of 'Managed Money' net long in Comex gold futures and options. Source: BullionVault via CFTC
 
Holdings in SPDR Gold Trust (NYSEArca: GLD), the world's largest gold-backed exchange-traded fund, meantime fell 1.8 tonnes on Friday's small price drop.
 
Ending the week needing 759 tonnes however to back its shares, the GLD recorded its 4th weekly growth and its 1st calendar month increase since April. 
 
"We expect US-China trade tensions to get worse before they get better," analysts at US financial giant Citi meantime say in a note after China's President Xi Jinping hit back President Donald Trump's "America First" policies, denouncing 'law of the jungle' and "beggar-thy-neighbour" trade practices.  
 
The Shanghai Composite stock index declined 0.4% on Monday and Hong Kong lost over 2.0% as Japan's Nikkei 225 stock index lost 1.6% and South Korea's export-heavy Kospi index fell 0.91%. 
 
"Equity markets do not seem to be fully incorporating the risks of an escalation of tensions yet," says Citi, "which could have an effect on investment, sentiment, inflation, and growth." 
 
Eurozone finance ministers are today set to discuss Italy as the bloc waits for Rome to respond to the unprecedented rebuke it received from Brussels two weeks ago, telling the left-right coalition to revise its 2019 deficit spending plans by 13 November.
 
"[But] if the recipe works here, it will be said at a European level: 'We should apply the recipe of Italy to all other countries'," says anti-establishment deputy prime minister Luigi Di Maio to the Financial Times.
 
The Euro today slipped 0.2% vs the Dollar, helping keep gold prices for European investors above €1080 per ounce.
 
On the Brexit front, the London government today dismissed as "speculation" reports in The Sunday Times that an all-UK customs deal to remain within EU rules is being prepared with Brussels as a solution to the Irish border problem. 
 
As Sterling rose Monday, the UK gold price in Pounds per ounce slipped 0.5% to £945.
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