Gold has resolved its value of above £918.33 an ounce, from last weeks battering which saw it drop to a
two year low of £866.51 an oz (8.1% in a week). Furthermore this recovery does not fill all investors with
confidence, because the ultra loose monetary policies of many of the world’s major central banks can be
foreseen as unstable, and potentially lead to inflation in the respected nation.
A perfect example of this is Japan. Who are conducting quantitative easing in attempts to reflate the
Japanese economy. Which over recent months has been responsible for weakening the yen and pushing
the country’s stock market sharply higher.
Secondly gold is making a bigger comeback from its south western neighbors, India. Asia in general are
witnessing one of the strongest waves of physical gold buying in thirty years, with the financial wizards
capitalizing on the drop of prices to secure jewellery and gold bars. It has also been reported that due
to the sudden rise in demand has left many Hong Kong’s banks, jewelers and even its gold exchange
without enough metal to meet demand.
The massive increase in buying across Asia contradict with sales report from last week, when plenty
of investors dumped billion dollars of gold related assets, yet a week later the more committed sales
people, such as Chow Tai Fook (biggest jeweler capitalist in Hong Kong) said that some stores in areas
popular with mainland Chinese tourists had sold out of gold bars. However Indian buyers had not
matched the levels of consumption of elsewhere in Asia as they waited for gold to drop below the key
local price point of rupees 25,000 per 10 grams.
Volume of the gold exchange jumped to a record high reaching 43 metric tones on the 19 th of April,
whole 12.6 tones more than April 19th 2012. Gold traders nonetheless reported stronger than usual
buying in India as bargain hunters feared that prices have bottomed and will start rising once again.
- China Dowry Filled With Gold Signals Gains for Jewelers – Bloomberg (bloomberg.com)
- HK man caught smuggling 4kg gold to China in his shoes (wantchinatimes.com)
- Chinese Gold Imports Soar To Monthly Record On Insatiable Demand (zerohedge.com)
- Chinese Gold Imports Soar To Monthly Record On Insatiable Demand (countdowntozerotimegoldnews.wordpress.com)
- Smart Asians Drive Gold Demand to 30 Year High (goldcore.com)
- Feverish Buying Demolishes Gold Inventories in Asia! (socioecohistory.wordpress.com)
- Hong Kong gold retailers overwhelmed by mainland shoppers (gata.org)