Gold Futures Raid Leads To Extraordinary Demand For Bullion

Gold Futures Raid Leads To ‘Extraordinary’ Demand For Bullion Globally

Today’s AM fix was USD 1,414.00, EUR 1,080.46 and GBP 920.63 per ounce.
Yesterday’s AM fix was USD 1,397.00, EUR 1,070.17 and GBP 917.09 per ounce.

Gold rose $14.80 or 1.08% yesterday to $1,388.00/oz and silver ended with a loss of 0.26%.

Gold extended gains above $1,400 an ounce on signs that jewelers, investors and store of value buyers of gold are taking advantage of the biggest slump in prices in three decades.

Global demand for physical is very clearly seen in rising premiums being seen internationally. The drop in prices ignited a spate of buying in gold coins and bars, sending premiums for gold bars to multi-month highs throughout Asia. Demand intensifed overnight as prices rose over $1,400/oz.
GoldCore Market Performance Table
Indian gold premiums, always a good indicator of demand for physical have jumped due to tight supplies. Premiums charged by banks for gold has increased from around $1.20 to between $3 to $5 per ounce.

The premium for metal on the Shanghai Gold Exchange is up to as much as $10, in Turkey it’s almost $20 and in Asia it’s about $5. Premiums for gold bars in Hong Kong were at $1.90 to $2.00 an ounce to spot, their highest level since early last year. Premiums in Singapore and Tokyo were also at multi-month highs.

Government mints, bullion refineries and dealers around the world report a dramatic increase in demand for coins and bars.

Bullion refiner, MKS said that “physical demand is extraordinary.”
XAU/EUR Currency, 2 Weeks – (Bloomberg)
XAU/EUR Currency, 2 Weeks – (Bloomberg)

Digital gold provider, Bullion Vault, said that Monday and Tuesday were their “strongest 48 hour period for new customers this year.” Bullion Vault said that they saw record volumes of digital gold and silver transactions on Monday “beating the previous peak of September 2011.”

In terms of transactions, gold buyers outnumbered sellers by a ratio of nearly five to one yesterday. In terms of volume, gold buyers outnumbered sellers by a ratio of nearly nine to one yesterday. Meaning that there were more buyers than sellers and buyers were placing larger orders than those selling and this trend has continued today.

U.S. gold coins sales have been at record levels this week. Lower prices and the tragic events in Boston may have contributed to increased buying due to concerns about the risk of terrorist attacks.

Premiums are rising in Europe and the U.S. and there are delays of a few weeks on some smaller coins and bars showing the growing tightness in the market.

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