Asians Back In The Gold Market Hunting Bargains

Asians Back In The Gold Market Hunting Bargains

$GLD, $PPLT, $BCS

Gold traders in China and India made the most of the availability of the cheap precious Yellow metal.

Last July, Gold fell to a 5.5 year low below 1,100 in July and averaged 1,117 during August.

Net Gold imports from Hong Kong rose to 59.3 tonnes in August the 3rd increase in a row, according to Hong Kong Census and Statistics Department. Imports from Switzerland also rebounded bringing total imports for the month to close to 80 tonnes.

Hong Kong traditionally accounted for the bulk of imports into China, but Shanghai and Beijing are becoming important centers for the Gold trade, so add substantial tonnage to those totals.

Long the top importer of Gold, India fell behind China in Y 2013, but August data from the sub-continent shows even more robust demand than its neighbor to the North.

Despite measures by the Indian government to curb Gold imports, official trade data shows Bullion imports more than 2X’d to $4.95-B or 140 tonnes in August compared to 89 tonnes in July.

India’s August total is up from just over $2-B or 50 tonnes in the same month last year and is about the equivalent of the last 6 months’ net redemption’s of physically-backed Gold ETFs (exchange traded funds) like (NYSEArca:GLD)

Tuesday Gold’s post-Fed rally was fading with futures in New York exchanging hands for 1,127 putting Gold back on the bargain shelf, but the picture is being complicated by the dive in Platinum, which hit a 7-year low Tuesday.

A research note yesterday from investment bank Barclays (NYSE:BCS) argues that the declining Platinum (NYSEArca:PPLT) price could drive physical demand of Platinum in jewelry, as follows: “Currently, platinum/gold is trading the lowest level in more than 25 years. Although the diesel-engine scandal has a limited direct effect on gold, the price ratio between platinum and gold can affect jewelry demand, shifting some from gold into platinum, especially in markets such as China, where there is a preference for platinum jewelry,” the analysts wrote.

Stay tuned…

HeffX-LTN

Paul Ebeling

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