Gold News

Russia Continues to Buy Gold as Price Recovers $20 Swiss 'No' Drop, Most Gold Miners Now 'Under Water'

BUY GOLD bids rose Thursday morning in London, recovering most of yesterday's $20 swing as the Dollar slipped on the currency market after mixed US inflation data.
 
Consumer prices slipped from September faster than forecast last month on the Bureau of Labor Statistics' index.
 
But on the seasonally adjusted index, and excluding "volatile" food and fuel costs, annual inflation rose to 1.8% near the upper-end of the last two years' pace.
 
Wednesday's minutes from the latest US Federal Reserve meeting "left no-one in any doubt," reckons one bullion-market analyst, "about their will to continue normalizing monetary policy."
 
"The precious metals will continue," says another, "to be guided by Dollar moves on the whole.
 
"Gold seems to have found a ceiling for the time being around $1200 and a floor around $1175."
 
Wednesday's $20 drop and bounce came on opinion polls showing that Swiss citizens are set to vote against all 3 questions in next week's referendum, turning down plans to cap immigration, raise taxes on wealthy foreign residents, and forced the Swiss National Bank to buy gold and never sell it again.
 
Russia's central bank continued to buy gold in October, new data showed today, adding 1.6% to reach 1,170 tonnes of bullion reserves.
 
Central-bank governor Elvira Nabiullina announced to the lower house of Russia's Duma on Tuesday that the state has added 150 tonnes of gold so far this year.
 
India's surge in demand to buy gold, meantime, has not yet led the government to decide on fresh anti-import rules, a Finance Ministry spokesman is quoted today by the Financial Times – contradicting Wall Street Journal and Reuters quotes from a "source" earlier this week that new curbs were due "as soon as [last] Tuesday."
 
Gold industry trade body the All India Gems & Jewellery Trade Federation (GJF) asked its members to cease selling investment coin and bar on Wednesday.
 
The government "have not taken the final decision so far," the FT quotes the Finance Ministry's D.S.Malik.
 
Prices to buy wholesale gold through the Shanghai Gold Exchange today edged lower in Yuan terms, but Chinese premiums – over and above comparable London quotes – rose to a 1-week high of $2.60 per ounce by the close of trade.
 
South African-based Gold Fields (JSE:GFI) – the world's 7th largest gold mining business – meantime posted third-quarter profits down 22% from the spring, but said it could "ride through" this month's price drop to new 4.5-year lows because its all-in break-even cost is $1090 per ounce, including repaying debt.
 
Market prices to buy gold bottomed on 7 November at $1132 per ounce.
 
"The industry [however] by and large is under water," CEO Nick Holland went on, forecasting "further writedowns" and "curtailed production...but it will take some time to filter through."
 
Major refiner Johnson Matthey (LON:JMAT) today said its underlying profits grew 10% year-on-year in Q3, but revenues for its precious metals business fell by one third.

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

Follow Us

Facebook Youtube Twitter LinkedIn

 

 

Market Fundamentals