Gold News

Gold Bullion Hits 12-Week High as China's Stock Market Dumps 6%, Silver ETF Shrinks Again

GOLD BULLION started London trade at a 12-week high against the US Dollar on Tuesday, rising 1.8% for the week so far as Asian stock markets slumped once more with commodity prices.
 
As gold hit $1117 per ounce ahead of tomorrow's interest-rate decision from the US Fed, silver touched its highest level since early December at $14.45 per ounce, before also easing back as crude oil steadied and European stock markets crept higher.
 
After New York closed 1.5% lower last night, China's equity market sank another 6% this morning, wth Tokyo and Hong Kong losing 2.3% each.
 
World stock markets have now accelerated their drop to 18% from last May's new all-time high on the MSCI index.
 
MSCI World Index, daily chart since 1969
 
"Rallies" in gold bullion, in contrast, "have now eroded the 100-day moving average at $1105," says German financial group Commerzbank's weekly technical analysis, "and we would treat a close above here as the next upside trigger for a move to the...200-day ma at $1132.
 
"This is our minimum objective. Longer term we expect to see a challenge to the $1192 October 2015 high, and the $1205 [per ounce] 2014-2016 resistance line."
 
"We have been watching this $1110 level for confirmation of a bullish cycle," says Canada's Scotiabank in its daily technical analysis of the gold price, also "looking for an initial move to $1135."
 
Priced in British Pounds, gold bullion today touched its best level since May, rising to £785 per ounce after Bank of England boss Mark Carney told UK lawmakers in regular testimony that – contrary to hints he gave last year – "the conditions required for an interest rate hike are not yet in place."
 
Gold prices in China – the world's No.1 miner and importer of gold bullion – today tracked global 'spot' quotes 1.3% higher as Chinese equities sank, reaching their highest Yuan level since end-October on solid volume at the Shanghai Gold Exchange.
 
Total gold bullion imports to China through Hong Kong rose 5.9% last year, new data said today, reaching 861.7 tonnes – equal to more than one ounce in every four of 2015's record-high global gold mining output, but remaining 25% below 2013's record as direct shipments to Shanghai continued to grow.
 
Monday's 0.6% gain in Dollar gold prices meantime saw investor demand for shares in the giant SPDR Gold Trust (NYSEArca:GLD) unchanged at an 11-week high, needing 664 tonnes of bullion to back their value.
 
But silver's largest ETF shrank again however, with shareholders now quitting 2.3% of the iShares Silver Trust (NYSEArca:SLV) since New Year. 
 
Forcing an outflow of 226 tonnes so far this month, that's taken the SLV's bullion holdings down to new 3-year lows of 9,662 tonnes.

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.

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