Gold News

Japan Sees Net Gold Buying for 1st Year in 10

Gold buying through No.1 retailer exceeds consumer sales, grows by two-thirds...
 
TANAKA KIKINZOKU, which operates the largest gold retail chain in Japan, said this week that gold buying through its stores in 2013 exceeded customer selling for the first time since 2004. 
 
Gold trading on the Tokyo Commodity Exchange also rose last year, again bucking a long trend of falling volumes.
 
Tocom gold trading peaked by weight in 2003, shortly after the price for buying gold in Japanese Yen turned higher from multi-decade lows.
 
The Yen price of gold bullion has since trebled, hitting 30-year highs in the winter of 2012-2013.
 
Japan's consumer price inflation rose to 1.2% by the end of last year, having been flat or falling for almost two decades.
 
Economists point to the so-called Abenomics policies of new prime minister Shinzo Abe, plus aggressive quantitative easing by the Bank of Japan. It plans to double Japan's base-money supply by 2015, killing deflation and driving annual inflation up to 2.0%.
 
"Investors have become concerned as Abenomics weakens the Yen," says brokerage Fujitomi's analyst Kazuhiko Saito, commenting to Bloomberg on the Tanaka data.
 
Record Yen gold prices at the start of 2013 dented demand to buy gold, and "encouraged further dishoarding", says the new Gold Survey 2013 Update from metals consultancy GFMS, part of the Thomson Reuters group.
 
But the nation's gold buying "returned to net demand, the first time since 2008," as prices then fell in line with global quotes amid the sharp sell-off by Western fund managers.
 
Furthermore, says GFMS, Japan's private gold buying "may have also [been] encouraged" in late 2013 by the coming sales-tax hike, set for April 2014 and taking the levy on new purchases from 5% to 8%  by value.
 
Overall, Japanese gold jewelry demand rose 8% last year from 2012. So-called "scrap" sales in contrast, meaning old or unwanted items sold back by households to raise cash, plus metal reclaimed from waste electronics, fell by almost one-eighth.

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