THE VOLUME of gold dealing done through London's wholesale market fell by 4.8% in January from a month earlier, new figures published this by trade body the London Bullion Market Association show.
The average daily volume of gold transferred between market-making LBMA members, who quote prices to buy and sell throughout the day, fell to 20.8 million ounces (647 tonnes) in January. The average daily value of gold dealing done between LBMA market making members fell 5.7% to $34.7 billion, while the number of transfers fell 5.8% to 2686.
"The weakness in demand was caused by a number of factors," says the monthly LBMA Clearing Statistics report, "including funds shifting away from purchasing gold as a result of volatility easing...and portfolio managers diverting interest away from gold towards higher yield investments."
There was however some support for gold dealing volumes as a result of demand from China.
"Downside was limited as a result of strong buying from the Chinese banks ahead of the Chinese New year," the LBMA said.
In contrast with gold, "there was continued strong demand for silver in January," the report says.
The total number of silver ounces transferred rose for the third month running, gaining 13% from a month earlier to 151.7 million ounces (4718 tonnes).Although the daily average number of transfers between members actually fell, dropping 6.3% to 764, their value rose 10% to $4.7 billion as a result of the increased volume.
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