Gold Prices Tight Near $1300, Asian Trading "Lacking" with China Demand as India Goes to Polls
Monday, 4/07/2014 13:56
GOLD PRICES held tight around $1300 per ounce lunchtime Monday in London, after ticking $5 back from last week's close in very quiet China and Asian trade overnight.
Gold trading in Shanghai was closed for China's Ching Ming festival bank holiday.
Gold prices for other Western investors also ticked back from Friday's sharp rally following the latest US jobs data, as the US Dollar held flat on the currency market.
European stock markets meantime caught up with Friday's sharp drop in New York's tech-stock Nasdaq, with Germany's Dax dropping 1.5% by early afternoon in Frankfurt.
"With China out on holiday today, prospects for any price action were not great from the beginning," says the Asian trading desk of Swiss refining and finance group MKS.
"Opening volumes [on the Globex gold derivatives platform] were the lowest seen in weeks."
"Gold prices in China remain at a slight discount below the international price," says Jonathan Butler at Japanese conglomerate Mitsubishi, "indicating that physical demand in that market is lacking at present."
Today in India, formerly the world's heaviest gold-buying nation,
voting began in the month-long general election expected to see the ruling Congress Party replaced by the BJP of Narendra Modi.
Modi has publicly
backed India's gold trading and jewelry industries, which have called for 2013's effective ban on new imports to be overturned.
Gold prices in India held steady Monday, keeping the premium over London prices around $40 per ounce – sharply down from the record $150 premiums per ounce seen as the anti-import rules hit last summer.
Major gold-trading hub Dubai – a key transit point for gold bullion between Europe's refineries and Indian buyers – will see the launch of a spot gold price contract for kilobars this June, said Gary Anderson, chief executive of the Dubai Gold and Commodities Exchange, this morning.
The Middle Eastern state is also seeking to
tighten "supply chain evidence" for gold entering its markets, parent exchange the DMCC said Sunday, responding to whistle-blower accusations that gold refiner and jeweler Kaloti Group accepted metal from unknown sources.
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