Posts Tagged ‘price of gold’
Gold bullion imports from Hong Kong into mainland China increased 600% in May 2012 when compared to May 2011! (Source: Bloomberg, July 9, 2012.)
China is set to take the lead from India as the largest purchaser of gold bullion in 2012. The World Gold Council estimates that China will buy at least 870 tons of gold bullion in 2012.
Just to give an idea of how large these purchases of gold bullion are, in the first five months of 2012, China has imported over 300 tons of gold bullion from Hong Kong. Just isolating this number alone would put China as the 17th largest holder of gold bullion in the world!
As I’ve been writing in these pages, as the price of gold has fallen, China has provided money to its gold miners, which they in turn have used to buy other gold miners around the world. These Chinese gold mining companies then bring the gold bullion back in the country, but the statistics surrounding these imports are not published.
The only reason why we know of China’s insatiable demand for gold bullion is that it is Hong Kong that publishes the statistics quoted above.
As of a few years ago, China also banned the export of its gold bullion. The country had the capacity to pull roughly 390 tons of the yellow metal out of the ground, but has kept it all for itself.
Despite the country’s concerted effort to buy as much gold bullion as possible, the price of gold remains in a trading range. One of the factors holding the price of gold down is India…. Read More
In the classic nursery tale “Goldilocks and the Three Bears,” first put in written form by British author Robert Southey, Goldilocks ran when she came face to face with the bears. On the price charts, gold is also now facing a bear market; but will gold also run away and tank?
Looking at the chart of the June gold, the picture is extremely bearish following the recent break below $1,600 and the subsequent failure to hold at $1,550. In fact, it has been a big and steady decline since trading at a record contract high of $1,928.30 on September 6, 2011, and just below $1,800 in late February. With the decline, the June gold currently sits at 20.33% below its September price and officially in a bear market and trend reversal.
Gold failed to hold on to its base with support at $1,620 and has broken lower. Now the key is to watch if gold can hold at $1,500 to $1,525 on the extreme oversold technical condition.
The June gold is below its 200-day moving average (MA) of $1,701 and 50-day MA of $1,648. There is a bearish death cross on the chart, so there could be more weakness.
The threat now is the 11-year streak, as gold is down nearly two percent this year.
While gold is in a technical bear market, I’m not ready to give up, but then I would also be more careful in adding gold positions whether in physical gold or gold-based stocks. The reality is that the current technical picture is bearish and void of any buying interest.
The downside break at the … Read More
The New York-based Conference Board’s household sentiment index has slumped to the lowest level since March of 2009… But hold on…don’t dismiss it as more bad news! It’s actually good news. Sure the U.S. unemployment rate has held at about nine percent for about 30 months now. Sure, 8.75 million jobs were lost in the recession that ended in June 2009. And, with only about two million jobs created since the recession ended, the unemployment picture is not looking good. How can consumer confidence not be taking a beating?
I think it’s very reasonable to say that the stock market is fairly valued at this time. A lot of news, risks and revised expectations are now priced into the market and share prices reflect all the current information. There’s good value in many stocks at this time, but the question is: how long will they remain good values? Another month or perhaps another year? Nobody knows the answer.
While the price of gold and price of silver continue to be very strong, a lot of gold stocks and silver stocks have been pulling back in price. It’s a reflection of the current state of things, with investor sentiment seemingly stuck in a rut. We’re in a market with so much uncertainty that any call is valid and all outcomes are plausible. The stock market could completely fall apart, stay the same, or advance. A market malaise has set in and it’s almost entirely due to the sovereign debt situation.
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