China’s 2010 implied gold demand at 600 tonnes

Gold is closing in on $1,400. With gold at these levels scraps gold is coming to the market once again. We expect selling from the physical market to provide resistance at these levels. The Shanghai Gold Exchange indicated China imported 210 tonnes in the first 10 months of 2010. During the same period in 2009 only 45 tonnes of gold was imported.

We believe China’s gold production in 2010 should be around 350 tonnes. Gold exports are not allowed to be exported out of China. If the pace of imports we saw during the first 10 months continues in November and December 2010, gold imports into China should be around 250 tonnes. This puts China’s 2010 implied gold demand at 600 tonnes. The same calculation puts
China’s 2009 implied demand at 346 tonnes. Therefore, China’s gold demand in 2010 looks set to increase 254 tonnes or 74%.

We note that there is likely to be illegal gold exports and imports from and to China. This would distort the actual gold numbers for China. However, the trend is undeniable — gold demand in China is rising rapidly. Like the US, real short-term interest rates remain negative in China. Low real interest rates support gold demand. As long as this is the case, we expect China’s demand for gold to rise.

Gold support is at $1,380 and $1,372. Resistance is at $1,396 and $1,405.

Comments

Post a Comment

Popular posts from this blog

Gold edges up on weaker dollar, dovish U.S. Fed policy bets

Image
 Gold edged higher on Monday, helped by a weaker dollar and expectations that the U.S. Federal Reserve will reiterate its dovish monetary policy stance this week. Spot gold was up by 0.1% at $1,943.58 per ounce. U.S. gold futures rose 0.1% to $1,950.10 per ounce. “Gold is firm on the basis that the Fed could adopt a further dovish message with respect to average inflation targeting,” said Michael Hewson, chief market analyst at CMC Markets UK. “If you want to have a policy of average inflation targeting, you’re going to have to go into detail as to how you are going to arrive at that particular outcome.” The dollar retreated on Mond ay, bolstering gold’s appeal for investors holding other currencies, ahead of the Fed’s policy decision due on Wednesday. “If inflation forecasts remain at 2% or below, this could offer gold a tailwind as the zero-yielding metal thrives in a low-interest rate environment,” said FXTM analyst Lukman Otunuga. Market participants are also waiting
Read more

Gold Price Futures (GC) Technical Analysis – Trader Reaction to Minor 50% Level at $1954.80 Sets the Tone

Image
  Gold futures closed lower on Thursday but up from its low of the session as investors battled a number of factors including U.S. economic data and outside market influences. Earlier in the session, gold fell over 1%, as positive economic data elevated hopes for a quick recovery while dampening the investment appeal of the precious metal. On Thursday, December Comex gold futures settled at $1937.40, down $11.60 or -0.60%. On the data front, a drop in U.S. jobless claims reported Thursday and positive manufacturing data reported earlier in the week are taking some shine off gold. A weaker Euro is also weighing on dollar-denominated gold by driving up thU.S. Dollar Index. U.S. weekly jobless claims fell below 1 million last week for the second time since the pandemic started, but did not signal a strong recovery in the labor market because the drop largely reflected a change in the methodology used to address seasonal fluctuations in data. Earlier in the week, a report s
Read more

India, not Trump, is the real reason behind the crash in gold prices

Image
If you have been puzzled about the crash in gold prices after Donald Trump's election, you are in the company of almost every analyst and media outlet in the western world. Gold and silver are a major part of the research at The Arora Report. A combination of our proven precious metal algorithms, extensive resources and knowledge of the emerging markets led us to alert subscribers to The Arora Report early that gold was about to crash and the reason behind it. Immediately after the election, the net position of The Arora Report in gold, silver and miners has been short as part of a sophisticated strategy.
Read more