End of week top gold news

Friday afternoon/21-Nov-2014

(Financial Times) Abenomics’ direction uncertain after GDP shock Less than two years ago, Shinzo Abe’s big idea was to boost Japan’s growth rate to about 3 per cent a year on a nominal basis and 2 per cent on a real basis, and then to use that momentum to repair the government’s stretched finances. That was the main objective of the incoming prime minister’s “three arrows” of flexible fiscal policy, loose monetary policy and a host of longer-term reforms.

Note: Instead, the economy cratered in Q2 to the tune of -7.3%, and the contraction continued in Q3, plunging Japan back into recession. Those “three arrows” seem to have missed their intended marks and hit the Japanese citizens right square in their collective お尻 (oshiri). The Abe government must have known recession would be confirmed, because they launched a preemptive further expansion of their QQE program last week. The next phase of the consumption tax hike has been pushed into 2017, and Abe has called a snap election for December. What a mess. And yet, even more QQE is likely in the offing.

(ZeroHedge) Gold & Silver Surge, Recover Swiss Gold Poll Losses As EURCHF Hits Lows It appears the FX and Precious Metals markets have as much faith in the pre-Swiss Gold Referendum polls as the Scots did before their referendum. The clearly leaked results sparked considerable weakness in gold and silver (and EURCHF surge), but once the data was released, markets began to creep back – perhaps questioning the plausibility of such a big swing in such a short amount of time. This surge was also helped by some unusually frank comments on Russian gold buying from the Russian Central Bank. Gold, Silver, and EURCHF have all recovered the moves with the latter pressing towards cycle lows…

Note: There was some intraday volatility in the price of gold in Wednesday. News that the latest poll on the Swiss gold referendum had suddenly swung in favor of rejection of the measure, dropped gold $20. However, the market quickly discounted the news and all of those losses were retraced and the yellow metal went on to make new three-week highs later in the week.

(Telegraph) ECB could buy gold to revive economy Gold, shares, and exchange-traded funds (ETFs) – the European Central Bank (ECB) may turn to buying any or all of these in an attempt to boost inflation in the currency bloc.

Note: In an interesting twist, the ECB is now saying it may buy gold as a means to create inflation, even as the Swiss are staring down the barrel of voter mandated gold purchases.

(Bloomberg) Gold Advances to Two-Week High as Russia Boosts Reserves Gold futures climbed to a two-week high topping $1,200 an ounce after Russia added to reserves, fueling speculation that a rebound in demand for bars, coins and jewelry will help stem this year’s drop. Russia’s central bank bought about 150 metric tons of gold this year, Governor Elvira Nabiullina told lawmakers today. That’s almost double 2013 purchases of 77 tons, International Monetary Fund data show.

Note: Russia has been on a gold buying spree for some time now. The recent acceleration in buying interest is thought to be an attempt to underpin the ruble and gird for ongoing economic sanctions.

(WSJ) Dutch Repatriate Some Gold Reserves The Dutch central bank said Friday it is repatriating some of its gold reserves from the U.S., making it the latest central bank in Europe to address public concerns about the safety of its gold. De Nederlandsche Bank, or DNB, said it is moving some of its reserves of 612 metric tons back to the Netherlands in an effort to spread its gold stock in “a more balanced way.” The measure could have “a positive effect on public confidence,” it said.

Note: This was another interesting surprise: Not so much the Dutch desire to get its gold back before the ECB and SNB possibly start buying, but more because they somehow got to jump in front of Germany, who made their repatriation request nearly two-years ago!

(CNBC) Central banks: The new gold bugs? “Gold’s sudden increase in price took the markets by surprise Tuesday, and it could be policy plans by the world’s central banks that are driving the precious metal ever higher.”

Note: This headline sort of sums up the previous ones. Central banks have been net buyers of gold since 2009 (after being net sellers for decades). The central banks’ heightened interest in the yellow metal may have helped form a base.

Posted in all posts, Gold News, Gold Views |

Dutch central bank repatriates some gold reserves

21-Nov (MarketWatch) — The Dutch central bank said Friday it is repatriating some of its gold reserves from the U.S., making it the latest central bank in Europe to address public concerns about the safety of its gold.

De Nederlandsche Bank, or DNB, said it is moving some of its reserves of 612 metric tons back to the Netherlands in an effort to spread its gold stock in “a more balanced way.” The measure could have “a positive effect on public confidence,” it said.

[source]

Posted in all posts, Gold News, Gold Views |

Gold: worth its weight?

Ordinary people are unnerved about how money works in a bottomless cyber space. Gold seems tangible, clear and timeless

21-Nov (Financial Times) — A decade ago, when Alan Greenspan was chairman of the mighty Federal Reserve, he was infamous for delivering ambiguous, Delphic speeches that nobody could understand. No longer. I recently had a chance to interview Greenspan, 88, at the Council on Foreign Relations, regarding an updated version of his latest book.

These days the retired Greenspan speaks so clearly that some of his words are still ricocheting around the blogosphere. For what he revealed on the CFR platform was that he harbours considerable doubts about whether recent western monetary policy experiments have actually helped economic growth. He also fears that such experiments have been so wild that it will be very hard to exit from these policies in the future – in the US or anywhere else – without sparking huge market volatility. Indeed, Greenspan is so worried about future turbulence that he apparently sympathises with investors (and central banks) who are currently stocking up on gold.

“Why do central banks put money into an asset which has no rate of return, but [has] cost of storage and insurance and everything else like that? Why are they doing that?” he asked rhetorically – before offering his own explanation. “Gold is a currency. It is still, by all evidence, a premier currency. No fiat currency, including the dollar, can match it.”

[source]

If you haven’t done so already, please be sure to read Mike Kosares’ piece: The Reinvention of Alan Greenspan

Posted in Gold News, Gold Views |

The Daily Market Report: Gold Jumps to 3-Week High on Dutch Repatriation, More Central Bank Easing


21-Nov (USAGOLD) — Gold firmed in overseas trading on Friday to establish a new three-week high at 1207.85 on news that the Netherlands repatriated some of its gold reserves from the New York Fed. While the yellow metal subsequently dipped back below $1200 intraday, that move was likely a result of profit taking ahead of the weekend.

The Dutch central bank announced Friday that it had removed 122 tonnes of gold from the NY Fed vaults and returned it to the Netherlands via ship. The DNB statement suggested the repatriation could have “a positive effect on public confidence.”

What’s particularly interesting about this surprise is that little-ol’ Holland somehow managed to jump in front of Germany in extracting their gold from the Fed. You may recall that Germany requested back in 2013 that 300 tonnes of gold be repatriated. After nearly two-years, a disturbingly small percentage has actually been returned.

And what pray tell garners the privileged of cutting the line ahead of Germany? Inquiring minds…

If the Swiss gold referendum passes on 30-Nov the Swiss too will be looking to repatriate gold, as well as buying gold to boost their reserves from the current level of 8% to 20%. The Dutch may have been thinking that the time to get their gold is now…while there’s still gold to be gotten.

Providing additional support to the yellow metal was fresh monetary easing by the PBoC. Easier money in the country that is the world’s largest consumer of gold is being seen as a generally favorable turn of events. Additionally, we heard more dovish jawboning by ECB President Mario Draghi; yet another pledge that the ECB would do whatever is necessary to manufacture inflation.

“We will do what we must to raise inflation and inflation expectations as fast as possible, as our price-stability mandate requires,” said Mr. Draghi. The addition of the time element suggests a sense of added urgency as the currency wars continue.

Posted in Daily Market Report, Gold News, Gold Views |

Gold Repatriation Stunner: Dutch Central Bank Secretly Withdrew 122 Tons Of Gold From The New York Fed

21-Nov (ZeroHedge) — A week ago, we penned “The Real Reason Why Germany Halted Its Gold Repatriation From The NY Fed”, in which we got, for the first time ever, an admission by an official source, namely the bank that knows everything that takes place in Germany – Deutsche Bank – what the real reason was for Germany’s gold repatriation halt after obtaining a meager 5 tons from the NY Fed:

… the gold community paid great attention to the decision of the German Bundesbank to “bring German gold home”. At the beginning of 2013, the Bundesbank announced it would repatriate 300 tonnes of gold stored in the US by 2020. It is well behind schedule, citing logistical difficulties. Yet diplomatic difficulties are more likely to be the chief cause of the delay, especially seeing as the Bundesbank has proven its capacity to organise large-scale gold transports. In the early 2000s, the Bundesbank incrementally repatriated 930 tonnes of German gold held by the Bank of England.

Some took offense with this, pointing out, accurately, that the gold held at the NY Fed in deposit form for foreign institutions had continued to decline into 2014 despite the alleged German halt. Well, today we know the answer: it wasn’t Germany who was secretly withdrawing gold from the NYFed contrary to what it had publicly disclosed.

It was the Netherlands.

This is the stunning statement made by the Dutch Central Bank earlier today, and which, all compliments to China’s rate cut, is truly the biggest news of the day, as it shows that one doesn’t need a referendum to repatriate their gold, nor does one run into logistic or diplomatic problems if one is truly set on procuring their physical.

As to why the DNB decided it was time to cut its gold held at the NY Fed by 122 tons? “”It is no longer wise to keep half of our gold in one part of the world,” a DNB spokesman told Telegraaf. “Maybe it was desirable during the Cold War, but not now.”

[source]

Posted in Gold News, Gold Views |

RBI cautious on response to gold import surge

21-Nov (Reuters) — The Reserve Bank of India, grabbling with a surge in gold imports last month, could support some restrictions for trading houses but two senior policymakers involved in the bank’s decision-making said officials were also wary of overreacting.

India, the world’s second-largest gold consumer over the past year, is wrestling with its response to a fourfold jump in gold imports in October. That spike raised fresh concerns over the strain to the country’s balance of payments.

A senior finance ministry source told Reuters on Tuesday the country would soon announce measures set to center on import restrictions for private trading house that were eased earlier this year. Private jewellery exporters account for the bulk of demand for gold.

But the country has yet to announce any steps, and the two policymakers said on Friday there was no agreement yet.

“No decision has yet been taken on curbing gold imports,” said one of the policy makers, who declined to be named.

[source]

Posted in all posts, Gold News, Gold Views |

Gold: It’s Time to Buy


By Michael Kahn
19-Nov (Barron’s) — Over the years, I have made some bold calls on gold and often the pushback from those not sharing my views has been rather vigorous, to put it mildly. It’s time to once again risk the wrath of the haters and say that gold finally looks ready for a recovery.

No, I am not saying it is heading back up to its 2011 peak above $1,900 an ounce, at least not for the foreseeable future (it traded at $1,195 Wednesday afternoon). However, I do think in the long term we will see an important bull market return.

For the here and now, a potential reversion back to its 200-day moving average in the $1,250 area would indeed be a good first step on the road to serious recovery. If and when it gets there, we will likely see the chart set up for a run back to $1,500. We’ll look at that chart below.

[source]

Posted in Gold News, Gold Views |

Gold rallies to 3-week high after surprise China rate cut


21-Nov (Reuters) – Gold climbed back above $1,200 an ounce on Friday after a surprise rate cut by China fuelled expectations demand could rise in the world’s biggest gold consumer.

China cut its benchmark interest rates for the first time in more than two years on Friday to lower borrowing costs and lift a cooling economy that is on track for its slackest annual growth in 24 years.

“Any measures that accelerate the spending power of the Chinese public are bound to be positive for gold,” Mitsubishi analyst Jonathan Butler said.

“(This could mean) additional spending power for Chinese consumers to buy jewellery and investment products.”

[source]

Posted in Gold News, Gold Views |

Draghi Says ECB Must Raise Inflation as Fast as Possible

21-Nov (Bloomberg) — Mario Draghi strengthened his stimulus pledge for the euro area by saying the European Central Bank can’t hold back in its fight to revive the economy.

“We will do what we must to raise inflation and inflation expectations as fast as possible, as our price-stability mandate requires,” the ECB president said at a conference in Frankfurt today. Some inflation expectations “have been declining to levels that I would deem excessively low,” he said.

With the next policy meeting less than two weeks away and the region remaining close to economic stagnation, Draghi may need to step up efforts to convince investors he’s serious about reigniting growth and inflation. The euro fell and bond yields dropped on speculation the central bank is closer to buying government debt in a full-scale quantitative-easing program.

Draghi is sending a clear signal that more stimulus is coming,” said Lena Komileva, chief economist at G Plus Economics Ltd. in London. “If the ECB’s current measures prove underwhelming and inflation expectations fail to recover, the ECB will act to expand QE.”

[source]

Posted in Central Banks, Monetary Policy, QE |

China’s PBOC Cuts Interest Rates for First Time Since 2012

21-Nov (Bloomberg) — China cut benchmark interest rates for the first time since July 2012 as leaders step up support for the world’s second-largest economy, sending global shares, oil and metals prices higher.

The one-year lending rate was reduced by 0.4 percentage point to 5.6 percent, while the one-year deposit rate was lowered by 0.25 percentage point to 2.75 percent, effective tomorrow, the People’s Bank of China said on its website today.

The reduction puts China on the side of the European Central Bank and Bank of Japan in deploying fresh stimulus and contrasts with the Federal Reserve, which has stopped its quantitative easing program. Until today, the PBOC had focused on selective monetary easing and liquidity injections as China heads for its slowest full-year growth since 1990.

[source]

Posted in Central Banks, Monetary Policy |

The Daily Market Report: Gold Underpinned As Currency Wars Rage On


20-Nov (USAGOLD) — Gold pushed higher in overseas trading on Thursday, after snapping back from intraday losses on Wednesday. The yellow metal remains firm, at the high end of the recent range.

A mixed bag of U.S. data today didn’t seem to have much influence on the price of gold. The dollar remains underpinned, which may be inhibiting a sustained push back above $1200. Offering support, is physical demand, particularly from Russia. The Swiss gold initiative continues to underpin, even as new polling that came out yesterday knocked the yellow metal briefly. Recent hints that the ECB may buy gold is supportive as well.

The yen is getting slammed again, reaching a seven-year low against the dollar, after Japan was confirmed to be back in recession earlier in the week. Prime Minister Shinzo Abe has called a snap-election for December, where he will seek a mandate to continue down the ‘Abenomics’ path. While his LDP party will assuredly lose seats, the fragmented opposition likely means that, Abe will retain power and the ongoing destruction of the yen will continue.

Where the first iteration of Abenomics was an ‘everything except the kitchen-sink approach’, Abe tossed the kitchen-sink in with the even greater expansion of the monetary base announced last week. If the LDP retains control after the snap-election — as it likely will — Abe will tear the pipes from the wall and dig up the main line as well.

If I were Japanese, I would be buying gold hand-over-fist right now, in an effort to protect myself from the ongoing debasement of the yen. But while, nobody is wrecking their currency better than the Japanese these days, keep in mind that debasement is the natural state of fiat currency. The Europeans want a weaker euro. The Swiss want a weaker franc (see SNB enforced EUR-CHF floor). The Brits want a weaker pound. And policymakers here in America want a weaker dollar.

The currency wars are raging. Protect yourself with gold.

Posted in Daily Market Report, Gold News, Gold Views |

US existing home sales +1.5% to 5.26M in Oct, above expectations of 5.15M, vs positive revised 5.18M in Sep.

Posted in Economic Data |

Philadelphia Fed Index surged to 40.8 in Nov, well above expectations of 18.3, vs 20.7 in Oct.

Posted in Economic Data |

US leading indicators +0.9% in Oct , above expectations of +0.5%, vs 0.8% in Sep.

Posted in Economic Data |

US Markit flash PMI dropped to 54.7 in Nov, below expectations of 56.3, vs 55.9 in Oct.

Posted in Economic Data |

Goldman Fires Two Bankers After Getting Secret Fed Documents

20-Nov (Bloomberg) — Goldman Sachs Group Inc. (GS) dismissed two bankers after one of them allegedly brought secret documents from the Federal Reserve Bank of New York into the firm.

A junior banker, who had joined the company in July from the New York Fed, was fired a week after the discovery in late September along with another employee who failed to escalate the issue, according to an internal memo obtained by Bloomberg News that didn’t identify the pair. Jake Siewert, a bank spokesman, confirmed the contents of the memo, which was prompted by a report yesterday in the New York Times.

“We have zero tolerance for improper handling of confidential information,” Goldman Sachs said in the memo. “We are reviewing our policies regarding any hiring from governmental institutions to ensure that they are appropriately effective and robust.”

The bank and the New York Fed have faced questions about their relationship since a former examiner, Carmen Segarra, said her ex-colleagues at the regulator were too deferential in their oversight of the New York-based firm. She gave what she said were secretly recorded conversations with those co-workers to the radio program “This American Life” in September.

…The New York Fed also fired an employee it suspected of sharing information with the banker, the Times reported. The regulator said in a statement that it has “zero tolerance” for personnel who don’t safeguard confidential information.

[source]

PG View: The revolving door between the Fed (and other regulators) and Wall Street presents all sorts of potential for abuse, which tends to catch the average investor right in the middle.

Posted in all posts, Central Banks |

Russia Boosted Gold Reserves Last Month as Prices Declined

20-Nov (Bloomberg) — Russia bought about 19.7 metric tons of gold last month as the world’s fifth-biggest holder added metal to its reserves amid a weaker ruble and lower oil prices.

Holdings rose to 37.6 million ounces, or about 1,169.5 tons, the central bank said today on its website, taking this year’s purchases by the end of October to 134.3 tons, according to Bloomberg calculations based on International Monetary Fund data. About 150 tons have been bought in 2014, central bank Governor Elvira Nabiullina told lawmakers two days ago. That indicates another 15.7 tons or so were added so far this month.

The central bank has used its international reserves to stem the ruble’s slide as sanctions accelerated capital flight and inflation. Policy makers increased interest rates last month for a fourth time since March to help slow inflation. Russia has tripled its gold reserves since 2005 and now holds about 1,185 tons, according to Bloomberg calculations based on the most recent IMF data and Nabiullina’s estimate.

“This is an attempt to reduce the risks,” Vladimir Tikhomirov, chief economist at BCS Financial Group in Moscow, said before the release. “There is a risk present that at a certain point the west may decide to freeze or limit accounts of the Russian government abroad.”

[source]

Posted in Gold News, Gold Views |

US CPI unch in Oct, above expectations of -0.1%, vs -0.1% in Sep; +1.7% y/y. Core +0.2%, above expectations of +0.1%; +1.8% y/y.

Posted in Economic Data |

US initial jobless claims -2k to 291k in the week ended 15-Nov, above expectations of 280k, vs upward revised 293k in previous week.

Posted in Economic Data |

Gold higher at 1190.75 (+8.74). Silver 16.14 (+0.016). Dollar firms. Euro lower. Stocks called lower. US 10yr 2.32% (-4 bps).

Posted in all posts |

Swiss Gold Initiative: Good Idea With Unintended Consequences

by Keith Weiner
19-Nov (Forbes) — There is now a very interesting initiative on the Swiss ballot, which will require the Swiss National Bank (SNB) to hold 20 percent of its reserves in gold. The voters will decide on November 30. I won’t predict the vote, but I want to discuss the likely impact of a yes vote.

…There is a key flaw in our system of floating currencies. Every financial asset is someone’s liability. When a currency moves, it creates winners and losers. Big moves can harm banks with loan portfolios outside their home.

…Unfortunately the regime of paper money imposes a bitter dilemma on the Swiss people. They have a choice of slow losses by devaluation, or total losses by bankruptcy. They deserve a better option, a practical roadmap to the gold standard.

[source]

Posted in Gold News, Gold Views |

The Daily Market Report: Gold Drops on Swiss Referendum Expectations, But Recovers


19-Nov (USAGOLD) — Gold began the day fairly well contained, just off the three-week highs that were established on Tuesday at 1204.70. Later in the morning, a bout of volatility ensued as a result of new polling on the Swiss gold initiative.

Gold dropped sharply intraday amid reports that the latest polling in the Swiss measure had basically flip-flopped; from an edge toward passage to an edge toward rejection. A poll conducted by Swiss TV SFG showed those against the measure were at 47%, while those in favor had dropped to 38%. That’s a pretty dramatic shift from a recent poll that was 44% in favor, and 39% against.

One of the contributing factors to gold’s recent rebound was certainly the chance that Switzerland would not only be repatriating their existing gold reserves, but doubling those reserves over the next five-years. The shift in expectations based on the most recent poll, spooked some longs, driving the market down more than $20 in a very short period of time. However, either the polling was discounted, or maybe some remaining shorts in the market saw it as an opportunity to square up, because the yellow metal came roaring right back.

U.S. investors are probably aware as any right now — coming off the recent mid-term elections — just how off the mark polling can be at times. The measure may still pass and as we learned earlier in the week, the Swiss may be competing with the ECB in building their gold reserves.

The minutes from the last FOMC meeting show that the Fed is perhaps getting modestly more comfortable with growth and labor market prospects. However, they have perhaps a slightly greater concern about inflation expectations. They kept the “considerable time” language because of a fear that the market would interpret its removal as a “significant” shift in policy.

Shinzo Abe’s LDP party is expected to lose seats in the December election that he called this week, but is still expected to retain enough power to proceed with his destruction of the yen. A U.S. thin-tank believes 20-30 seats will be lost, but a WSJ article suggests his coalition could cling to a majority even if more than 80 seats were lost.

Posted in Daily Market Report, Gold News, Gold Views |

Gold & Silver Surge, Recover Swiss Gold Poll Losses As EURCHF Hits Lows

19-Nov (ZeroHedge) — It appears the FX and Precious Metals markets have as much faith in the pre-Swiss Gold Referendum polls as the Scots did before their referendum. The clearly leaked results sparked considerable weakness in gold and silver (and EURCHF surge), but once the data was released, markets began to creep back – perhaps questioning the plausibility of such a big swing in such a short amount of time. This surge was also helped by some unusually frank comments on Russian gold buying from the Russian Central Bank.  Gold, Silver, and EURCHF have all recovered the moves with the latter pressing towads cycle lows.

[source]

Posted in Gold News, Gold Views |

Gold now higher on the day, retracing all of the Swiss gold referendum poll related intraday losses.

Posted in Gold News, Gold Views |

Gold dropped sharply intraday on latest Swiss gold referendum polling

19-Nov (USAGOLD) — Gold dropped sharply intraday on a report from Swiss TV SFG, picked up by Bloomberg, that polling on the Swiss gold referendum had flipped.

 

The move appears related to headlines crossing Bloomberg that said a new poll from Swiss TV (SRF) shows 47% of voters are seen rejecting a measure that would require Switzerland to hold 20% of its $547 billion in assets in gold. — Business Insider

A previous poll had shown those in favor at 44% and those opposed at 39%.

Posted in Gold News |

US housing starts -2.8% to 1.009M in Oct, below expectations of 1.028M, vs positive revised 1.038M in Sep.

Posted in Economic Data |

Gold retreats from near 3-week high ahead of Fed minutes

19-Nov (Reuters) – Gold dipped on Wednesday as traders awaited Federal Reserve minutes later in the day and an opinion poll ahead of next week’s Swiss gold referendum, with dollar strength pulling prices back from near three-week highs.

Spot gold was at $1,195.80 an ounce at 1251 GMT, down 0.1 percent, while U.S. gold futures for December delivery were down $1.70 an ounce at $1,195.40.

On Tuesday gold peaked at $1,204.70, its highest since Oct. 30, having slid to a 4-1/2 year low of $1,131.85 this month.

“What we’ve seen is a bit of short covering, because people had thought gold prices would fall further … and that didn’t happen,” LBBW analyst Thorsten Proettel said.

[source]

Posted in Gold News, Gold Views |

Gold steady at 1194.78 (-0.26). Silver 16.23 (+.088). Dollar and euro steady. Stocks called lower. US 10yr 2.34% (+2 bps).

Posted in all posts |

India Precious Metals Import Explodes In October

17-Nov (BullionStar) — Despite all efforts from the Indian government to curtail India’s demand for precious metals – for example a 10 % import duty on both gold and silver, the Indian people continue to put their savings in a store of value they consider being prudent; precious metals.

By hiking the import duty on gold in 2013 from 4 % to 10 % and the implementation of the 80/20 rule importers were thwarted shipping in metal. In part because the importers needed to find out how to work through the new rules, which were deliberately setup to complicate the process.

At first official gold import dropped like a brick, the premium on gold over London spot sky rocketed to 25 % and smuggling flourished.

Since 2014 India’s customs department, the DGCIS, discloses preliminary estimates on commodity trade data (only imports for precious metals). The latest data shows gross gold import in October jumped to 106 tonnes, up 13 % m/m, up 260 % y/y. 106 tonnes gross import is 1,271 tonnes annualized.

[source]

Posted in Gold News, Gold Views |

Gold Advances to Two-Week High as Russia Boosts Reserves

18-Nov (Bloomberg) — Gold climbed to the highest in two weeks after Russia said it added more bullion to its reserves, fueling speculation that a rebound in physical demand will help stem this year’s rout.

Russia’s central bank has bought about 150 metric tons of gold this year, Governor Elvira Nabiullina told lawmakers today. That’s almost double purchases of about 77 tons in 2013, International Monetary Fund data show. It also implies the nation bought about 35 tons since the end of September as gold prices fell about 3 percent last month and reached a four-year low on Nov. 7.

As futures head for the first two-year slump in more than a decade, coin, bar and jewelry buyers are starting to step in. While bullion demand fell to the lowest in almost five years in the third quarter, central banks may increase their purchases by as much as 22 percent in 2014, the World Gold Council estimates.

“The fact that Russia is buying more gold instead of diversifying into another currency or buying more dollars is a big positive,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview.

…European Central Bank President Mario Draghi said yesterday that unconventional measures to stimulate the economy may include purchase of a variety of assets. The central bank could theoretically buy sovereign debt, gold, exchange-traded funds, and even real estate to counter a longer period of low inflation, Executive Board member Yves Mersch said, while warning against rushing in.

[source]

Posted in Central Banks, Gold News, Gold Views |