Gold turns lower in follow-up to Friday’s surprise rally
A gold rush is underway in India – festival demand up 595% over last year

(USAGOLD –10/24/2022) – Gold turned lower to start the week after Friday’s surprise rally driven by the growing perception that problems in the global bond market might force the Fed to ease off the monetary brakes. It is down $8 at $1652. Silver is down 25¢ at $19.24. The incongruously low paper price of gold in the face of the current global economic turmoil is creating shortages and driving up premiums for the physical metal in key Asian markets.

On China’s Shanghai Exchange, for example, gold bullion is running about $43 per ounce over US prices, according to the World Gold Council. As a result, major wholesale bullion suppliers like Standard Chartered and JP Morgan are channeling metal to China. India’s on-hand stockpiles are now at 10% of where they are typically this time of year, according to Tribune India. The resulting shortage, it reports, could “force Indian buyers to start paying hefty premiums for supplies in the approaching peak-demand season.” Over this past weekend, Business Standard reported a gold rush is underway in India, with festival jewelry orders jumping 595% over last year.

Gold in Indian rupee, Chinese yuan, US dollars
(%, year to date)
overlay chart showing the price of gold in India rupee, Chinese yuan and US follar year to date
Chart courtesy of TradingView.com

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