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Weak China Data Sees Gold Prices Sink 2.7% on Anniversary of Worst Crash in 3 Decades


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GOLD PRICES fell hard Tuesday lunchtime in London, dropping 2.7% on the 1st anniversary of the worst gold price crash in 30 years as new data from China showed a marked slowdown in money-supply growth.
 
15 April 2013 saw gold prices drop nearly 15% at one point, ending more than 9% lower at $1351 for the worst day since 1983 and the fifth sharpest loss since prices were floated in 1968. 
 
April 2013's crash in gold prices meant "Chinese consumers [brought] forward jewelry and bar purchases," says a new report on China's gold demand from market-development organization the World Gold Council.
 
Despite forecasting 20% growth by 2017, "That may limit growth in demand in 2014," says the report, China's gold market: progress & prospects.
 
Investment bank Goldman Sachs – which called for a sharp drop in prices last April – last week repeated its call of $1050 by year-end.
 
A new Reuters survey Tuesday put the consensus gold price forecast amongst 28 analysts and consultants at $1,254 on average in the last three months of 2014.
 
Reversing all of last week's gains on Tuesday, gold prices had "found stiff resistance" Monday above $1330, says French investment and London bullion bank Societe Generale.
 
The metal's charts then "formed a daily bearish [pattern] and gold is poised for a further correction."
 
"The market stretched as far as $1331 before it capitulated and sold off," agrees technical analyst Karen Jones at Germany's Commerzbank.
 
"Near-term risk remains on the downside."
 
"Overall sentiment [in metals] is weak," says a note from Canada's RBC commodity team, quoted by Bloomberg today as nickel prices fell at the fastest pace since October, "because China's economy is still a worry."
 
"Compared to macro-economic indicators," China's official Xinhua news agency quotes head statistician Sheng Songcheng, commenting on the slowest money-supply growth in more than a decade at 12.1% annually, "the current M2 growth rate has stayed at normal levels.
 
"Liquidity conditions are still ample to support the development of the real economy."
 
Gold prices in Shanghai today fell 1.1%, down to a 3-session low in the Yuan but cutting the discount to London settlement to 60¢ per ounce.
 
Now at a discount for 7 weeks running, gold bullion in Shanghai typically trades at a premium to international quotes, hitting $50 per ounce and more above London prices on spring 2013's crash.
 
Shanghai equities ended Tuesday sharply lower, but European stock markets reversed earlier losses as New York opened.
 
The Euro currency fell with gold prices, dropping near 1-week lows to the Dollar.
 
New US data showed consumer-price inflation rising to 1.5% per year, in line with analyst forecasts.

 

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As of 15 Apr 2014......

 

China is set to increase 20% from the current level of 1,132 tonnes(t) per year to at least 1,350t by 20171. Following the record level of Chinese demand in 2013, which saw the country become the world’s largest gold market, the report suggests that while 2014 is likely to see consolidation, the succeeding years are likely to see sustained growth.

 

Interesting how such conflicting info emerges every day about anything related to anything to do with the economy.... And of course I'm not at all debating the merits of the above article... just noticing how it seems to depend upon who you question.... or perhaps the nature of the question?.

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As of 15 Apr 2014......

China is set to increase 20% from the current level of 1,132 tonnes(t) per year to at least 1,350t by 20171. Following the record level of Chinese demand in 2013, which saw the country become the world’s largest gold market, the report suggests that while 2014 is likely to see consolidation, the succeeding years are likely to see sustained growth.

Interesting how such conflicting info emerges every day about anything related to anything to do with the economy.... And of course I'm not at all debating the merits of the above article... just noticing how it seems to depend upon who you question.... or perhaps the nature of the question?.

We get the same with the dinar all the time, this article is one mans opinion on the current situation based on the information he has to hand (which could be questionable too) ...... All we can do is digeat all the information we can ( some will be right, some half right and some way out there) and devise our own educated opinion.

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Oops, my bad for not citing the source.... this statement is the summation of the official research report of the World Gold Council...... released 15 Apr 2014... I tend to give them a bit more credence than a singular reporter or op ed piece...as they are a bit more active in the driver's seat as far as what is happening and their likely response as to what will happen....

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I'm a member and wish I could figure out how to print out the research papers.... They just released the Gold reserve holding numbers for the world... and I tried copying and pasting it... (have it downloaded) and it printed out in single column (versus multiple columns over multiple rows) so it was really long and hard to make sense of... Interestingly, it does show the US at the top with gold reported as 71% of its reserves.... There's also a great reserach report on China with projections out to 2017... and its really long... I'll see if later I can figure out how to format so I can paste in here... :D

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