Gold Bullion Hits 12-Week High as China's Stock Market Dumps 6%, Silver ETF Shrinks Again

[The Machine]

 

 

GOLD BULLION started London trade at a 12-week high against the US Dollar on Tuesday, rising 1.8% for the week so far as Asian stock markets slumped once more with commodity prices.

 

As gold hit $1117 per ounce ahead of tomorrow's interest-rate decision from the US Fed, silver touched its highest level since early December at $14.45 per ounce, before also easing back as crude oil steadied and European stock markets crept higher.

 

After New York closed 1.5% lower last night, China's equity market sank another 6% this morning, wth Tokyo and Hong Kong losing 2.3% each.

 

World stock markets have now accelerated their drop to 18% from last May's new all-time high on the MSCI index.

 

 

"Rallies" in gold bullion, in contrast, "have now eroded the 100-day moving average at $1105," says German financial group Commerzbank's weekly technical analysis, "and we would treat a close above here as the next upside trigger for a move to the...200-day ma at $1132.

 

"This is our minimum objective. Longer term we expect to see a challenge to the $1192 October 2015 high, and the $1205 [per ounce] 2014-2016 resistance line."

 

"We have been watching this $1110 level for confirmation of a bullish cycle," says Canada's Scotiabank in its daily technical analysis of the gold price, also "looking for an initial move to $1135."

 

Priced in British Pounds, gold bullion today touched its best level since May, rising to £785 per ounce after Bank of England boss Mark Carney told UK lawmakers in regular testimony that – contrary to hints he gave last year – "the conditions required for an interest rate hike are not yet in place."

 

Gold prices in China – the world's No.1 miner and importer of gold bullion – today tracked global 'spot' quotes 1.3% higher as Chinese equities sank, reaching their highest Yuan level since end-October on solid volume at the Shanghai Gold Exchange.

 

Total gold bullion imports to China through Hong Kong rose 5.9% last year, new data said today, reaching 861.7 tonnes – equal to more than one ounce in every four of 2015's record-high global gold mining output, but remaining 25% below 2013's record as direct shipments to Shanghai continued to grow.

 

Monday's 0.6% gain in Dollar gold prices meantime saw investor demand for shares in the giant SPDR Gold Trust (NYSEArca:GLD) unchanged at an 11-week high, needing 664 tonnes of bullion to back their value.

 

But silver's largest ETF shrank again however, with shareholders now quitting 2.3% of the iShares Silver Trust (NYSEArca:SLV) since New Year. 

 

Forcing an outflow of 226 tonnes so far this month, that's taken the SLV's bullion holdings down to new 3-year lows of 9,662 tonnes.