|As the yuan retreats, China is taking in more gold. The world's biggest consumer of the precious metal raised bullion imports from Hong Kong in September as investors sought to diversify their assets on prospects for further currency weakness.
Net purchases were 44.9 metric tons from 41.9 tons in August.
Further losses in China's currency, as well as investors' concerns over the outlook for the nation's property market, may spur gold demand in China, Goldman Sachs said in a note.
“The potential drivers of increased Chinese physical buying include purchasing gold as a way to hedge for potential currency depreciation in the face of capital controls,” analysts including Jeffrey Currie and Max Layton, wrote in a report dated Oct. 24. Bullion consumption in China may also rise “as a way of diversifying away from the property market,” they said.
Chinese physical gold exchange-traded funds holdings “have increased further, and appear correlated with recent yuan depreciation,” the analysts said. “Should the recent decline in property prices in October and yuan depreciation continue we may see Chinese gold investment demand respond.”
Shipments of gold from Switzerland to China rose to 35.5 tons last month from 19.9 tons in August according to data from the Swiss Federal Customs Administration. The European country is a major gold-trading center and home to several refineries.
While still tiny (not much more than 30 tonnes) compared to gold ETFs traded in New York, London and elsewhere, Shanghai-listed physically-backed funds have increased in size by ten times this year according to Yang Qing, deputy general manager in the global market department of Bank of China, quoted by the Financial Times:
“You can see that China’s investment demand has the potential to be astonishing,” [Yang] said this month at the London Bullion Market Association conference in Singapore. “The proportion of gold in ordinary people’s asset allocation will increase.”
Another sign of improving demand is the premium buyers are willing to pay over international prices. Premiums in China climbed to $6 an ounce over the ruling London price on the Shanghai Gold Exchange on Tuesday, even as the yuan reached new six-year lows.|
|I wasn't aware this was happening, looks like I'll have to do this on all my holdings, I'm a long side investor.|
|Shay,Good for you.Very rich man.You know what happened with GVC.A limit order to sell,stops your broker from loaning your stock out for payment to Shorter,s.|
|@GARYCOOK, I hold over 130k shares in hgm, does it make any difference to put a limit order to sell?|
|More good news: I really like the last paragraph. dyor.
The Gold Market Is A Wildfire Waiting To Happen – GAM
By Neils Christensen of Kitco News
Thursday October 27, 2016 09:13
(Kitco News) - One major international global asset management firm says conditions are perfect for gold prices, comparing the market to a potential wildfire that is just waiting for the right spark.
John Lambert, director of investment at GAM is bullish on gold, saying the market is a wildfire waiting for one spark
John Lambert, invesment director at asset management firm GAM
In an exclusive interview with Kitco News, John Lambert, investment director at GAM -- an investment firm with more than $119 billion in assets under management -- said that he sees a number of catalysts that will re-ignite gold’s uptrend.
“It doesn’t really matter what the specific catalyst will be. Gold has the potential to move higher,” he said.
One significant spark that Lambert said he sees in the near term could be potential U.S. dollar weakness, adding that the greenback’s current strength is based on “fiction.̶1;
Although the U.S. dollar has lost some ground, prices remain near seven-month highs. The greenback has remained fairly resilient because of Federal Reserve posturing, but Lambert said that it could soon change as it becomes clear that interest rates will remain lower for longer.
“It’s impossible for interest rates to go up substantially,”; he said. “Like it or not, we are in a world of trending lower economic growth.”
Not only will the U.S. dollar suffer because of low interest rates, Lambert said that global central bank monetary policy has gone as far as it can go and now governments are trying to boost economic growth through fiscal policies. However, he said that this will only result in higher debt levels.
The response to stagnant growth and higher debt levels could eventually lead to higher inflation, which will ultimately be positive for gold.
Another factor that could drive gold prices higher next year is geopolitical uncertainty as Europe faces a number of contentious issues like Italy’s constitutional referendum, elections in France and Germany and continued fallout from the Brexit referendum.
Brexit, Lambert said, was the first domino to fall, highlighting rising discontent for globalization. He added that it is still unclear what impact that will have on the European economy and the political landscape.
“The point of Brexit is that it proves that populism is here and it is real,” he said. “It highlights that there are growing risks to the very fabric of the euro zone. The next 15 months is going to be extremely volatile geopolitically and gold could be seen as a political hedge.”
Although Lambert is bullish on gold, he doesn’t have a price target for the yellow metal. He also said that he prefers exposure to gold through the mining sector. He explained that the GAM Global Diversified Fund has a 5.5% position in the gold sector, which is currently being evaluated following the correction since start of the month.
By Neils Christensen of Kitco News; firstname.lastname@example.org
|To all HGM shareholders. I have today put a Limit sell order on my holding in HGM of £2,to stop Shorter,s from loaning the shares from my broker,which they can do for a fee,without me or you knowing about.I suggest you do the same.|
|Holy smoke the $1400 gold rush and the hgm 200p rush
|No thread member mentioned Gold Miner,s to me.But I can remember a guy from Schroder,s on Bloomberg telling investor,s the same as El Erian that every portfilio should have at least a 5% holding in Gold.|
Very well done, which thread member mentioned gold miners to you?
|El Erian knows his stuff.I have 6.9%,and 7.7% holding atm,in my SIPP,and Fund and Share account,probably overweight,but with a probabable 7% Dividend and the potential growth on HGM,and owing me next to nothing.Been a great investment for me.|
|Read my last post about el erian.|
|Who has ? Have I missed something ?|
|Now this gentleman has $1 trillion, yes, trillion under his management,
now if he is positive on gold, it is only going one way, his way,
up. Gold miners are set for new highs in my honest opinion.
|Well now you mention it, I would have thought any
bidder will be waiting for the report too, then
who knows if good.
|Ok thanks. I thought you was suggesting a bid for Paf?|
From the 21 Sept RNS (summarised):
1. A Definitive Feasibility Study on Elikhulu tailings retreatment project at Evander Mines will be available in November, and we will be told. The resource here is 1.7 million oz, giving a life of 14 years, producing 50,000 oz pa for the first 8 years, then 38,000 thereafter.
2. The Evander 2010 pay channel resources are currently in the inferred category. Current surface drilling is ongoing to improve confidence in the resource. Initial results in November, possibly leading to a new mining area without the cost of sinking a new shaft.
|Just posted this on paf.
5% Allocation In Gold Is Appropriate - Mohamed El-Erian
By Kitco News
Tuesday October 25, 2016 11:28
(Kitco News) - Gold can play an important role for investors in a world that continues to face low and negative interest rates, according to one renowned economist.
Mohamed El-Erian, Allianz's chief economic adviser, sees it approporiate for investors to hold 5% of their portfolio in gold
Photo courtesy of the IMF: Mohamed El-Erian, Allianz's chief economic adviser.
In an interview with the Wold Gold Council, in it Gold Investor, fall edition, Mohamed El-Erian, Allianz's chief economic adviser, said that in this current investment environment, a 5% strategic allocation in gold “is appropriate.”
“As part of a diversified portfolio allocation that includes a higher-than-usual cash allocation, gold can play an important role in overall risk mitigation. It can also provide a notable upside should the enormous amount of central bank liquidity injection gain traction and result in higher inflation, be it actual or expected,” he said in a question-answer session.
“A growing number of investors are recognizing the potential of gold to increase returns and improve risk-mitigation attributes of well-diversified portfolios. At the same time, there are – understandably – growing worries about the over-valuation of public equities and fixed income, thereby strengthening the case for an appropriately-sized allocation to gold,” he added
However, he also cautioned investors that their gold allocations should reflect their own risk tolerance as the market can be fairly volatile.
The prolonged period of low and negative interest rates has pushed the global economy into unchartered waters, he said, which is presenting real risks for investors. Along with gold, he said that he is recommending investors hold bigger cash positions.
“Ultra-low interest rates entice investors to stretch much more for returns. Combine this with repressed financial volatility, another objective of unconventional central-bank policy, and you could well end up with excessive risk-taking on the part of too big a portion of the investor base,” he said.
While low interest rates are increasing risks for investors, it is not the only threat to financial markets. El-Erian said that he sees three factors that are weighing on advance economies growth: political polarization, which is delaying the implementation of comprehensive pro-growth structural reforms; growing income inequality that is reducing the probability of good economic governance; and current economic and financial systems that are excessively borrowing future growth.
By Neils Christensen of Kitco News; email@example.com
|Srp what news are you waiting for with Paf?|
|Cup and handle formed on the gold chart, hopefully
back above $1300 soon.
I too received my dividend and reinvested into PAF
as other poster mentioned here. I am expecting news
at paf by Nov and xd on the 8.12.16.
I have my aly dividend in a couple of days and will be
investing it into hgm.
|I hold a relatively large amount 10k less now after xd, got my divi last friday, looking to add soon,|
|Pixi,Holding 30,000 HGM then,nearly as many as me.What do they owe you ?|
|Thank you for my £1,500 divi HGM. I may pamper myself and buy some more AAZ. - the most undervalued gold miner on the planet.|
|Mine, too. Killik. Put it into PAF.|