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Gold Bullion Continues To Travel East
Posted March 28th, 2014
Los Angeles CA, Mar 28 (Tangible Investments) - by James O’Dell - Gold and silver bullion prices dipped on Thursday, with gold easing $12.78 or 0.98 percent to close at $1,292.03 an ounce as the yellow metal nears six week lows after comments by Federal Reserve Chair Janet Yellen last week that interest rates could rise as early as April 2015. Silver retreated $0.10 or 0.50 percent to close at $19.72 an ounce.
“The (recent quantitative-easing) talk is what hurt the market more than anything,” says George Gero, of RBC Capital Markets Global Futures. “Now we’ll see if we’re going to have a reflex rally or short covering on Friday,” he added. "While technical movements may dictate gold's near-term direction, $1,300 is an important threshold for price sensitive bullion buyers, notably emerging markets buyers," said HSBC in a note.
Ira Epstein, of The Linn Group, says that Russia remains a key wild card for gold. The market will be watching Russia closely to see whether its intentions are to annex more land in Ukraine beyond the Crimean region, since “it’s clear the Ukrainian army is no match for Russian troops,” says Epstein. Russia has also been building its gold reserves, adding more than seven tons in February, and Jeff Christian of CPM says he expects the Russian central bank to be the biggest buyer in 2014.
Christian did note, however, that the Central Bank of Iraq, with proceeds from its oil sales bought a massive 36 tons of the yellow metal in March alone. “I wouldn’t be surprised to see more purchases from [Iraq] so I think they’re going to be up there.”
Meanwhile, Singapore Exchange Ltd., the biggest bourse operator in Southeast Asia, is said to be mulling the idea of entering the physical gold market, according to individuals with knowledge of the matter. The combined bullion demand of just three Southeast Asian nations; Thailand, Vietnam and Indonesia soared 42 percent in 2013, climbing to 300.3 metric tons, according to the World Gold Council (WGC).
When you compare that to the 308.9 tons used in all of Western Europe last year, it's easy to see why the Korean Exchange began offering physical gold in March.
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