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Continuing chaos on world equity markets and fears about the Chinese economy did not result in safe-haven buying of gold on Tuesday.
The metal fell back from six week highs hit last week to close $15.30 or 1.3% lower than yesterday at $1,138.30 an ounce on the Comex market.
While bargain hunters have stayed away from the Shenzen and Shanghai markets, gold traders in China – the world’s second largest importer after India – made the most of the availability of cheap metal last month.
Net gold imports from Hong Kong rose nearly by half to 55 tonnes last month from 37 tonnes in June, according to Hong Kong Census and Statistics Department. Gold fell to a five-and-a-half year low below $1,100 during July.
Hong Kong traditionally accounted for the bulk of imports into the country, but Shanghai and Beijing are becoming important centres for the gold trade.
But the buying spree may end if Chinese stocks to continue to weaken and the economy slumps further:
“I think if we do get GDP starting to print well below 7 percent for the next few quarters then (it will affect) retail spending and wages (which will) further erode purchasing power for precious metals,” Victor Thianpiriya, commodity strategist at ANZ Bank in Singapore, told the Economic Times.
2 Comments
Rod B
This article is a bunch of bunk. Either China (en groupe) is buying gold or they are not. It really makes no difference, because no one can say with any credible support for their statement. The fact of the matter is that one living in China cannot trust the banks there; nor can they trust any form of government oversight to determine whether a “public” company has an accounting protocol that meets any form of international accounting scrutiny. It is all secret, or known only to a few.
My advice is don’t concern yourself with the price of gold or silver (or platinum or palladium), just buy some and sock it away. Sooner or later it will pay more than you paid, and one thing is for sure: absolutely NO currency in the recorded history of the world has been a currency of last resort for more than a few decades. The US dollar is in its terminal phase. So, go figure!
Another thing that is for sure: those gold and silver coins of the 1600’s and 1700’s that are found in the sand off Florida, have value. A krugerrand will too – no matter when or where.
gene byrge
Rod B: you da man. smart feller