- Today’s AM fix was USD 1,247.00, EUR 964.20 and GBP 767.53 per ounce. Yesterday’s AM fix was USD 1,254.25, EUR 968.46 and GBP 779.91 per ounce.
- Gold fell $6.50 or 0.52% to $1,250.00 per ounce and silver slipped $0.11 or 0.58% to $18.98 per ounce yesterday.
- In London trading today silver weakened further to $18.70 and is 1.63% lower relative to yesterday’s midday London fixing.
- Platinum weakened again today by 0.58% to $1,377 while profit taking in palladium continued as it fell 0.95% to $848.
The gold price traded in a narrow range overnight in Asia, ending trading in Singapore at $1,247. Further weakness in London trading saw the price slip marginally to $1,240 which is considered a relatively strong support level. Gold is down 0.72% compared to yesterday’s New York closing price.
The China Gold Congress is currently in full flight in Beijing. The three day Congress is China’s biggest gold industry event of the year, drawing in participants from across the Chinese and international gold sectors including central banks, mining companies, bullion banks and refiners.
The event, co-sponsored by the World Gold Council (WGC) and the China Gold Association, showcases China’s gold industry and acts as a focus point for what is now the world’s largest gold market in terms of demand and product innovation.
Discussions and forums during the event cover everything from reserve asset management for the official or central banking sector, through to investment products and mining supply. One of the key themes this year is the internationalisation of the gold market.
China’s gold market accounts for one third of global demand, and according to the WGC, is expected to grow another 20% cumulatively from now until the end of 2017.
In what is still a very centrally planned economy despite many market related reforms, nearly all reported gold activities in China flow through the Shanghai Gold Exchange (SGE) in one form or another.
Both the China Gold Association and the Shanghai Gold Exchange were established with government backing and their growth and success reflect a very deliberate pro-gold strategy on the part of the Chinese Government.
Even though the China Gold Association is a non-for-profit member association, it still primarily acts as a conduit and coordination group between the government and the gold producers.
The Shanghai Gold Exchange is the government’s second central hub in China’s gold market.
SGE approved refiners take in production from China’s fragmented gold mining industry and in imports from Hong Kong and other countries.
The gold then flows through the Exchange after which SGE deliveries flow out to the banking sector, the official government sector, and additionally to the jewellery and technology industries.
The development of the Shanghai Futures Exchange also provides an additional venue for hedging and gold price discovery.
In China gold is money and is accepted as such by the general population.
There really does not seem to be a debate about this in Chinese government circles, and another part of the government’s strategy has been to advocate the increased innovative usage of gold by the Chinese banking sector.