China demand drives Asian gold bar premiums to record highs

Chinese-buying-gold

SINGAPORE (Reuters) –

Premiums for gold bars hit a record high in Asia on Wednesday as lower spot prices lured more buyers, mainly in China, the world’s second biggest consumer of the precious metal, amid tight physical supplies.

KILO BARS SCARCE IN SINGAPORE

“Currently, there are no kilo bars in the market,” said Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore, adding that 100-gram bars were also in short supply.

….Chinese gold imports are likely to swell further, after more than doubling to an all-time high in March, the China Gold Association said this month.

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5 Comments on "China demand drives Asian gold bar premiums to record highs"

  1. Kansas Crude | May 22, 2013 at 10:35 am |

    SRSrocco whats your read on the fact that no bars are being delivered on the Shanghi Exchange? What the expected outcome of this? Price explosion? Short squeeze? Any idea when the expiration date will hit and how many contracts are outstanding?

    Thanks KC

    • shanghai gold exchange trades so called Au(T+D), “automatic roll-over futures”, meaning the shorts failing to deliver on any day just pay the penalties of 0.02% to the longs, but can automatically roll the contracts forward.

      so the best futures instrument of gold in the world is this Au(T+D), there’s no cost of carry for the longs. in fact, the longs can 0.02% per day most of the year. positive carry! well, if we ignore RMB appreciation.

  2. last night, gold/silver went down, but gold/silver equities went up. this may well signal the bottom is in.

    gold in RMB has retraced back to the level last since at $1200/ounce in the april smackdown! so we can expect there’s solid chinese bid at the current level.

    same for silver, in RMB, it has retraced back to $18/ounce in monday smack down

  3. Kansas Crude | May 23, 2013 at 6:52 am |

    Very interesting Judejin I had no idea Shanghi had a never ending short so to speak. What do the longs do if they want delivery and need the physical product? Is there no way to force delivery? IMO that does not make it the best product but it supplies another tactic in the on going battle with paper gold and silver. Hope you are right about the lows being in…… Two years of paper cuts are bleeding me dry….Thanks

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