Something is up with #gold in China.

This chart shows the international gold price denominated in CNY compared to the domestic price of the 9999 contract on the Shanghai gold exchange.

This divergence is unusual. Gold trading on the Shanghai #Gold Exchange has moved to a large premium to the international gold price. We've seen premiums before, but the current percentage premium is unprecedented.

How to interpret this? Think that it's very much a case of perspective.

Yes, the Central Bank of Turkey is selling #gold, which is counter to the theme of unprecedented central bank buying.

But...

https://twitter.com/KrishanGopaul/status/1659539704138571777

Putting this another way, if all the sales from the CBT have been to fulfill demand for gold domestically, then retail investment demand for #gold has exploded in Turkey.

Here is quarterly #gold bar and coin demand from our #GDT data series.

#Gold has recovered a litle of thegrounds lost over the past few days and is trading around $1963/oz on Friday just after noon in Europe. The dollar has slipped a little overnight, which has taken the pressure of #gold for the near term.

We published a new primer on #gold last week at the same time as #golddemandtrends

"Gold Market Size and Structure"

gold.org/goldhub/resear… I'll tweet out some of the highlights from the report for those too lazy to download it.

Above: total stock of #gold above ground is about 209,000t.

Below, the value of this stock.

Another question, this time from people who have followed / traded gold for some years:

"Why isn't gold lower, considering the strength in the dollar and moves in real rates?" A version of this chart even made it into the FT recently, with the "TIPS implied gold price" from Macquarie.

(Full article here, probably paywalled).

ft.com/content/21d20c…

Spot #gold is trading aroundv$1827/oz with a $0.30/oz bid-ask spread on Friday morning in London.

Although it bounced after stronger US inflation data, it couldn't hold those gains as yields firmed late in the day.

But lets look at a slightly longer term perspective... Since the start of the year, #gold is essentially flat...

I've been looking a bit more at the move in #gold in Asia on Monday morning.

Between 23:30 and 23:45 BST 17,538 contracts traded on Comex, low was $1677.90.

Between 23:45 to Midnight a further 7,825 contracts traded and 5,705 in the 15 minutes that followed. What triggered the initial move lower in #gold?

It's hard to be sure but the dollar did open a little firmer than Friday's close.

All-time highs for #gold – a thread

Gold hit a new all-time high this morning, posting $1944.71/oz during late Asian trading and is currently near that level.
There has been a LOT of coverage of the all-time-high on social media – who knew there were so many #gold experts?😃😃 It’s great timing as far as we are concerned, as it means that #gold is getting a lot of attention ahead of the launch of our Q2-2020 / H1-2020 #GoldDemandTrends release, which will come out on Thursday.

Gold at $1800/oz: a short thread.

Gold is trading just above $1800/oz after hitting a fresh 8-year high this week. Not much appears to stand in the way of #gold challenging the all-time high of $1921/oz set in September 2011. The best financial market-related explainer of the move in #gold is ever-falling real US yields and this relationship remains extremely important.

As concerns about the impact of the Coronvirus intensify, real rates have headed every lower, helping gold.

What a ride it has been for GCM0, the June-expiry Comex #gold contract.

One month ago it was trading at a $15/oz premium to the spot gold price.

Now it's trading at a $10/oz discount.

(short thread) I’ve had a few questions this morning about

“why is the Comex future trading at a discount to spot”

The short answer is that we are nearing first notice for Jun, so specs and investors are selling Jun and buying August.

This is pushing the Jun lower, hence the discount.

Russia’s central bank announced yesterday that it will suspend domestic #gold purchases on 1 April, with further decisions on gold to be made depending on market circumstances. The Central Bank of the Russian Federation (CBR) had been a consistent gold buyer since 2006, reaching 2,279 tonnes of gold holdings as of March 2020 which accounted for 20.6% of total reserves. CBR’s announcement followed several signals that it was scaling back its gold buying.

Comex #gold premium to OTC gold has climbed sharply as this chart from Bloomberg shows.

On 23/03 at 6am the EFP stood at about $6/oz. A day later, this has blown out ot more than $20/oz.

Due to shortages of investment gold and difficulties in shipping metal around. News that three large #gold Swiss refineries are halted for at least a week as this story from @peterhobson15 illustrates has played a role in this move.

reuters.com/article/precio…

Good Morning. #Gold is trading just below $1490/oz on Monday morning in Europe, showing further signs of consolidating, as it has done over the past week. The key question for me is how much more leveraged selling will take place in #gold.

The COT report shows that a decent amount of net managed money longs liquidated in the week to last Tuesday...

One sided, in more ways than one.

It’s been a frustrating to be away from the office at a conference even one as good as the @ThePLSA.

Now that I’m back at my desk and in front of my spreadsheets I’d like to share some thoughts about #gold Gold has been a one-sided market for a while: investment and speculative demand is dominating trading while the Indian and Chinese physical markets have been quiet.

Futures, OTC and ETF investors have driven gold to recent highs. Here is the Comex COTR as an illustration.

Gold: Trading at $1676/oz at the time of writing in what has been a very choppy start to the week.

$1700/oz traded in Asia early on Monday as global equity markets opened (and have stayed) sharply lower.

But #gold couldn't hold these gains. Switching to the Comex active contract, there is no sign of a particular jump in #gold volume such as was seen on Friday.

Twenty Years of the Central Bank Gold Agreement comes to an end today.

(short thread) Today marks the end of the final Central Bank Gold Agreement (CBGA). Over the last twenty years, the agreement has helped stabilise the #gold market by limiting the amount of gold that signatories, all European central banks, could collectively sell in any one year.

#gold under some moderate pressure on Thursday during European morning trading, last around $1537/oz Firmer US equity futures (EUS9 up 24 points at the time of writing) and less negative real US yields appear to be driving #gold today, perhaps related to the story indicating that China won’t retaliate to new US Tariffs (for now).

#Gold is just above $1530/oz in Tuesday morning trading, slightly higher than the US close on Monday and today’s Asian range.

With London out for a (sunny) bank holiday, I missed the extraordinary Asian range on Monday. I’m not sure what the trigger was, although I suspect concern about the skirmishes in the looming trade war were to blame.

The Shanghai Gold Exchange was one venue where the move in #gold played out, with heavy volume seen in the T+D contract, taking August to a record.

Gold trading just below $1500/oz in early European trading, about $35/oz off Tuesday’s intraday highs.

The sell-off in #gold had two triggers: the release of slightly firmer US CPI and signs of a slight thaw in the Sino-US trade war. The sell-off triggered some outflows in #gold ETFs, which posted their first decline in 12 sessions and the largest one-day outflow in 3 months, accordiing to Bloomberg's robots.

How worried should #gold bulls be by near-record net-long positions in #gold on Comex.

Grey haired market participants (like me) know that positioning extremes ‘often’ lead to reversals, as the ebbs and flows of gold and net longs show on this chart. BUT

There have been times when net longs in gold have been elevated for years, yet this hasn’t stopped #gold heading high – see the area highlighted here between Oct 09 and July 11.

$Gold: consolidating above $1500/oz at the start of the week - last around $1502.80 following some volatility in early European trading. An early test below $1490 per ounce just after 8am London was short-lived and $ quickly bounced back above $1500/oz.