Gold Prices rebounded Monday on bargain hunting as expected, after touching a 6 month low amid a sharp sell-off on Friday last week. Gold Trading volume on the Shanghai Gold Exchange for the benchmark 99.99% purity climbed to a new record which exceeded 22 metric tons today for the first time ever as China returned to the markets after a week long Lunar New Year holidays. The slump in Prices in the past week provided great incentive for buying as many Chinese are still holding a bullish outlook on Bullion. China’s Gold consumption amounted to 832.18 tons in 2012, an increase of 9.35% from a year earlier. Gold Jewelry demand rose 10.09% year on year to 502.75 tons, while those of Gold Bars and Gold Coins gained 12.22% and 21.63%, respectively, to 239.98 tons and 25.3 tons. China produced 403.05 tons of Gold Bullion in 2012, making it the world’s largest producer for the sixth straight year. China is currently the world’s second-largest gold consumer after India.
India may take longer time to weaken its Gold Demand:
Gold Demand from India has been above average after last week’s sell off. “Appetite from India has been quite unimpressive of late, although buyers did respond to last Friday’s sell off,” as reported by Bloomberg. Following strict instruction of the government,India’s second-biggest gold importer, state-run MMTC Ltd said it will take more steps to curb purchases of the yellow Bullion. MMTC expects its Gold Imports for the fiscal year ending March 31, 2013 are likely to fall to 30-40 tons from 160 tons a year earlier. The passion for Gold in India – the world’s top gold consumer is legendary & will take much more than a few duty hikes to wean off. Meanwhile if the INR continues its northbound journey, Gold Prices will seem attractive even with the duty hikes, which will in turn mean more imports.
Iran Rejects Gold for Nuclear Power:
Tighter US sanctions wiped off Turkey’s Gold-for-Gas trade with Iran and have stopped the Turkish state-owned lender Halkbank from processing other nations’ energy payments to the OPEC oil producer. US sought to prevent Turkish gold exports, which indirectly pay Iran for its natural gas, from providing a financial lifeline to Tehran. A group of countries including Britain, China, France, Germany, Russia and the United States, known as P5 +1, wants Iran to do more to prove that its nuclear program is for only non-military purposes and to permit wider U.N. inspections. An anonymous source said on Friday that the P5+1 plan to offer to ease sanctions barring trade in gold and other Precious Metals with Iran in return for Iranian steps to close down the nation’s newly expanded Fordow uranium enrichment plant. Rumors are that Iran has rejected offers by world powers to ease sanctions barring trade in Gold in return for steps to shut down a nuclear facility, Iran’s foreign ministry said the offer proposed was unacceptable & accused western powers to take away the rights of a nation in exchange for allowing Gold Trading.