Keeping in mind the stories broke by Bloomberg w/r to rice-pellet sized spy chips, and to watery rockets, Message 34698906 both ridiculous to the point of pointlessly childish, let us give a think to the current Bloomberg story re China stopped importing gold
My observation front of mind is a simple one, that, if PBOC did not buy gold during May, and gold still hit an all-time-high, what would gold do once PBOC is back? Further, never mind whether PBOC did or not buy gold, either directly or by proxy, did anyone else in China buy gold at a premium?
Before signing off on this top, Bloomberg is a FF, make no mistake
bloomberg.com
Gold Slumps as China’s Central Bank Halts 18-Month Buying Spree
PBOC stockpiling has been key to precious metal’s rally Spot gold drops by more than 1% after reserves data released
Sybilla Gross
7 June 2024 at 17:42 GMT+8
China’s central bank didn’t buy any gold last month, ending a massive buying spree that ran for 18 months and helped push the precious metal to a record high in May. [Central bank might not have bought any gold during May, but did any other organisation in China buy any gold? Did the people buy gold? Did the people pay premium for the gold they did buy?]
Spot prices for gold fell 1.5% after the People’s Bank of China said its bullion holdings were unchanged at the end of May. The bank had been stocking up its reserves since November 2022, leading a flurry of purchases by the world’s central banks amid rising geopolitical tensions. [PBOC gold hoard does not change most of the time until they announce taking in gold either directly or from one of its many proxies, such be army, navy, airforce, armed police, state-owned banks, investment banks, custodial entities in Hong Kong, etc etc etc and oh, etc]
“My initial thought is that China, a major driver of the gold rally in the past year, is nowhere near done buying gold,” Ole Hansen, head of commodity strategy at Saxo Bank AS, said in an emailed note. The pause shows that they are balking at the prospect of paying record-high prices. [Good-enough guess]
Gold soared to an all-time high above $2,450 an ounce in May, supported by strong central bank buying. The PBOC’s demand for bullion has come as the world’s second-biggest economy seeks to diversify its reserves and guard against currency depreciation. [Currency depreciation did not stop in May]
First-quarter purchases by the world’s public institutions were at record levels, with China the biggest buyer, according to the World Gold Council. The PBOC held its gold holdings at 72.80 million troy ounces in May, which was up from 62.64 million troy ounces before the long stretch of purchases.
Fading AppetiteThere had been signs that China’s demand was cooling as higher prices took their toll. In April, the PBOC bought only 60,000 troy ounces, down from 160,000 ounces in March, and 390,000 ounces in February. The country’s imports in April, meanwhile, slipped 30% from the previous month. [PBOC does not have to buy at all in order for its gold hoarding to go up. Proxies are good enough for buying and holding]
The risk for gold bulls is that China’s voracious appetite for bullion has left the precious metal vulnerable to any potential shift in demand. [China needs to strategically unload its Dollar and Euro holdings, and both holdings keep going up unless dumped into gold and silver and copper and and and because the trade surplus keeps on rising]
The initial price reaction “looks a bit technical,” said Nicholas Frappell, global head of institutional markets at ABC Refinery in Sydney. “It would be surprising if the announcement represents anything other than a pause in the general trend of ongoing official sector demand.” [Yeah]
Spot gold was trading at $2,341.40 an ounce by 10:36 a.m. London time, down 1.5% on the previous close.
— With assistance from James Poole and Andrew Janes |
