Editor’s Note
This article details a technical rebound in precious metals, highlighting the influence of Chinese market holidays on global pricing and the recent shift in gold’s premium for Indian buyers.
Gold and silver extended their rebound from multi-week lows Friday morning in London, reversing the last of their losses since wholesale trading in No.1 precious metals consumer China closed last weekend for the Lunar New Year holidays.
Gold prices fell to a discount this week versus London bullion rates for the first time since mid-January, showing a disincentive to new bullion inflows of $18 per Troy ounce after accounting for the sub-continent’s import duty and GST sales tax according to Reuters.
Start-February’s crash in global gold prices saw India’s bullion market shoot to a $100 premium, the strongest Dollars-per-ounce incentive for new imports since mid-2014. Back then, as the long-term charts show, global gold prices were trading around $1300 compared to $5025 today.
While the price of gold today traded $570 below late-January’s record spot-market high of $5594 per Troy ounce, it held on track for a fresh week-end record in the London bullion market. Any fix above $4990 at today’s 3pm benchmark auction would mark London gold’s 24th new all-time Friday high of the past 52 weeks.
Silver meantime made 11 new Friday records in 17 weeks between October and January, but the more industrially-useful precious metal then lost 27.4% over the following 5 trading days. That was the steepest silver price crash since its lost 29.8% in the first week of May 2011, retreating from a re-touch of January 1980’s all-time $50 spot market peak.
With silver today reclaiming the $80 level, a note from strategist Nicky Shiels at Swiss bullion refining and finance group MKS Pamp states:
Given “10 to 15 days” meanwhile by US President Trump to make a “meaningful deal” over its nuclear development program, the theocratic dictatorship in Iran vowed overnight to respond “decisively” to any “military aggression” by the US Navy warships and aircraft now massing in the Persian Gulf and eastern Mediterranean.
With ceasefire talks between Russia and Ukraine breaking up this week with “progress” but no agreement, the Kremlin says it has pitched a “portfolio of potential US-Russia projects” worth $14 trillion, contingent on the end of Western financial sanctions imposed since Moscow’s invasion of its neighbor began 4 years ago this weekend.