Asian gold buying spree…
As I continue to watch gold, I am always curious to see what countries are getting in on the gold band wagon. I found this article at the Gold Money News Desk, that was published on Jan. 13th 2013. It talks about the buying spree that Asian countries are on right now. We all might want to take note..
The mood of bullishness evident since the start of the year continued yesterday, with the FTSE All-World Index equity index reaching its highest level since May 2011. Copper and crude oil rocketed higher yesterday morning, with the red metal reaching a three-month high and oil up on news of Saudi production cutbacks in December.
Precious metals joined in the reflation party, with February Comex gold up 1.4% to settle at $1,678/oz. With expectations growing that the Indian government are preparing to hike gold import taxes again, Indians are rushing to buy gold before higher rates kick in. WSJ reports ($) that traders there have imported between 25 and 30 tonnes of gold in the last week – compared with just 5-7 tonnes in previous weeks.
On top of this, the paper reports that events in China are encouraging gold purchases, with Chinese stocking up ahead of the country’s Lunar New Year celebrations on 10 February. News that China’s trade surplus nearly doubled in December is also helping the yellow metal. Trading activity on physical exchanges in China hit a record high early this week.
Events further east are also helping the bulls, with Japan’s new Prime Minister Shinzo Abe today announcing a new Y10.3 trillion (US$116bn) stimulus programme. If at first you don’t succeed, then try, try, try again, appears to be the Japanese government’s approach to such programmes, as they’ve tried countless similar schemes over the last 20-odd years. Abe’s plan also calls on the Bank of Japan to buy bonds issued by the European Stability Mechanism as part of efforts to weaken the yen. A much larger than expected Japanese current account deficit is also pressuring the yen, which hit a 31-month low against the dollar yesterday.