Posted: 17 Feb 2014 10:50 PM PST

From:http://www.cnbc.com/id/101422278

China officially overtook India as the world's largest consumer of gold in 2013, according to the World Gold Council (WGC), in a year that saw overall demand for bullion slump 15 percent owing to heavy exchange traded fund (ETF) selling.

Chinese consumer demand – which includes jewelry, bars and coins – rose 32 percent on year to a record 1,066 tonnes in 2013. Indian consumers, by comparison, bought 975 tonnes – a 13 percent rise from the previous year, the latest WGC Gold Demand Trends report published on Tuesday showed. Globally, consumer demand climbed 21 percent on year, totaling 3,864 tonnes.

(Read more: Gold's rally may struggle towards $1,350)

"Demand for gold in China set a remarkable new record…The impact on the Chinese gold industry of the extraordinary growth in 2013 demand has been marked, with significant growth in both manufacturing and retail network capacity," the WGC, an industry body representing gold miners, wrote.

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Jonathan Barratt, Founder of Barratt's Bulletin, says continued Chinese demand for the precious metal could push gold prices to hit $1,340.

While data from recent quarters has shown China extending its lead as the top gold consumer, data for the full year confirms this.

A steep drop in gold prices during the April-June quarter triggered a buying spree among mainland consumers – and it was that quarter which had the strongest impact on the annual demand numbers. The average price of gold for the year was $1,411 per ounce, down 15 percent on 2012. However, with prices currently stabilizing, Chinese demand is expected to establish a steadier pace, the WGC said.

In India, higher import duties, strict import quotas and restrictions on gold-related lending and coin sales limited supply on the domestic market. Over the past two years, the government has implemented a slew of measures to curb demand for gold – its second-biggest import after oil – as a means of reducing the country's large current account deficit.

(Read more: Reading gold – double bottom or support rebound?)

There may be scope to ease the restrictions this year, however, as the deficit narrows. Finance Minister P. Chidambaram after presenting the interim budget in parliament on Monday said the government would look into relaxing the curbs, Reuters reported.

Overall demand falls in 2013

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Rampant outflows from bullion-backed ETFs and lower central bank buying offset robust consumer demand in 2013, resulting in a decline in overall demand.

Gold demand was 15 percent lower than 2012, with a full year total of 3,756 tonnes.

Net outflows out of ETFs amounted to 881 tonnes as investors fled the yellow metal on concerns about the Federal Reserve scaling back its monetary stimulus and a lack of inflationary pressures.

"The main feature of gold investment throughout 2013 was the contrast between ETFs, which acted as a source of supply to the market as sizable institutional positions were sold, and demand for bars and coins, which surged to an all-time high," the WGC said.

(Read more: Is China using gold to internationalize the yuan?)

"This pattern was repeated during the fourth quarter of the year, although the demand for small bars slowed following the exceptional pace of demand in the first three quarters. The expectation is for this flow to taper off as the market is pared back to a core of strategic holdings following the liquidation of more tactical positions," it added. There was a net outflow from ETFs of 180 tonnes during the fourth quarter.

Meanwhile, central banks considerably slowed their pace of purchases to 369 tonnes – down 32 percent on year – due to the heightened volatility of gold and a slower rate of foreign reserve accumulation.

"The annual total is in line with our widely-discussed expectations and, although 32 percent lower than the previous year, is a healthy outcome – particularly in light of 2012 being the highest level of demand for almost 50 years," the WGC said.

Source:http://www.cnbc.com/id/101422278

18 February 2014 - China Digs Itself Deeper Into Dollar Trap

Posted: 17 Feb 2014 05:01 PM PST

From:http://www.bloomberg.com/news/2014-02-17/china-digs-itself-deeper-into-dollar-trap.html

Reading Eswar Prasad's new book, it's easy to picture the entire global economy as a giant bird cage, with Jack Lew and Janet Yellen standing outside waving at all the unwitting creatures inside.

In "The Dollar Trap," the Cornell University economist doesn't paint the U.S. Treasury secretary or Federal Reserve chairman in sinister terms. Prasad's argument is that for all the worries about U.S. policies and debt, and the many efforts to build up an alternative, the dollar's linchpin role is only strengthening. What struck me most, though, is that China still can't see that it's the dupe in this giant pyramid scheme.

China's $3.8 trillion of currency reserves are the largest stockpile ever amassed. Economists have long seen that money as a strength -- the ultimate rainy-day fund should China's shadow-banking system blow up. Trouble is, the value of those holdings depends on China's $1.3 trillion of U.S. Treasuries. If they plunge in value, all hell breaks loose and officials from Beijing to Brasilia will scramble to exit the American bird cage.

The concept of such enclosures has great significance in feng shui. In the late 1960s, Macau tycoon Stanley Ho designed his Lisboa casino -- featured in a James Bond film -- to be a huge bird cage. The symbolism was obvious: We've got you and your cash trapped. China is looking like a big-money gambler who just knocked over a casino and can't use the loot because it's all in marked bills. If the mainland ever tried to spend down its Treasury holdings, the global financial system could collapse.

China's central bank "faces the prospect of significant losses in its reserve portfolio if it were to disentangle itself from the trap through any precipitous actions to shift out of the dollar," Prasad writes. And "the political fallout could be ugly if the Chinese public learned of the magnitude of these losses, which would be seen as a transfer of wealth to the U.S."

Imagine the conspiracy theories that would consume a Chinese blogosphere already primed to see American treachery everywhere. Did you know that the White House wants a war between Beijing and Tokyo to slow China's rise? Or that the Fed is depressing the price of gold to stop it from displacing the dollar as a haven? Or that the SARS virus was unleashed by the U.S. military to subjugate Asia? Such conjecture is all over Chinese cyberspace. Online, people seem to believe just about anything that doesn't end with "LOL!"

Although the Communist Party wields great power over the masses, it remains extraordinarily sensitive to spikes in public outrage. Those worries are increasing amid tepid global growth, as Chinese leaders struggle to keep their own economy expanding at more than 7 percent. As Prasad writes, "China now has a strong incentive to support the dollar's value, limiting its losses for the time being but at the cost of getting even more entangled in the dollar's sticky web."

The Chinese central bank is stuck in a dangerous cycle. Every time it clamps down on credit to curb excessive lending, markets panic, interbank borrowing rates skyrocket and policy makers back off. At the same time, a minicrisis in emerging markets this year will greatly complicate President Xi Jinping's efforts to restructure the economy away from exports and hyperinvestment.

The irony is that that means even more dollar purchases. This dynamic runs counter to Beijing's aspirations for a greater global role for the yuan, and to the desire of Russians and others to get the dollar out of their lives. Indeed, one no longer hears much about the regional bank Xi proposed in October, to invest in infrastructure across the region. The Chinese leader had pledged to provide funding from what essentially would be a local International Monetary Fund free from those pesky Americans. The only problem is that the $7 trillion-plus Asia would tap for such an enterprise is largely beyond its reach.

"So the choice the U.S. offers the rest of the world is simple: you get to choose when to take a loss on your holdings of our debt -- now or later," Prasad says. "Faced with this stark choice between two evils, many emerging markets end up being boxed into maintaining export growth by accepting the unpleasant trade-off of a loss on their reserve holdings in the future. The choices they have made -- intervening in foreign exchange markets and accumulating reserves as a self-insurance mechanism -- have only fueled U.S. fiscal profligacy and strengthened the dollar's role in the global monetary system."

If recent history telegraphs anything about the future, the only element of the global economy sure to grow in coming years may be the size of America's bird cage.

Source:http://www.bloomberg.com/news/2014-02-17/china-digs-itself-deeper-into-dollar-trap.html

17 February 2014 - 马年金价开局行情看好投资金条或再迎中国大妈

Posted: 17 Feb 2014 04:59 PM PST

From:http://finance.sina.com.cn/money/nmetal/20140217/091818233269.shtml

东方网2月17日消息：据《劳动报》报道，下跌了一年的国际金价今年开局走势逆转。上周，国际金价创6个月来最大涨幅，收盘再次站上"千三"；而春节后，国内金饰品价格和销量也纷纷上扬。业内人士表示，若金价继续上涨，黄金(1328.60, -0.40, -0.03%)投资有望再次迎来"中国大妈"的抢购。"双节"金饰量价齐涨

马年以来，金价不断上涨。记者了解到，"中国黄金"上周情人节当天基础金价为256元/克，而春节前1月28日的基础金价则为247元/克，上涨了3.6%；周大福[微博]千足金饰品金价1月30日的价格为322元/克，2月16日则上涨到335元/克，涨幅超过4%。

"从节中节后整体销售情况来看，金饰品销量好于投资金条，而在金条中，马年生肖金条相对走俏。""中国黄金"相关人士昨日告诉记者，虽然金价比前期有所上涨，但情人节、元宵节的金饰品销量同比仍上升了20%。

据上述人士分析，金饰品之所以在春节后继续保持旺销，一方面依靠"双节"销售拉动，还有品牌注重金饰品促销等因素；另一方面，虽然近期金价上涨，但相比去年同期，金饰品价格仍处于低位。

金价一周涨51美元

上周，盘中黄金价格最高触及1321.20美元，最低124.0美元，收盘1318.10美元，较前一周大涨51.18美元，涨幅4.04%。

采访中，新湖期货贵金属分析师展大鹏向记者分析，前一周疲弱非农令美联储缩减QE预期降温，此外，受耶伦国会证词称将延续伯南克政策、美国零售销售等数据不佳和突破200日均线技术支撑等多重利好带动，上周现货黄金大涨51美元，创6个月来最大周涨幅。

对于后市，展大鹏表示看好一季度金价。"1月份以来，金银一改颓势纷纷上涨，基本吞并了去年12月份以来的跌幅。这是由于贵金属2012年以来的看空逻辑在2014年初发生了一些转变，一季度价格存在上涨机会。"他分析道。

"中国大妈"或再现市场

虽然去年金价跌了一年，但中国黄金消费量超过印度，成为全球最大黄金消费国。来自中国黄金协会相关数据显示，2013年，中国黄金消费量达到1176.40吨，首次超过1000吨。

展大鹏表示，从中国的需求结构来看，受到国庆和春节黄金饰品需求大幅增加的影响，一季度和三季度黄金消费需求都会出现大幅上涨。基于以上因素的综合考虑，一季度维持金银走势谨慎乐观的判断。

"如果金价继续上涨，投资金条有望继去年之后再次迎来"中国大妈"抢购。"上述"中国黄金"相关人士向记者表示："虽然投资金条的价格走势与金饰品一致，但看重投资因素的顾客，买涨不买跌的心理相对更重。"

Source:http://finance.sina.com.cn/money/nmetal/20140217/091818233269.shtml

18 February 2014 - It’s official: China overtakes India as top consumer of gold

18 February 2014 - It’s official: China overtakes India as top consumer of gold

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