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Gold Falls In USD After Good Jobs Number But YTD +3.4% IN GBP, +9% In EUR

Today’s AM fix was USD 1,207.50, EUR 956.06 and GBP 751.03 per ounce. 
Yesterday’s AM fix was USD 1,214.50, EUR 960.99 and GBP 750.94 per ounce.

Gold fell 1% in dollar terms after the better than expected U.S. jobs number. However, the dollar also gained by 1% against the euro, by 0.8% against the pound and was higher against all fiat currencies (see table). 

Thus, gold’s fell primarily in dollar terms and remained strong in other currencies. The same trend seen in recent months.

Gold in Singapore had ticked lower from  $1,214 per ounce to over $1,207 per ounce and gold remains weak and at these levels in late morning trade in London.

Gold fell $0.80 or 0.07% to $1,213.80 per ounce and silver slipped $0.08 or 0.47% to $17.10 per ounce yesterday.

Gold in Euros - 2 Years (Thomson Reuters)

It is important to note that gold’s falls continue to be primarily in dollar terms and that gold in euros and pounds has seen only minor falls. 

Indeed, gold in euros remains nearly 10% higher for the year and has risen from €876 per ounce at the start of the year to over €956 per ounce today.

Gold in British pounds has risen from £727 to £750 per ounce for a gain of 3.3%.


Gold in British Pounds - 2 Years (Thomson Reuters)

Physical demand remains robust in Asia and we are seeing a pick up in western markets now too. Data from the U.S. Mint and Perth Mint show that safe haven bullion coin buying returned in September as western demand increased.

The U.S. Mint sold over 50,000 ounces of American Eagle gold coins so far in September, its highest monthly sales since January. The Perth Mint's sales of gold coins and bars hit their highest in nearly a year in September. Sales of gold bullion coins and minted bars rose to 68,781 ounces in September, their highest since October 2013.

The world’s largest bullion buyer, China imported more gold in September than in the previous month due to demand from retailers stocking up for the current National holiday. 

In the last month, withdrawals from the SGE have totalled over 170 tonnes – this suggests an annual rate of over 2,200 tonnes. "The physical volumes have been high this month compared to August. I would say imports could be at least 30% higher than last month," a trader with one of the 15 importing banks in China told Reuters.


Gold in US Dollars - 2 Years (Thomson Reuters)

Meanwhile,  demand in India - the second biggest buyer of gold - has also picked up significantly in recent days as the festival and wedding season began in earnest.

Prithviraj Kothari, vice president of the India Bullion & Jewellers' Association told the Reuters Global Gold Forum in an interview that there is currently “huge physical demand in India in every sector.”

Indian demand may be double that of last year, he believes.

Gold ETF inflows are likely to resume as silver inflows have already done.

Speculators continue to sell paper and electronic gold while prudent buyers in China, India and elsewhere  continue to accumulate physical bullion.

This dichotomy can only last for so long before the powerful forces of actual physical demand in the small physical gold market lead to higher prices.