Morning Gold & Silver Market Report – 4/18/2013

Geoffrey Varner

4/18/2013 8:12:00 AM

PHYSICAL GOLD DEMAND STAYS STRONG

The Gold price rallied in overnight trading, up from its two year low of around $1,320. The nearly week-long sell off of the Precious Metal has created a unique situation for investors. The significant drop in price has triggered physical buying of Gold bars and coins in Asia while domestically Gold coins have been selling at a record pace. On the other side of the Gold equation is the Exchange Traded Fund (ETF). Holdings of the world’s largest ETF have fallen to their lowest in three years. It’s the story of paper Gold vs. physical Gold. The demand for the physical product is up, so much so that premiums for the Precious Metal are rising all over the world. Premiums for Gold bars in Hong Kong were at their highest since early last year. In Singapore and Tokyo, Gold premiums were also at multi-month highs.

Ross Norman, CEO of Sharps Pixley, said “Rarely has the Gold market seen such a clear split, with the paper traders heading south while the physical heads north.” He additionally says that with inventory being snatched up by investors, dealers can expect to wait a few weeks for new supply from the refiners. In India and China, jewelry demand has surged as consumers there take advantage of the drop in price. In fact, the China Gold Association reported that retail sales tripled across China April 15-16.

At 9:11 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,391.00, Up $5.30.
• Silver, $23.32, Down $0.09.
• Platinum, $1,428.50, Down $7.90.
• Palladium, $671.50, Up $9.20.

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