Reuters reported on January 8th ” ICBC Standard Bank is buying the lease on Deutsche Bank’s London gold and silver vault, enlarging its footprint in the city’s bullion market, four industry sources close to the companies said on Friday.
“China’s ICBC, which took a controlling stake in Standard Bank’s London-based Global Markets business last year, has also applied to become a clearing member of the London gold and silver over-the-counter business.
“No one at ICBC Standard Bank was immediately available to comment and Deutsche Bank declined to comment. The Chinese and South African lender is aiming to fill the gap left by Western banks, which are retreating from commodities to cut costs and reduce regulatory burden..
LONDON, Jan 8 ICBC Standard Bank is buying the lease on Deutsche Bank’s London gold and silver vault, enlarging its footprint in the city’s bullion market, four industry sources close to the companies said on Friday.
China’s ICBC, which took a controlling stake in Standard Bank’s London-based Global Markets business last year, has also applied to become a clearing member of the London gold and silver over-the-counter business.
No one at ICBC Standard Bank was immediately available to comment and Deutsche Bank declined to comment.
The Chinese and South African lender is aiming to fill the gap left by Western banks, which are retreating from commodities to cut costs and reduce regulatory burden.
Picture credit Boomberg
# Note added 8th January 2016
December 15, 2015
Bloomberg News asked dozens of former and current diplomats, geopolitical strategists, security consultants, and economists to identify the possible worst-case scenarios, based on current global conflicts, that concern them most heading into 2016.
# Trump wins U.S Presidency
# Oil climbs to $100 per barrel
# The UK leaves the European Union
# Banks hit by cyber attack
# The EU crumbles under anti-immigration fears
# China’s economy falls, military rises
# Israel attacks Iran’s nuclear facilities
# Putin sidelines America
# Climate change heats up
# Latin America’s lost decade
Goldwatcher Comments are being published in the Goldwatcher Investor Literacy page
GOLD : FUTURE SUPPLY, DEMAND DYNAMICS & PRICE INDICATIONS
CPM Group founder and Chief Executive Jeffrey Christian is one of the world’s best informed and most respected commentators on gold. He understands global macro economics, finances gold investing and trading, knows the nuts and bolts of the gold mining industry and publishes reports on all aspects of gold and precious metals. His extensive presentation on The State Of The Gold Market at the Denver Gold Forum meeting last week looks ahead a few years, projects demand recovering from next year with positive supply and demand dynamics ahead. It’s essential reading for investors.
MOVING ON FROM THE GOLDWATCHER:
This BLOG was launched to support The Goldwatcher- Demystifying Gold Investing when Wiley commissioned me to write the book in March 2007.
After repeated hacks that forced us off line twice we relaunched in December last year when friends, driven into frenzies of anxiety by apocalyptic warnings and get rich quick with with gold fantasies, wanted to know what I thought. They will have found the information I posted since then useful.
However by the end of last year content on The Goldwatcher was already more about global events than gold and gold mining. To support a book I am writing on Information, Simple Arithmetic and Common Sense as essential safeguards for investors I launched The Globewatcher and Investor Literacy blogs . Both already have a few headline commens on subjects being addressed in my new book.
I will continue to Tweet as JohnKatz Goldwatcher
Thanks for following us: Hope you will now follow
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Jeff Christian Denver September 2015
CHART GOLD HOLDINGS IN EXCHANGE TRADED PRODUCTS COURTESY OLE HANSEN SAXO GROUP
The above chart tweeted by Ole Hansen reflects two important fundamental developments – further clearance of the overhang of speculative gold in Exchange Traded Products and a significant revival in Indian demand that needs to be reviewed in relation to the Indian Government’s initiatives to monetise gold hoarded in the country aimed at reducing future imports.
Speculative interest in gold may also have been spiced up by the current political impasse over the US Budget that must be resolved by the end of September to avoid any shut down of Government activities. This is potentially unsettling. But the issue will almost certainly be resolved without any shut down that acually interrupts significant Government activities.
Financial markets are already unsettled by these and other concerns including economic problems in China and recent revelations on Volkswagen’s deception on emission measurement – serious on its own and possibly involving other manufacturers. These concerns may also have influenced increased speculative interest in gold. But, unlike the important supply and demand factors illustrated in the chart above, they don’t affect fundamental supply demand dynamics.
No Clear Trend – Bets Both Ways Look Balanced
Chart courtesy Ole Hansen Saxo Trading
UPDATE; 25th August 13.30 GMT:
The People’s Bank of China cut its main interest rate by 0.25 percentage points to 4.6% after two days of stock market turmoil.
It is the fifth interest rate cut since November and will take effect on Wednesday.
The move has boosted European share prices further, with the FTSE 100 in London jumping 3.3% after the China move.
Blog Posting 10.30 a.m. 25th August 2014:
In a comment Pressure Mounts on China to Act Scott Minerd, Glocal CIO Guggenheum Partners writes:
“…the PBoC will soon be forced to reduce bank reserve requirements while allowing for a more rapid devaluation of the RMB. Time is not on the side of Chinese policymakers. Given the severity of the current domestic slowdown, pressure is mounting for more radical policy action.
“Expect to see further downward pressure on commodity prices, global equities, and U.S. Treasury yields. The first sign that we are approaching a bottom for all three will be when China caves and allows the RMB to adjust to a more appropriate level, which could mean another 25–30 percent decline in the value of the RMB against the U.S. dollar.
“Things will get worse before they get better, and investors around the world are demonstrating appropriate concern. Unfortunately, relief is nowhere in sight.”
Gold is likely to be back on the agenda of investors “demonstrating appropriate concern” over adverse developments and uncertainties.
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TWITTER : @JohnKatzGoldwatcher
The World Gouncil published the following schedule on Q2 2015 demand yesterday reflecting a 12% decline in total demand from the previous quarter with demand declines in every category.
||Q2’15 vs Q2’14
|Total bar and coin demand
|Physical Bar demand
|ETFs & similar products*
|Central bank & other inst.
|LBMA Gold price, US$/oz
Following this extremely negative news the FT reported this morning : “China released data on its gold holdings for the second time in a month on Friday, saying it had bought 19 tonnes of gold last month as prices traded at their lowest levels in five years. The People’s Bank of China said it increased gold holdings to 1,677 tonnes (53.93m fine troy ounces) at the end of July, an increase of 1 per cent.”
Goldwatcher analysis stresses the importance of central bank activity. Sustained interest by China is of special importance as she is on track to being the world’s largest economy by 2016 with the Remninbi expected to be included as a component of the IMF’s SDR basket within the next few months.
Chart illustrating Gold priced in offshore Remninbi Courtesy Ole Hansen Saxo Bank
“What a difference one announcement makes, especially when that announcement comes from China and it involves its currency which has been very steady for a long time against the dollar while many other currencies have weakened.”
Commodities recovered a bit on Monday only to be struck down in flames on Tuesday when the Peoples Bank of China announced its new fixing mechanism which essentially opens the door for a continued devaluation. The fact that the weakening of the currency has continued today has left the market with the unpleasant guessing game of how far they are prepared to let it go. Our FX Strategist John Hardy is looking at a potential 10% devaluation before the PBoC halts the slide.
Commodities most affected by China demand
Chart Courtesy Saxo Bank
The previous Goldwatcher posting illustrated emerging market currencies in freefall. 4.5% Remninbi adjustment in two days isn’t free fall Remninbi but loss is significant. Short covering rally is likely to support the gold price.
“I suspect the move will stop as quickly as it began at some unknowable point in the very near future (perhaps 6.80 area in USDCNY where the rate was fixed during the global financial crisis and representing approximately a 10% move?) and then the PBoC will try to make things as boring as possible.”