Tuesday March 11, 2014 8:22 AM

China Gold Association says gold demand may fall 17%, to 250 metric tons, in the first quarter of 2014, versus 300 tons in the first quarter of 2013, HSBC says, citing a Bloomberg News story.  In the Bloomberg story, Zhang Yongtao, CGA’s vice chairman, said 2014 annual demand is forecast to be unchanged at 1,176 tons versus 2013, and 2014 annual mine supply is expected to remain mostly unchanged at 428 tons versus 2013, HSBC says. “A simple math calculation based on Mr. Zhang’s forecast would indicate that China’s gold demand should be stronger for the rest of 2014 after 1Q, when compared to the same period in 2013. This may indicate that China’s strong appetite for gold is likely to be sustained well into 2014, in our view,” HSBC adds.

By Debbie Carlson of Kitco News;  dcarlson@kitco.com

 

Stronger Eurozone Car Sales May Support Platinum Prices – HSBC

Tuesday March 11, 2014 8:22 AM

Monthly eurozone car sales are expected to increase by 6.8% year-over-year for February and 9.3% year-over-year for March, says HSBC’s automotive equity analyst. However, the first quarter may mark the peak of eurozone sales growth as this is likely due to a lower base, Schneider says. The first quarter of 2013 was colder in terms of temperature versus first quarter 2014 in Europe, which may have held back customers auto purchases, Schneider says. “Automobiles in the eurozone tend to use diesel-based engines, which have heavier weightings in platinum over palladium, while automobiles in the U.S. and China tend to use gasoline-based engines, which have heavier weightings in palladium over platinum. Subsequently, a pick-up in eurozone auto demand would be more positive for platinum than for palladium, in our view. Meanwhile, the China Association of Automobile Manufacturers said China’s auto sales increased by 11.3% year-over-year for the first two months of this year. This would be more positive for palladium than for platinum, we believe,” says Jim Steel, HSBC metals analyst.

By Debbie Carlson of Kitco News;  dcarlson@kitco.com

 

SPDR Gold Trust Holdings Rise 7.5 Metric Tons Monday

Tuesday March 11, 2014 8:22 AM

Holdings in the world’s largest physically backed gold exchange-traded fund, the SPDR Gold Trust (NYSE: GLD) rose 7.5 metric tons Monday, the largest since Feb. 13, the fund administrator says. Global ETFs are up 570,000 ounces so far for March, which lowers the year-to-date outflows to 87,000 ounces, UBS says. Comparatively to this time a year ago, there were about 5.3 million ounces of outflows, UBS says. “Interestingly, the GLD fund has accounted for the bulk of the inflows and currently makes up 56% of the ETF buying this month. The improvement in ETF investor sentiment towards gold is also helping the market hold well at current levels, in spite of over-extended spec (speculative) positioning and easing physical demand,” they add.

By Debbie Carlson of Kitco News;  dcarlson@kitco.com

 

PGM ETFs See Divergence In Holdings – UBS

Tuesday March 11, 2014 8:22 AM

Investor interest In platinum group metal exchange-traded funds are diverging, says UBS. Year-to-date,  global platinum holdings are up 14,300 ounces, while palladium holdings are down three times as much, with a net outflow of 47,900 ounces. “The bulk of the outflows in palladium ETFs occurred in February and came mostly from the ETFS fund – much of that has been reversed by March inflows, although not fully offset,” UBS says. Strong buying has also been evident in platinum for March, and this has more than offset the 20,000 ounces sold in January, the bank says. “These flows highlight the recent acceleration in concerns of PGM markets tightening as prolonged strike action in South Africa is amplified by the risk of Russian sanctions potentially restricting supply further, especially for palladium,” UBS says.

By Debbie Carlson of Kitco News;  dcarlson@kitco.com

 

Gold Seeks New Catalysts – UBS

Tuesday March 11, 2014 8:22 AM

Gold is consolidating the sharp move witnessed in the first quarter, UBS says, and is currently seeking new catalysts. “There is a reluctance to aggressively push the market higher here considering the recent upside surprise in U.S. data and the lack of significant fresh news flow on the Ukraine crisis. In addition, positioning has continued to expand, and is now starting to look overly stretched at 15.3 (million ounces), the highest level in a year. It is understandable that investors would hesitate at these heights, but there is also no strong appetite to liquidate recent longs or re-establish shorts yet given continuing uncertainty in Ukraine and Russia. There are lots of headline risks ahead and choppy price action is likely to continue. But with the Fed (Federal Reserve) due to meet next week, gold could well remain in no-man’s land until then. From a technical perspective, gold needs to take out resistance at $1,362 to stay northbound,” the firm says.

By Debbie Carlson of Kitco News;  dcarlson@kitco.com

 

Yen Holds As BOJ Leaves Monetary Policy Unchanged – BNP Paribas

Tuesday March 11, 2014 8:22 AM

The Japanese yen held steady as the Bank of Japan left its monetary policy unchanged at its meeting earlier Tuesday and gave no indication of any further easing actions, says BNP Paribas. “Our economists note that market participants are more focused on the second meeting scheduled for April as a possible time frame for additional monetary measures, with the central bank’s semi-annual forecasts available at that time. Our own economists do not expect additional monetary measures this year, implying some scope for disappointment for yen bears at some stage in the next few months,” the bank says. Still, they add, firming U.S. Treasury yields and rising Japanese investor demand for foreign securities because of persistent weakness in the Japanese current account balance may ultimately weigh on the yen.

By Debbie Carlson of Kitco News;  dcarlson@kitco.com