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Analysts: China’s Central Bank Still Accumulating Gold

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China’s central bank remains a noted gold buyer, accumulating metal for five months in a row, say analysts with SP Angel and Commerzbank. SP Angel cites data on the People’s Bank of China website this week showing gold reserves rose to 61.1 million ounces in April from 60.62 million a month earlier. “In tonnage terms, last month’s inflow totaled 14.9 [tonnes] and the increase follows the addition of almost 43t in the four months through March,” SP Angel adds. Commerzbank notes that since the Chinese central bank began its latest series of purchases in December, the PBOC has built up its gold holdings by nearly 60 tonnes. “That said, the PBOC’s gold reserves are still very low by international standards, at just 2.5% or so [of total foreign-exchange reserves],” Commerzbank concludes.

By Allen Sykora of Kitco News; asykora@kitco.com

 

UBS: Lower Car Sales Hurt Palladium, But Market Still In Deficit

Wednesday May 8, 2019 09:25

Palladium prices have fallen some 18% from the record highs set back in March, but the market’s supply/demand fundamentals remain favorable, says UBS. “The correction suggests that the market had gotten ahead of itself and is in need of some healthy consolidation,” UBS says. “Weak car sales have also likely weighed on sentiment and prices, given 80% of palladium demand comes from the auto sector.” U.S. car sales were down from a year ago in April, and Chinese car sales were also weak in March, the bank says. However, UBS looks for China’s auto sector to be resilient despite trade tensions with the U.S., since 95% of the cars made in China are sold domestically. Meanwhile, analysts note that even if global car sales dipped, the metal may benefit from more loadings into auto catalysts in order to meet stronger emissions standards in parts of the world. “We reiterate our view that although car sales are softer, higher loadings given stricter emissions standards should act as an offset and therefore continue to drive growth in palladium demand,” UBS says. “Supply continues to be constrained, with above-ground inventories having been drawn down persistently over the past several years of deficits.” The bank concludes: “We expect the market to remain in deficit over the next few years, which implies that the market should get tighter as existing inventories continue to be drawn down.”

By Allen Sykora of Kitco News; asykora@kitco.com

 

Commerzbank: India's Gold Imports Rise Sharply In April

Wednesday May 8, 2019 09:25

Indian gold demand picked up noticeably last month, reports Commerzbank. Analysts cite preliminary data from the country’s Ministry of Finance showing that India purchased 121 tonnes of gold in April. “Imports were thus significantly higher than in March (73 tonnes) and more than twice as high as last April (just short of 53 tonnes),” Commerzbank says. “The gold price in Indian rupees has fallen significantly since mid-February, making gold more attractive for the price-sensitive Indians. What is more, April was still the wedding season, during which a lot of gold is normally given as gifts. In addition, one of the highest Hindu festivals in India took place yesterday, Akshaya Tritiya.” This tends to be another gold-giving occasion, Commerzbank explains.  “Apart from gold traders and jewelry manufacturers, the Indian central bank has presumably also been contributing to the higher gold imports in recent months,” Commerzbank says. Analysts cited data from the International Monetary Fund showing India upped its official-sector gold holdings by 3.7 tonnes in March.

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