Gold Demand Update
Gold briefly pushed through $1300 this morning for the first time in 5 months. The year is starting off well for the yellow metal. According to an article on ZeroHedge, GLD the largest gold ETF, saw holdings increase 1.9% on Friday, the biggest single day increase in almost 5 years. (Source: ZeroHedge 01/20/2015)
The article went on to say that total Gold ETF holdings increased by 843,000 ounces over a two day period which was the biggest rise since Nov. 2011. Traders and investors are again discovering that holding Gold in an uncertain currency environment makes a lot of sense.
Reports are also surfacing about hedge funds starting to get back into Gold. Net long positions rose 5.7% to 98,391 futures and options in the week ended Dec. 30th after dropping 11% in the previous two weeks. This is according to data published by the US Commodity Futures Trading Commission on Jan. 5th. (Source indiatimes.com 01/07/2015.)
Germany Makes Progress with Gold Repatriation
According to a Yahoo article, in 2014, Germany repatriated 120 tonnes of Gold from storage locations overseas; 35 tonnes from Paris and 85 tonnes from New York. German Gold reserves are second in the world totaling 3384.2 tonnes this month, according to latest data from the World Gold Council. (Source: Yahoo 01/19/2015)
Some additional facts that were provided by the article stated that since 2013, the Bundesbank said it has relocated a total of 157 tonnes to Frankfurt; 67 tonnes from Paris and 90 tonnes from New York. The original plan in 2013 was to bring back a total of 674 tonnes by 2020.
Russia has also continued to participate in the Gold market. According to an article on ZeroHedge, Russian Gold Reserves rose by their largest amount in 6 months in December to just over $46 billion. In addition for the 20th month in a row, Russia’s holdings of US treasury debt fell year-over-year. (Source: ZeroHedge: 01/18/2015)
Late last year we saw a possible trend developing where Central Banks want to store more of their Gold at home. With all of the currency volatility, it is possible that Central Banks will increase Gold holdings as percentage of foreign reserves in 2015. This is something to watch.
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