Welcome to a very brief overview of the recent performance in the markets. The essentials are captured in the table below and each week we will show a chart of interest.
Gold’s impressive rally continues with prices testing $1,348 on Friday as the markets remain risk-averse, beating the intraday high of mid-February and reaching levels last seen in April 2018. In many local currencies the price had already been at record highs for a good part of this year but euro prices had been underperforming; now the local price is at its highest since mid-April 2017 (see chart). Plenty of fresh longs and massive short-covering in the week to Tuesday 4th June have seen the net Managed Money position on COMEX rise to 299 tonnes, the highest since 24th April 2018, with the outright short now at its lowest since 12th June last year. Silver has enjoyed a degree of catch-up, trading over $15 on Friday and with the gold silver ratio coming back slightly to 89.4.
Bloomberg has quoted knowledgeable sources to the effect that Venezuela has defaulted on a 2016 loan that was due to mature in 2021, but which has been settled early due to missed interest payments. The collateral was 20 tonnes of gold (at current prices that equates to $859M). This does not mean that 20t of gold is about to hit the market; whatever Deutsche does would be expected to be non-disruptive.
India gold imports in May rose 36% against year-ago levels as low prices stimulated heavy purchases for Akshaya Tritiya, which is the second most auspicious day for gold purchases in India, while purchases for weddings were also high. Press reports suggest imports of 106t against 78t in May 2018. Gold is a vital key in the Indian wedding season as generally when a bride brings her dowry to the marriage the ownership passes to the husband – except for the gold, which stays with her and traditionally gives her a degree of security. India is the world’s second largest consumer of gold with the emphasis very much on jewellery and medallions.