This Month in Gold – April 2014

Deutsche Bank Resigns London Fix Seat
Reuters – Deutsche Bank has resigned its seat on the London gold and silver fixes as part of a larger decision to end the majority of its commodities-related business. Deutsche Bank could find no buyer for its seat, perhaps due in part to a US lawsuit that accuses the five London gold fix banks of price-rigging. Deutsche Bank has held its position on the fixes for two decades and officially leaves on May 13th. Just four banks will be left to set the gold fix – Barclays, HSBC, Bank of Nova Scotia, and Societe Generale. Just two – HSBC and Bank of Nova Scotia – remain to set the silver fix. Read Full Article>>

China Gold Demand to Grow 25%
Bloomberg – Chinese gold demand will grow 25% by 2017, according to the World Gold Council. Last year, China’s gold consumption rose 32% to 1,065.8 metric tons, and an expanding economy with higher personal incomes will support further growth. China’s economy is expected to grow 7.4% this year – more than double the forecast for US growth. The middle class is predicted to expand more than 60% in the next six years to 500 million people. Current household gold holdings are about $300 billion. China made up 28% of global gold use last year.  Read Full Article>>

China Allows Beijing Gold Imports & Shanghai Gold Leasing
Reuters & Bloomberg – China is now permitting gold imports through Beijing in the first quarter, making it the third domestic point of entry for the metal after Shenzhen and Shanghai. Industry sources believe the PRC is trying to discreetly boost its official reserves without disclosing how much gold it is buying by circumventing trade with Hong Kong. Meanwhile, the Shanghai Gold Exchange will begin gold leasing in the first half of 2014. With a growing number of participants in the Chinese gold lending market, the exchange wants “to set up a platform to help standardize the deals and lower transactions costs.” Both moves signal that China continues on a path of liberalizing precious metals markets. Read Beijing Article>> Read Shanghai Article>>

Platinum & Palladium to Rise on Supply Constraints
Wall Street Journal – Platinum and palladium prices are expected to rise on increased supply and demand pressures. The use of the metals in catalytic converters accounts for 37% and 72% of global demand for platinum and palladium respectively. HSBC predicts demand for palladium to be 1.06 million ounces more than supply in 2014. Limited supply for both metals is due to issues in Russia and South Africa. Russia accounts for 40% of the world’s palladium, and analysts believe it has nearly depleted its reserves. A 3-month strike in South Africa has cost metal producers at least 500,000 ounces of platinum and 100,000 ounces of palladium. South Africa supplies the world with 80% of its platinum and 37% of its palladium. Read Full Article>>

US GDP Growth Almost Zero in First Quarter
Wall Street Journal – The US economy grew at a seasonally adjusted 0.1% in the first quarter of 2014, according to the Commerce Department. Poor weather and low overseas exports are being blamed. Business spending on equipment, buildings, and intellectual property saw their first declines in a year. US exports saw their largest drop since the end of the recession, falling 7.6% over the quarter. Residential fixed investment, such as home improvements, saw a second straight quarterly decline. Read Full Article>>

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