From Adrian Ash<\/p>\n
\nBullionVault<\/a><\/p>\n \n As Beijing Sticks with \u201cAnything-But-Rate-Hikes\u201d Strategy<\/strong><\/p>\n <\/strong><\/p>\n \nWHOLESALE PHYSICAL GOLD<\/strong> hit a 3-session Dollar high in London on Monday morning, rising together with equity and commodity prices on what one trader called \u201crelief\u201d that Beijing did not hike Chinese interest rates as expected at the weekend.<\/p>\n \nThe Euro also rose to its best level since Thursday vs. the Dollar, capping the gold price in Euros<\/a> at Friday’s finish beneath \u20ac33,750 per kilo \u2013 its second-highest ever weekly finish.<\/p>\n \nWestern government bonds extended their fall, driving yields higher across the board.<\/p>\n \n“The physical market is very good,\u201d says Hong Kong head of dealing Peter Fung at Wing Fund Precious Metals.<\/p>\n \n\u201cBullion traders and some jewellers are buying, as well as some individual customers who prefer to sell currency and buy gold<\/a>.<\/p>\n \nBut \u201cThe potential for further tightening in China remains a risk,\u201d says a Beijing commodities trader, speaking to Bloomberg.<\/p>\n \nThat \u201ccould affect demand for commodities, and gold could be caught in a sell-off,” says Ong Yi Ling at Philip Futures in Singapore, speaking to Reuters.<\/p>\n \nStill following what the Financial Times<\/em>‘ Alphaville blog calls China’s \u201canything-but-rate-hikes strategy\u201d, Beijing’s annual economic planning meeting closed Sunday with promises but no further action to stem inflation \u2013 now rising at a 28-month record of 5.1% per year.<\/p>\n \nThe bulk of China’s massive household savings are currently kept in cash accounts, and bank-deposit interest rates are currently just 2.25%.<\/p>\n \nChina’s private demand to buy gold<\/a> rose by more than a fifth in the 12 months to end-Sept. according to data compiled for market-development group the World Gold Council.<\/p>\n \n“Consumer prices will be stable as long as ministries and regional authorities earnestly implement the central government’s measures,” says state statistician Sheng Laiyun, speaking to the official Xinhua news agency.<\/p>\n \n\u201cGold is rising along with other commodities as investors buy raw materials in anticipation of even higher prices,\u201d reckons Liu Yangyi at Zhong Jing He Investment in Beijing.<\/p>\n \n\u201cChinese [traders] were actively buying gold<\/a> and Japanese traders buying platinum overnight in Asia,\u201d agrees a London dealer.<\/p>\n \nTokyo gold futures<\/a> contracts rose 0.5% overnight \u2013 coming within 1% of last week’s new 27-year highs \u2013 as the Japanese Yen also rose vs. the Dollar.<\/p>\n \nSilver prices<\/a> extended Friday’s late rally, regaining half of last week’s near-9% drop at $29.47 per ounce.<\/p>\n \n\u201cWe see support [for silver prices<\/a>] at $27.90 and the 4-month bull channel comes in at $26.51,\u201d says the latest technical analysis from Scotia Mocatta.<\/p>\n \n\u201cWe suggest the [speculative] market will remain long while the trend line holds.\u201d<\/p>\n \n“Compared with gold, the price of silver still has a long way to go,” reckons Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, quoted by the Economic Times of India.<\/p>\n \nBut \u201cGold will outperform silver,\u201d believes technical analyst Stephanie Aymes at Societe Generale in London, after the cheaper metal hit a four-year high relative the\u00a0 gold price<\/a> last week.<\/p>\n \n\u201cThe gold-silver ratio reached an important support at 47.5\/46,\u201d she says, forecasting a drop in silver’s relative price to \u201c56 or 58\u201d per ounce of gold.<\/p>\n \nAdrian Ash<\/p>\n \nBullionVault<\/a><\/p>\n \nGold price chart, no delay<\/a> |\u00a0\u00a0 Buy gold online at live prices<\/a><\/p>\n \nFormerly City correspondent for The Daily Reckoning in London and head of editorial at the UK’s leading financial advisory for private investors, Adrian Ash<\/strong> is the editor of Gold News<\/a> and head of research at BullionVault<\/a> \u2013 winner of the Queen’s Award for Enterprise Innovation, 2009 and now backed by the mining-sector’s World Gold Council<\/a> research body \u2013 where you can buy gold today<\/a> vaulted in Zurich on $3 spreads and 0.8% dealing fees.<\/p>\n