GOLD PRICES in the London bullion market briefly topped $2000 per ounce for the 8th time so far this week Wednesday lunchtime as Western banking stocks fell once again and new data confirmed that China's world-leading appetite for physical gold continues to hold strong in 2023.
Despite firmer US economic data, the US Dollar meantime edged back from yesterday's rally on the currency markets, falling towards the multi-month lows touched in February and March on its trade-weighted index against the rest of the world's major currencies.
That saw gold priced in Euros drop back €20 from Tuesday's peak to trade at €1806, while the UK gold price in Pounds per ounce held above £1600 – a new all-time high when first hit during last month's US and Swiss banking crises.
"Surging gold demand worldwide reflects further recognition of the metal's value as a 'safe haven'," says state-run Chinese media outlet Global Times today, quoting former China Gold Association secretary-general Zhang Bingnan, "as the weakening of the US economy and repeated economic and financial crises have undermined other countries' confidence in the US Dollar."
Yesterday's 50% plunge in shares of First Republic (NYSE: FRC) – spurred by $100 billion depositor withdrawals during Q1 and worsened by management failing to invite analysts' questions on its earnings call – saw the S&P index of US banking stocks drop back towards last month's 2.5-year low.
With US GDP figures for January to March due out Thursday, plus PCE inflation on Friday and then a rate-rise from the Federal Reserve looking certain next week, separate data today said US manufacturers enjoyed a jump in new orders for durable goods last month – led by transportation equipment –while the world's largest economy also trimmed its massive trade deficit towards the smallest in 2.5 years.
That saw longer-term interest rates in the bond market edge higher from yesterday's 3-week lows, while betting in the futures market put the consensus forecast for Fed interest rates by year-end at 4.4% per annum, more than 2/3rds of point below where next week's widely-expected rise will take the cost of borrowing.
Despite gold priced in Chinese Yuan reaching fresh record highs last month, export data from Switzerland today said that the global bullion refining hub sent the most gold to the precious metal's No.1 consumer nation last month since July, but shipments to No.2 and No.5 gold consumer nations India and Turkey slipped as prices jumped on the mini-crash in Western banking shares.
" Gold consumption has been hot since the start of 2023," the Global Times quotes one jewelry retailer after separate figures yesterday showed that household gold buying grew yet again in the January-to-March period.
"[While] some consumers now prefer gold jewelry with lower weight due to soaring gold prices, May is traditionally a peak season for gold consumption and the upcoming May Day holiday is expected to power more consumption."
Like gold prices, silver bullion for settlement in US Dollars today flipped around a key level, trading back above $25 per ounce – a 13-month high when reached at the start of April.
Platinum again tried to push back above $1100 while palladium held just above $1500 per ounce.