Following up on my Sep 18 post gold has bounced a couple of times off sub $1210 level which is encouraging. I note there was another 5 tonnes of kilobars withdrawn out of Comex on the 23rd and by my calculation there is still another 10 tonne of kilobars in Comex still to come out.
SGE premiums have been moving up and currently at 1.05 yuan/gram and this matches the premiums Perth Mint has been getting on kilobars, which have increased since my last post. Part of that demand has been related to the SGE International Board launch but our dealers' feedback is the $1200 level is also drawing out renewed Asian interest.
What I didn't see on the 18th was any positive narrative around gold, but that has changed. First up we have this Reuters article which runs with the mine cost/closure narrative:
"$1,200 is a critical level. The industry has geared itself around $1,200," said Joseph Foster, portfolio manager at institutional investor Van Eck Global. "If it falls below that level, then there are a lot of mines around the world that are really going to struggle."
This is an important narrative for gold, and I've mentioned it before here. Then we had these two headlines:
Bloomberg: Gold Premiums in India Seen Doubling on Festival Demand
Gulf News: Weak gold prices has Dubai consumers clamouring for more
On the negative side re narrative Goldman are still downbeat on gold and stocking to their $1050 call and the strong dollar story is the biggest risk to gold breaking $1180.