SWOT Analysis: Central Banks Scooping Up Gold This Christmas
By: Frank Holmes
GoldSeek.com
Monday, 24 December 2018
Strengths
The best performing metal this week was gold, up 1.39 percent. Gold traders continue to be bullish on the yellow metal amid concerns about economic growth, as measured by the weekly Bloomberg survey. ETFs backed by gold saw holdings increase for 10 days straight, bringing this year’s net purchases to 1.47 million ounces, according to data compiled by Bloomberg. Gold stocks did well this week as the spot price of gold broke above its 200-day moving average for the first time since this summer. Not only is bullion set for a third straight month of gains, it’s also set for the best quarter since 2017, as equities become shaky and the dollar heads for its worst week since March. Hedge funds raised their net long position in the gold futures market to a six-month high.
Demand for gold in India has been falling, due in part to government measures and higher local prices, which has forced jewelers to adapt online purchases to be more appealing to young buyers. Retailers are offering gold for just one rupee, then buyers will receive physical delivery of their gold once they have paid enough for one gram of gold, which stands around 3,200 rupees, reports Bloomberg. This low barrier of entry, it is hoped, will spark greater demand, and since its launch last year, about 3 million people have already transacted on the online platform.
Several central banks are buying up gold just in time for Christmas. Turkey has continued to increase its holdings week after week. They’ve risen by $257 million from last week, bringing total reserves to $19.6 worth of bullion. Russia’s reserves of the yellow metal climbed to 66.43 million ounces in October, up from 65.47 in September. Bloomberg data shows that India has also been steadily adding to its holdings this year and that Mongolia added ounces in October. Swiss gold exports rose 57 percent in November to 126.8 tones; however, imports fell 30 percent to 144.5 tons, according to data on the Swiss Federal Customs Administration website.
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