Chinese Dip-Buying Bolsters Gold as Prices Find Floor at $4,000

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Or sign-in if you have an account.dkf(kmds]8jjqce2pc6)mn9p_media_dl_1.png Bloomberg(Bloomberg) — Chinese institutional investors have swooped on gold in recent weeks, helping to arrest the precious metal’s decline and keep prices above the key threshold of $4,000 an ounce.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountGold-backed exchange-traded funds in China saw 14 straight days of inflows up to Monday, the longest streak since March, according to calculations by Bloomberg. That points to a shift in sentiment in the world’s biggest bullion market after war in the Middle East fueled a long stretch of outflows and price declines.“Interest from institutional investors has increased since gold fell to around the $4,000 level,” said Steve Zhou, an analyst at Huaan Fund Management Co, which operates the country’s biggest gold ETF. A selloff in China’s equities markets has helped boost inflows, he said.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againGold has shed more than a quarter from a record high earlier this year, as the Iran conflict fanned inflation fears and raised rate-hike bets, offering a headwind for non-yielding precious metals. But prices just posted their first monthly gain since February and slipped below $4,000 only a few times during July.In China, recent volatility in stock markets has triggered interest in other assets. Technology stocks have slumped as investors grow wary of relatively high valuations and crowded positioning for companies linked to artificial intelligence. The benchmark CSI 300 Index fell almost 8% in July, snapping three months of gains. “Activity by leveraged funds in the tech sector has added to market volatility, and some funds may instead seek new allocations with a better margin of safety,” Huaan’s Zhou said. “That could bring gold back to institutional radars.”There are also signs of strength in the physical market. Prices on the Shanghai Gold Exchange are at a modest premium to the global benchmark in London, meaning it’s cheaper for banks to procure the metal offshore.“Our stocks have been cleared quite quickly, which is unusual,” said Bernard Sin, regional director for Greater China at trader and refiner MKS PAMP SA. The company has received a lot of enquiries from onshore banks that serve the Shanghai Gold Exchange International Board, a platform where they can import bullion.To be sure, the uptick in demand in China is still modest so far, and may not be enough to drive prices higher, according to Sin from MKS PAMP SA. “We haven’t seen panic buying yet,” he said.China secured its largest amount of US soybeans so far this year, adding to a slew of buying by the Asian nation in recent weeks.Copper is pouring into the US at the fastest rate in at least 12 years as traders position ahead of President Donald Trump’s decision on tariffs on refined imports.Zijin Gold International Co.’s abandonment of a $3.9 billion takeover of Canada’s Allied Gold Corp. is the clearest indication yet that Chinese officials are changing tack on overseas mining investments.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.If the Middle East oil supply shock persists, China will likely continue helping to stabilize the market given that high crude inventories allow it to do so, according to Goldman Sachs Group. No major eventsRatingDog’s China services & composite PMIs for July, 09:45CCTD’s weekly online briefing on coal markets, 15:00No major eventsChina’s July trade balance and 1st batch of trade data, ~11:00 Crude oil, natural gas & coal imports; oil products imports & exportsIron ore, copper & steel imports; steel, aluminum & rare earth exportsSoybean, edible oil, rubber and meat imports; fertilizer exportsChina’s foreign reserves for July, including goldChina’s weekly iron ore port stockpilesSHFE’s weekly commodities inventory, ~15:30Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.