- The weekly average ask (sell) premiums for freshly minted gold kilobars declined in Hong Kong, and Bangkok, but rose in Singapore despite rising gold prices
- The Shanghai gold premium decreased to US$0.93/oz on Thursday; SHAUPM records a fresh all-time high of CNY634.72 on Thursday
- The PBoC will pause its treasury bond purchases as part of efforts to maintain “relative stability” in the yuan
- The Thai government will distribute 10,000 baht to eligible elderly citizens by January 29 under the second phase of its economic stimulus program
- Gold rose to a one-month high at ~$2,679/oz at writing, with uncertainties from President-elect Trump's tariffs plans driving a haven bid in the yellow metal
- For the week ending January 10, 2025, physical gold kilobar ask (sell) premiums averaged at US$1.73/oz, US$1.38/oz and US$1.54/oz for Singapore, Hong Kong and Bangkok respectively*
- In Hong Kong and Bangkok, weekly average ask premiums fell by $0.22/oz (-13.8%) and $0.03/oz (-1.9%), while Singapore recorded a $0.12/oz (7.6%) increase. The decline in premiums for the former point to a fall in gold demand as buyers likely withheld their gold purchases amid rising domestic gold prices.
- The Thai government will distribute 10,000 baht via digital wallets in March as part of the third phase of its 2024 economic stimulus program. Meanwhile, the second phase will provide 10,000 baht to eligible elderly citizens by January 29, ahead of the Chinese New Year holiday, potentially boosting gold purchases during this period.
- Discounts on gold kilobars in Ahmedabad, India, to international gold prices increased sharply from -INR 401.92/10g (-US$14.57/oz) at the start of the week to close Thursday lower at -INR 718.21/10g (-US$26.01/oz), pointing to weak local gold demand amid the ongoing inauspicious period for gold purchases (Mid-Dec to Mid-Jan), as per the Hindu calendar. Softness in gold demand was in part due to rising domestic gold prices, with the landed cost of gold in India reaching a one-month high of INR 78073.21/10g (US$ 2827.59/oz) on Thursday.?
- Meanwhile, premium on Istanbul gold decreased from US$10.68/oz on Monday to US$5.61/oz on Thursday. ?As of January 9, gold prices in Istanbul stood at US$2,671.96/oz amid further softness in the lira, with USD/TRY rising to ~34.40 at writing. ?
- Premiums on Shanghai gold decreased from US$10.33/oz at the start of the week to close Thursday lower at US$0.93/oz, pointing to a sharp decline in local gold demand as domestic gold prices rose to record-high levels.
- The Shanghai Gold Benchmark PM (SHAUPM) rose from CNY 624.10/g on Monday to close the week at a record-high of CNY 634.72/g on Friday, tracking the rise in international gold prices.
- USD/CNY deals at ~7.3326 at writing, operating just below upper bound of its daily range (~7.3328). Despite gains in the dollar, the pair has remained fairly rangebound this week, underscoring the PBoC’s efforts to maintain “relative stability” via daily fixes below 7.19.?
- These efforts were bolstered on Friday (January 10) by the PBoC’s announcement of a temporarily pause in treasury bonds purchases, citing a shortage of bond supply. As a result, Chinese government bond (CGB) yields rose across the curve, narrowing the spread between US Treasury yields and CGB yields and providing some support for the yuan. ?
- Separately, China's NDRC announced an increase in subsidies for the trade-in program for consumer goods on Wednesday, raising them from 15% to 20% of the item's price. While this, along with an expansion of the program's scope, aims to bolster domestic consumption, the increase in subsidies may not be substantial enough to address the nation's deflationary challenges.
- Gold is ~$9 firmer to operate near one-month high at ~$2,679/oz at writing, extending the precious metal’s three-day streak of higher daily close, on track for a higher weekly close. The move higher in gold had come alongside gains in the dollar, with uncertainties surrounding incoming US President Trump’s tariff plans driving an increase in haven demand.?
- To summarise this week’s Trump-related developments, on Monday, a Washington Post report on Monday suggested that Trump was considering a narrower set of tariffs upon taking office, a claim he later denied. On Wednesday, CNN reported that Trump is exploring the option of declaring a national economic emergency to implement a new tariff program, potentially invoking the International Economic Emergency Powers Act (IEEPA).
- Turning to Fed rate cuts, recent Fedspeak continued to emphasized the need for a cautious approach to the pace of easing in this cycle, with Fed Gov Bowman (permanent voter) and KC Fed Pres Schmid (’25 voter) expressing support for a “cautious” and “gradual” monetary policy approach.?
- Looking ahead, the release of US Nonfarm Payrolls for December will headline matters today, with a significant reduction expected in the pace of hiring (BBG median +165k jobs; Noc +227k) although the forecasted figure still represents a solid pace of growth in the labour market, reinforcing expectations for a pause in rate cuts at the January FOMC.
* KIS gold ask (sell) premiums reflect the average ask premiums over spot reported by market participants for each location.
To receive daily updates on gold price premiums for key Asian markets and view bid and ask premiums for each location, subscribe to the KIS Gold Service at?www.kallindex.com
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