Chinese Gold demand remains decent

CHINA September 21 2016 10:39 AM

SHANGHAI (Scrap Register): MKS (Switzerland) S.A. said gold may be stuck in a holding pattern ahead of key central-bank meetings Wednesday, but nevertheless Chinese demand remains good in the meantime. 

Alex Thorndike, senior precious-metal trader, said overnight Asia-Pacific trading was sleepy ahead of upcoming Federal Reserve and Bank of Japan policy meetings. They cite decent demand upon the open in China, with the Shanghai Gold Exchange premium still sitting at a very healthy +$5.00 over the loco London price. 

With USDCNY and USDCNH still under pressure from tightness in the forward market, demand for the metals was still strong, which continued to keep the spot price on an upward trajectory throughout the morning.

Otherwise, MKS said, “We suspect that the wait-and-hold pattern of the last few days will continue over into tomorrow's BOJ and do not expect too much in terms of price action for gold today.”