Daily Market Update 02/17/12

GOLD

The trading range on Gold has been very narrow in the past few weeks, which is expected has it builds a firm base for the next leg up.  In the past 24 hours gold’s low/high has been $1,716/$1,736 on normal volume as the world’s financial markets await positive news from the Eurozone.  At 11am PST, Gold is down $2.30 per ounce, at $1,724.60 in light trading.

News from China on Gold

Chinese Central bank gold buying soared to 227 tonnes in the last three months of 2011, according to data published by Hong Kong. Mine production in China, the largest gold producer, stood at about 100 tonnes in the quarter, implying total supply of at least 330 tonnes. In 2009, Beijing revealed it had almost doubled its gold reserves since 2003, making it the fifth-largest holder of bullion with 1,054 tonnes. Estimates of the year ending 2011, Chinese Central bank gold holdings range from 1,600 to 2,000 tonnes. 

China cut its holdings of United States Treasury securities by $3.19 billion in December, and $59.4 billion (5%) for the year. China held $1.16 trillion in U.S. Securities in December 2012, and is now at a 19-month-low of $1.10 trillion. The reduction came as the country continues to diversify its foreign-exchange reserves and indicates a growing interest in moving into gold and euro assets. China was the only country among the top five foreign creditors to make an overall reduction in holdings during 2011.

SILVER

Silver continues to hold its $33/$34 trading range, actually hitting $32.97 for a short time early this morning in Asia.  At 11am PDT, Silver is trading at $33.33, down $0.15 on light pre-weekend activity.