Gold continued to ease trading at 1317.50 as traders booked profits after gold reversed course late Wednesday after disappointing US data including GDP and CORE durable goods. As gold climbed to touch 1326 on Wednesday traders began to book profits. This morning gold edged down $5.10. Silver took cues from gold and gave up 183 points to trade below the 21 level. Silver prices rose by 0.5 percent on Wednesday in line with strength in bullion prices. Slow growth in the US has raised speculators interest in this metal acting as a positive factor. Also weakness in the dollar index led to gains. The US dollar tumbled from 80.39 to 80.23 this morning. Data showed gross domestic product fell at a 2.9 percent annual rate, the sharpest decline in five years, instead of the 1.0 percent pace it had reported last month.
China and Singapore are vying to provide feasible gold price benchmarks in Asia, as calls grow in the top consuming region for more localized pricing of the precious metal at a time when the global benchmark is under regulatory scrutiny.
Platinum gave up $6.30 to trade 1469.85. Platinum group metals were steady after tens of thousands of South African platinum miners returned to work on Wednesday after wage deals ended the longest and most damaging strike in the country’s history.
China’s chief auditor discovered 94.4 billion yuan ($15.2 billion) of loans backed by falsified gold transactions, adding to signs of possible fraud in commodities financing deals. Twenty-five bullion processors made a combined profit of more than 900 million yuan by using the loans to take advantage of the difference between onshore and offshore interest rates, and the appreciation of Chinese currency, according a report on the National Audit Office’s website. China is the biggest producer and consumer of gold.
Public security authorities are also probing alleged fraud at Qindgao Port where the same stockpiles of copper and aluminum may have been pledged multiple times as collateral for loans. As much as 1,000 tons of gold may be tied up in financing deals in China, in which commodities including metals and agricultural products are used to get credit amid restrictions on lending, according World Gold Council estimates through 2013.
Copper continued to rise to trade at 3.17 overlooking the scandal at the ports. The red metal advanced for a ninth straight session in New York, capping the longest rally since 2005, amid signs of tightening supply. Inventories monitored by exchanges in London, Shanghai and New York fell for the 10th trading day in a row, and are at the lowest since October 2008. Global inventories at warehouses tracked by the three main exchanges have declined 51 percent this year. Stockpiles monitored by the LME fell 0.6% today, extending a slump to the lowest since August 2008.