Interesting POG move $15 upwards after the chinese inflation data came in above expectations. China influencing POG is good sign for physical demand, where US is more ETF ("paper gold").
Major china factors in play 1. Culturally accept gold as wealth 2. High inflation rate reduces appeal of bond/bank deposits. If money isn't making more of itself faster than inflation it is lost. 3. Property price crackdown, speculative loan/government loan problems 4. Slowdown of industrial demand, overcapacity 5. Crackdown on shadow banking and "wealth products" 6. Stock market slump and not forecast to go higher in the short term
Seems like alot of money in china with few investment outlets, unfortunately that includes no access to US gold ETFs. So Chinese gold demand is usually in physical, this will be a gradual process as the physicals need to make their way to the Chinese market. It is good to see this taking off with April/May and June??? Hong kong gold export to China increasing significantly.
Not sure of short term prospects for NCM, mid/long term POG is assured by countries like China/India to stay well above cash costs.
Technical wise POG still stuck in down trend with major ETF selling pressure. Hopefully it gets stuck between 1200-1300 on "production cost" support.
NCM Price at posting:
$9.73 Sentiment: None Disclosure: Held
