The gold bulls are hearing echos of copper today.
The World Gold Council reported today that was being used “to raise low-cost funds for business investment and speculation”, and was part of the wider growth in shadow banking in China.
Up to 1000 tonnes of gold have been used as collateral in financing deals. Similar stockpiling (and a later government crackdown) in copper helped knock the industrial metal to a 3 year low in March.
The WGC also forecast slow demand from China for gold this year. Gold prices have rebounded to $1298 from a low of $1282 but remain down $30 on the day.
