Gold Rallies as China and India Prices Signal Stronger Demand

GOLD JUMPED and silver leapt Tuesday afternoon in London, rallying as bullion prices in top consumer nations China and India signalled stronger demand while the crash in Asian AI stocks continued but US tech shares rallied.

Priced in Yuan, gold in Shanghai fell to a new 10-week low beneath ¥890 per gram. But in Dollar equivalent terms it rose further over London quotes as the Chinese currency set a fresh 4-year high in USD, offering new bullion imports 3 times the typical incentive at $22 per troy ounce.

With the key Hindu festival of Diwali now less than 2 weeks away as the wedding season returns, No.2 gold consumer nation India has also seen domestic demand push prices higher relative to global quotes, with dealers charging around $5.50 per ounce above official import costs so far this month according to data compiled by the mining industry's World Gold Council.

Last Diwali, India's investment gold demand grew to plug some of the drop in jewellery purchases, a pattern now starker still in No.1 consumer China as well.

Gold in London today reversed a $35 per ounce drop after new US data said pending home sales sank in September, down 11.3% from 12 months earlier with the steepest plunge in more than 3 years.

The average cost of new 30-year fixed rate mortgages rose to 7.40% per annum last week according to data from home-loan agency Freddie Mac, the highest since late 2023's two-decade peak.

Long-term borrowing costs for Western governments fell in the bond market Tuesday, pulling 10-year US Treasury yields back to 5.10% per annum as France's borrowing costs dropped through 4.90% after the weekend's cost-of-living protests and riots were followed last night by the imposition of a curfew in major towns and cities.

Shares in US AI 'neocloud' leader CoreWeave (Nasdaq: CRWV) meantime bounced hard, cutting its 6-month plunge to 46.4% despite South Korean peer Elice Group sinking by 1/3rd on its stock-market debut in Seoul.

Autocat and tech metal platinum leapt to a 1-week high above $1660 per troy ounce, and silver prices also outpaced the reversal in gold, shooting 2.8% higher inside 2 hours to near a 1-week high before dropping back to trade around $57.90 per troy ounce.

The number of shares in gold ETF trust funds worldwide expanded last week by 0.3%, separate data from the WGC says, needing a fresh record 4,278 tonnes of bullion backing.

Expanding by 5.8% over the past 3 months, gold ETFs worldwide have seen Asia-listed funds account for nearly 1/5th of that growth, taking the region back towards May's record 12.9% share of the outstanding total and keeping North America below 50% of global gold ETF value.

A "nudge" from India's financial regulator SEBI last week led several leading mutual funds to suspend any large new inflows to the country's gold ETFs, Reuters reports, with Kotak Mahindra, UTI Mutual and HDFC Mutual Fund seen acting to help curb bullion imports as Diwali boosts household investment demand.