China Buys Record Amount Of Gold

Gold has managed to hold its ground above $1,670 today thanks to further concern over the euro-zone crisis. However it still lacks the catalyst to drive it from its narrow trading range. Investors are looking toward the ECB meeting on Thursday as well as Chinese data on Friday.

The gold price dropped slightly today as U.S. home prices appeared to climb 0.4% in December, posting over an 8% increase for the year, prompting U.S .equities to rally.

Platinum And Palladium
On Monday we ended our market update mentioning the multi-month highs both platinum and palladium had reached. However, it’s now a different tale as today has been a bit of a rough ride for the industrial precious metals, both of which suffered as a result of traders booking profits from the previous sessions’ rally.

Platinum fell from its four-week high on concern over the euro-zone crisis, however that was short lived as it returned to a 17-week high as platinum sees its supplies fall to a 13-year low thanks to mines in South Africa closing. Supply is set to fall by 2.7%, yet carmakers are expected to increase production by 0.5%.

Despite palladium's drop earlier today, it is expected to remain in a ‘sizeable supply deficit’, as Russia reduces its stockpile releases of the precious metal.

Argentine Hyperinflation
Meanwhile in Argentina, President Cristina Fernández de Kirchner has artificially frozen supermarket prices for the next two months, prompting a scramble to buy food before prices are unchecked. The move comes following a descent into hyperinflation.

China is making headlines this morning after Bloomberg reported that 2012 saw a 47% increase in the netflow of gold from Hong Kong. Gold imports from Singapore increased by 96%. Considering how difficult (and lengthy) Germany is finding it to repatriate 300 tons of gold, the Chinese must be a little confused as they have managed to import over 832 tons in the last year.

China's Income Growth
In December alone, the Chinese imported an all-time record of 114 tons, more than several central banks, including Greece's. Analysts attribute the rise in Chinese gold demand to last year's income growth.

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