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Gold has fallen today in all major
currencies except the Swiss franc which has fallen on SNB intervention rumours. Gold is trading at USD 1,791.40, EUR 1,257.10,
GBP 1,107.70, CHF 1,318.80 per ounce and 136,976.00
JPY/oz. The yen has fallen by 8.7% against gold so far in August as the
yen, while rising in dollar terms, is falling sharply in gold terms (see
chart below).
Gold reached new record nominal
highs at $1,814.95/oz and new nominal highs in
euros and sterling yesterday. Gold’s London AM fix this morning was USD
1,786.00/oz, EUR 1241.75/oz,
GBP 1105.75/oz.
Cross Currency Rates
The CME announced margin
requirements on gold will rise by over 22% by close of business today. This
saw an initial slight sell off prior to further gains.
A rise in CME margin requirements
may lead to speculative long elements getting squeezed and to short term
weakness in gold. However, the scale of physical demand internationally is
such that any sell off will likely be brief and reasonably shallow.
Gold remains in a strong upward
trending channel and until we see a breach of this to the downside, it should
continue to move higher. Any pullback will again be used by astute buyers to
accumulate bullion on the dip.
There continue to be many important
breaking news stories regarding the global debt crisis and pertaining to gold
– indeed it is often difficult to keep up with developments.
One such development is
today’s edition of Germany’s best selling
newspaper Bild which encourages German people to
buy gold due to the risks posed to the euro and to cash (see Bild article in Commentary).
Bild Zeitung, is Germany’s biggest- selling
newspaper, is the best-selling newspaper outside Japan and has the
sixth-largest circulation worldwide.
Bild encouraged
German people to invest in gold as the global debt crisis continues to
deteriorate and cause turmoil in global markets.
“While the companies listed
on stock exchanges have lost over the past 14 days, about $8 trillion dollars
in value, the price of gold climbed to a record high.”
“While money can be printed,
gold reserves are limited. To date some 150,000 tonnes
of gold have been mined.”
Gold “is better than
cash,” the newspaper said. “While any amount of money can be
printed, gold is limited,” making it “one of the safest
investments in crisis times.”
The article is interesting as gold
has remained taboo is much of the non specialist
European press and media and was only briefly covered in recent days due to
the deepening crisis and succession of new record nominal highs.
German demand for gold has been very
robust in recent years and the Germans experience of the Weimar
hyperinflation means that they are very aware of the risks posed by
today’s excessive money printing and global currency debasement.
Gold in Swiss Francs – 5 Year (Daily)
Gold’s bull market continues
in all major currencies but its recent strength has been more pronounced in
dollars, euros and pounds.
In Swiss francs, gold has seen
massive consolidation for the last 12 months and looks like it could be on
the verge of breaking out and moving sharply higher.
The Swiss central bank will not and
cannot allow the franc to continue to appreciate on world markets. The Swiss
franc is being debased, albeit on a somewhat lesser scale than the U.S.
dollar and some other currencies as Swiss money supply continues to grow
rapidly and interest rates are now near zero.
Gold in Japanese Yen – 1971 – Today (Weekly)
Meanwhile, gold in yen has broken
out to new 28 year nominal highs over 137,000 yen per ounce and looks set to
target the record nominal high of 1980 of 200,000 yen per ounce.
Gold’s rise in yen (see chart
above) has been gradual in recent years due to the yen’s relative
strength versus other fiat currencies.
Yen gold is likely to rise above
its nominal high of 200,000 yen seen over 31 years ago on January 18th, 1980.
In the longer term, the inflation adjusted high of over ¥500,000/oz is quite possible given Japan’s dreadful
economic, fiscal and monetary position.
No fiat currency will be a
“safe haven” in the coming months and years.
From the GoldCore
Trading Desk: There is extremely strong demand for gold bullion in all
formats at the moment. Although clients are expressing a preference for
taking delivery of 1 ounce bars and coins, for allocated storage in Perth
Mint and for allocated storage in Zurich. The level of demand is on a par
with that seen at the height of the Lehman crisis. However, much of the
demand is from existing clients (particularly high net worth) who are
increasing allocations. Retail participation has increased and is increasing
but remains low. There is tightness in sections of the pre-1933 semi
numismatic gold market with French Rooster gold coins becoming difficult to
source in volume. Silver demand is robust but there has been no significant
increase this week or in recent weeks. Similarly to gold, smart money
continues to add to allocations. There continues to be signs of a degree of
tightness in the market which suggests that silver may soon bottom and resume
its bull market targeting $50/z again.
For the latest news and commentary
on gold and financial markets follow us on Twitter.
SILVER
Silver is trading at $39.16/oz,
€27.58/oz and £24.22/oz.
PLATINUM GROUP
METALS
Platinum is trading at $1,779.20/oz, palladium
at $733/oz and rhodium at $1,750/oz.
NEWS
(Bloomberg)
Gold Exceeds $1,800 as Investors Seek the ‘Ultimate
Collateral’
(Reuters
Africa)
Gold climbs to record top on euro crisis, Brent recovers
(Reuters)
Gold dips but stays above $1,800 after CME margin hike
(Bloomberg)
Gold Declines From Its All-Time High as CME Raises
Futures Contract Margin
(Bloomberg)
PBOC Adviser Says China Needs Urgent Review of U.S.
Holdings, News Reports
(Bild)
Bold: Today, there is gold in PICTURE!
COMMENTARY
(Philly)
Your Money: Going for the gold to improve portfolios
(GoldSeek)
Inflation & Deflation in a Storm
(Irish Times)
Forget gold, sink your savings into a metal so toxic it
can't be touched
(ZeroHedge)
CME Hikes Gold Margins By 22% And Gold Drops by....0.4%,
Resumes Climb
(Finance and
Economics)
Alasdair Macleod: Beyond the tipping point
(Howestreet)
With Gold At New Highs It’s Time To Stock Up On
Silver
Mark O’Byrne
Goldcore
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