Gold is trading at USD 1,770.10, EUR 1,299.50, GBP
1,110.30, CHF 1,599.20, JPY 137,360 and CNY 11,200 per ounce.
Gold’s London AM fix this morning was USD
1,766.00, GBP 1,109.09, and EUR 1,299.01 per ounce.
Yesterday's AM fix was USD 1,780.00, GBP 1,112.50, and
EUR 1,300.41 per ounce.
Cross Currency Rates
Gold is 0.3% lower in US dollars and 0.5% lower in
euros. Gold again experienced weakness due to volatility and weakness in
global stock markets. However, this weakness is likely to be temporary again
and growing fears over the stability of Italy and the euro zone will support
safe haven gold.
Sharp falls in equities and commodities may have again
forced some investors to sell profitable gold positions to cover losses
elsewhere particularly in stocks which fell sharply in the US and Asia but
have stabilized in Europe.
Gold fell 0.8% in dollar terms yesterday but was higher
in most currencies especially the euro.
The escalating crisis has prompted EC President Jose
Manuel Barroso to issue a stern warning of the
dangers of splitting the zone. EU sources told Reuters that French and German
officials had held discussions on just such a move.
Merkel has called for changes in EU treaties and French
President Nicolas Sarkozy advocated a two-speed Europe in which euro zone
countries accelerate and deepen integration while an expanding group outside
the currency bloc stays more loosely connected -- a signal that some members
may have to quit the euro.
The failure of the Eurozone and the European monetary
union looks increasingly likely. This has incredible political, economic and
monetary implications for the world and could lead to shockwaves akin to or
surpassing that seen after the collapse of the Soviet Union.
Given the scale of the crisis, we continue to amazed at the lack of animal spirits in the gold
market – both from media coverage and from public participation.
The majority have no idea of the ramifications of these
momentous geopolitical developments. The public knows the developments are
negative but most are resigned to their fate and many are like deer in the
headlights failing to join the dots and realize the ramifications for their
investments, savings and financial wellbeing.
While demand in Asia has fallen from the very strong
levels seen recently - demand continues and Chinese New Year should see
Chinese demand pick up again in the coming weeks.
Western investment demand continues as seen in increasing
allocations to the SPDR trust.
Holdings of the SPDR Gold Trust added 3.025 tonnes from a day earlier to 1,267.153 tonnes by November 9, the highest since late August. The
ETF saw an inflow of nearly 24 tonnes so far this
month, after an 11.6-tonne gain in October and a fall of more than 30 tonnes in the previous two months, showing reviving
interest in gold from investors.
As we have said for some time ETF buyers are primarily
long term diversifiers in nature and not speculative ‘hot’ money
likely to flee the gold market on signs of weakness. Much of the ETF buying
is from institutions including pension funds who are
diversifying their portfolios with very small allocations to the gold trust.
Bullion dealers in western markets continue to see
demand but demand is nowhere near the levels seen at the height of the Lehman
crisis or even towards the end of gold’s sharp rise to over $1,900/oz in August.
The public is nowhere near the gold market and the majority
of people in the western world could not tell you the price of gold today
– let alone how to buy it. The mainstream, non
financial specialist, media continues to cover gold sporadically at
Price falls tend to be headline news rather than price
Much of the buying we are seeing is from existing
precious metal buyers choosing to sell existing precious metal type
investments such as ETFs and digital gold in order to own physical
Given the significant counter party risk seen in the world,
as graphically illustrated by MF Global, more buyers are choosing to take
delivery or opting for personal allocated accounts with legal title to the
bullion which is in their name
This position is understandable given massive counter
party risk due to the risk of corporate, banking and national
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Silver is trading at $33.91/oz,
€24.91/oz and £21.25/oz
PLATINUM GROUP METALS
Platinum is trading at $1,623.20/oz, palladium at
$643.50/oz and rhodium at $1,525/oz.
U.S. gold falls 2 percent as Italy fear spooks
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Italy at breaking point; fears grow of euro zone split
Exclusive: French, Germans explore idea of core euro
Game Over? Reuters Says Germany, France Exploring
Idea Of Core Euro Zone, End Of Existing Structure
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(Christian Science Monitor)
Printing Money Won't Solve a Global Depression
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Nigel Farage - Where is
Times Deutschland joins hunt for Germany's gold