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Gold is trading at USD 1,604.2, EUR 1,227.90, GBP
1,026.40, CHF 1,495.0, JPY 124,984 and AUD 1,606.40 per ounce.
Gold’s London AM fix this morning was USD
1,593.00, GBP 1,028.34, and EUR 1,222.94 per ounce.
Yesterday's AM fix was USD 1,605.00, GBP
1,027.003 and EUR 1,227.91 per ounce.
Cross Currency Table
Gold is mixed and marginally higher in dollars
and euros today despite European finance ministers pledging extra funding to
the IMF. Concerns linger that politicians efforts to
address the euro zone debt crisis are failing.
Last week's price drop has stimulated demand from
Europe and the Middle East and Asia with GoldCore
and other dealers confirming still robust demand and little or no selling of
bullion.
Gold bar premiums in Singapore and Hong Kong rose
from last week, as demand is expected to increase during the upcoming Chinese
New Year holidays and buying interest has returned after last week’s
price drop. Premiums in India have also increased.
Demand from China ahead of the Lunar New Year in
late January should help support prices. While demand may not be on the
massive scale seen last year – demand will likely be very high again
which makes gold well supported at these levels.
Reuters report that Societe
Generale points out in a note this morning that
turnover on the Shanghai Gold Exchange was at record levels yesterday
morning. "After an average daily turnover of 6.5 tonnes
during November, volumes have averaged 11.5 tonnes
daily since the 12 December, when gold had dropped below $1,700,"
Soc Gen said.
Gold Spot $/oz
This means that average daily turnover on the SGE
is up a significant 77% from levels seen in November suggesting that
China’s influence on the gold market may be reasserted in the coming
days.
Goldman Sachs gave a three-month price view on
gold of $1,785 an ounce in a note today, a six-month view of $1,840 and a
12-month view of $1,940.
XAU-EUR Exchange Rate
As long as cheap money and “bail
outs” remain the misguided ‘grand solution’ implemented by
politicians and bankers in Europe and internationally, gold’s bull
market appears very sound.
As each solution fails, a bigger
‘bazooka’ is proposed and now comes the ‘nuclear
bazooka’ of a multi trillion dollar bailout of Europe by the ECB, aided
by the IMF and the Federal Reserve. Who will bail out Japan, the UK and the
US from their coming debt crises?
An unsustainable mountain of debt will not be
solved by creating more debt no matter how complex or what complicated
structure is used.
Debt write downs, bankruptcy and a planned
downsizing of our banking system and the gradual deleveraging of our
financial system remains the real solution to this crisis.
Unfortunately, this remains taboo amongst many
politicians and many of the so called experts that helped create the current
financial and economic crisis.
XAU-GBP Exchange Rate
OTHER NEWS
(Bloomberg) -- Gold Decline a ‘Buying Opportunity,’ Societe Generale Says
The recent
decline in gold is a “buying opportunity,” with lower prices
spurring demand for physical bullion in India and futures trading in China, Societe Generale said in a
report today. In India, “stockists have been
buying again,” the bank said. Turnover on the Shanghai Gold Exchange
has averaged 11.5 metric tons a day since Dec. 12, compared with 6.5 tons a
day in November, a reached a record this morning, Societe
Generale said.
(Bloomberg) -- Silver Puts
Rise to Highest Ever After Dollar Rally: Options
Options traders are paying record prices to protect
against losses in the iShares Silver Trust,
concerned Europe’s debt crisis and the U.S. dollar’s advance will
reduce demand for the metal.
Puts that pay should the biggest U.S.
exchange-traded fund tracking silver futures fall 20 percent in six months
traded 6.82 points higher than calls to buy on Dec. 16, according to data
compiled by Bloomberg. That’s the widest gap ever for the price
relationship known as skew and 19 times the 0.36-point average in the
three-year history of options trading on the ETF, the data show.
Silver has dropped 41 percent since April as concern
over Europe’s debt crisis prompted investors to seek relative safety in
the dollar. After rising to a 31-year high of $49.845 an ounce, futures lost
27 percent in the five-day period that ended May 6, then fell 28 percent in
September for the biggest monthly loss since 1980.
“Silver investors were given a rude
awakening in early May and late September,” Nelson Saiers,
who oversees $639 million at Alphabet Management LLC as chief investment
officer of the New York-based hedge fund, said in a Dec. 16 telephone
interview. “When skew gets to these levels, it points to their fear of
a replay.”
After retreating 24 percent in 2008, silver
surged more than fourfold through April this year as a hedge against the risk
of inflation and the falling dollar, and amid speculation usage will rise
because of industrial demand. The futures have risen in nine out of the last
10 years. The metal is used in everything from jewelry and coins to solar
panels.
(Bloomberg) -- Venezuela
Extends Time Period to Form Gold Mining Joint Ventures
Venezuela will give gold mining companies another 90 continuous days to
negotiate joint ventures with the state, according to a partial reform of the
gold nationalization law, published Dec. 15, and distributed today.
The revised decree extends a previous 90-day
period that expired last week. Rusoro Mining Ltd.,
which operated two gold mines in Venezuela, said in a Dec. 16 statement that
it hasn’t made progress in talks with the government.
(Bloomberg) -- Russia
Boosted Gold Holdings to 28.1 Million Ounces
Russia’s
central bank boosted its gold holdings to 28.1 million troy ounces last
month, from 28 million at the end of October. The stockpile was valued at
$48.2 billion as of Dec. 1, compared with $48.6 billion a month earlier, Bank
Rossii said.
For breaking news and commentary on financial
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SILVER
Silver is trading at $29.21/oz,
€22.34/oz and £18.69/oz
PLATINUM GROUP METALS
Platinum is trading at $1,420.50/oz, palladium at
$613/oz and rhodium at $1,425oz.
NEWS
(Bloomberg)
Gold Gains as Drop Below $1,600 Spurs Purchases,
Offsetting Dollar’s Climb
(Money Control)
Gold futures firm as Europe misses IMF fund target
(Reuters)
Gold tests $1,600 but Europe anxiety weighs
COMMENTARY
(Wall Street Journal)
Gold, Silver Appear Set to Shine in '12
(Zero Hedge)
Thunder Road: "Dear Portfolio Manager, You Are
Heading Into A Full-Spectrum Crisis."
(Bloomberg)
Brother, Can You Spare a $100,000 Bill?
(SilverSeek)
SLV Short Position Update
(Zero Hedge)
Did GLD And Other Gold ETFs Kill Gold Stocks?
(MarketWatch)
Will the Europeans Have To Sell Their Gold?
Mark
O’Byrne
Goldcore
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