Gold’s London AM fix this morning was USD
1,659.00, GBP 1,064.08, and EUR 1,277.04 per ounce.
Yesterday's AM fix was USD 1,669.00, GBP 1,072.69, and
EUR 1,282.17 per ounce.
Gold edged up after an early dip on buying from jewellers in Asia this morning. Prices are trading
narrowly as investors await the outcome of the US Federal Reserve meeting with
its decision on interest rates at 17:30 GMT.
Expectations are that chairman, Ben Bernanke, will
point to interest rates sticking near zero into 2014 according to a Reuters poll. Any hints of interest rates
remaining low for a longer period will continue to put pressure on the dollar
and will boost gold's safe haven appeal. This will also allow investors
to take higher profits by purchasing gold in other currencies.
Gold increased $2.29/oz to
$1,667.89/oz by 0637 GMT. Gold touched a six
week high of $1,681.16 on Monday.
Yesterday in its World Economic Outlook update, the IMF
cut its projection for global growth in 2012 to 3.3%, down 70bp from its
forecast in September. The global economic body blamed this largely on a
"mild recession" expected this year after the eurozone
entered a "perilous new phase" toward the end of 2011.
The IMF now believes the eurozone
to contract by 0.5% in 2012, a 1.6% point cut from the initial September
forecast, before returning to sluggish growth of 0.8% in 2013.
Economists said the IMF was "playing
catch-up" with a loud chorus of negative forecasts that have grown along
with the European sovereign debt crisis. Christine Lagarde
commented, "Financial conditions have deteriorated, growth prospects
have dimmed, and downside risks have escalated."
"The longer we wait, the worse it will get. The
only solution is to move forward together. Our collective economic future
depends on it," said Ms. Lagarde during her
speech in Berlin Tuesday.
From the IMF’s poor projections we move forward
to the optimism that begins today at the World Economic Forum in Davos,
Switzerland. In this beautiful alpine resort
politicians, Fortune 500 CEO’s, academics, authors and
celebrities will socialize and exchange ideas. Sadly with such a vast group
of attendees Davos has rarely been a place for political breakthroughs,
economic solutions, or major business deals.
It appears that there is no quick fix to the macro
economic problems and gold will still shine in 2012.
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Gold edges up before Fed decision as jewellers buy
(AL Arabiya News)
Dateline Davos: Lots of gloom, but is there room for
While the West argues over bonds, China is buying
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