Today’s AM fix was USD
1,704.00, EUR 1,316.44, and GBP 1,057.01 per ounce.
Yesterday’s AM fix was USD 1,715.00, EUR 1,317.71, and GBP 1,063.24 per
Silver is trading at $31.76/oz, €24.72/oz and
£19.80/oz. Platinum is trading at $1,552.80/oz,
palladium at $594.20/oz and rhodium at $1,045/oz.
Gold climbed $11.80 or 0.69% in New
York yesterday and closed at $1,712.70. Silver surged to a high of $32.232
and finished with a gain of 1.36%.
Gold in USD (2 Year) With Support At 100 and 200 Day Moving Averages -
Gold edged down early Friday, on
track for its third week of declines as the US dollar strengthened and
momentum traders continued to exit positions or go short.
Investors and dealers await the US
CFTC commitment of traders figures due at 1930 GMT, after last week's data
showed hedge funds and other big speculators decreased their long positions
in gold to their lowest since the end of August. This is bullish from a
contrarian perspective and shows that much of the short term speculative
froth has been removed from the market.
Gold in USD, 5 Day – (Bloomberg)
The US GDP figures are released
later today and they are expected at 1.9%. A weaker than expected number
would benefit safe haven gold.
Gold corrected in October as we anticipated and has fallen by 5.5% (in USD
terms) from over $1,795.55/oz to a low of $1,699.65/oz It is too early to tell yet if the October correction
is over. There would appear to be strong support at $1,700/oz and Asian physical demand is very robust down at these
The physical bullion market was
subdued in Asia overnight although there was some buying out of Japan. Trade
was muted because of a public holiday in Indonesia, Malaysia and Singapore,
but Reuters noted that dealers saw gold buying from Thailand.
Importantly, Chinese buying of
gold, official and public, on dips is likely to be continuing.
Physical demand for gold bullion coins and bars in western
markets remains subdued but smart money buyers continue to add to
allocations. Gold and silver 1oz bullion coins from the Australian Lunar
– 2013 Year of the Snake Coin Series are officially sold out at The
Perth Mint. The sell out of the full mintages of
300,000 pure silver 1oz coins and 30,000 pure gold 1oz coins was achieved in
just two months, ranking this release as one of the fastest selling behind
the phenomenally successful Year of Dragon coins in 2012.
With gold having pierced slightly
below $1,700/oz there is a risk that gold could
fall to test the 200 and 100 day moving averages which are now at $1,663.30/oz and $1,664/oz respectively
(see chart above).
Cross Currency Table – (Bloomberg)
A rise of over 1% today (from the
current price of $1,705/oz) would result in a
higher close this week, above $1,721.75/oz. This would be a good indicator
that the recent dip is over and it is time to get into position for November,
which is one of gold’s strongest months and the November to March rally
which is one of gold's strongest periods. A lower close this week could see
further falls next week and in early November.
As ever it will be nigh impossible
to pinpoint the exact price lows.
The low of $1,699.65/oz seen two days ago on Wednesday may mark the
intermediate low however gold could continue falling until October 31st (next
Wednesday) as month ends often mark intermediate lows or could even continue
falling until the US election or soon after.
There are now 6 trading days left
until the US Presidential election on November 6th. The US election has many
investors on the sidelines.
Gold will be supported by and
likely see gains into yearend due to the coming uncertainty surrounding the
US “fiscal cliff.” Tax increases and spending cuts are expected
which would sink the US economy into a deep recession or Depression. If US
Congress cannot agree on a deal by the end of the year it could have
deleterious effects on the dollar and on capital markets.
The US elections themselves are
unlikely to have a significant impact on currencies and wider markets in the
short term but we expect the recent calm may recede and the stormy volatility
of recent years may again be seen soon after the election when the reality of
the appalling US fiscal and monetary situation is realised.
November is traditionally one of
gold's strongest months (see gold seasonal charts).
Given the extremely bullish
fundamentals due to negative fiscal outlooks, ultra loose monetary policies,
negative real interest rates and global currency debasement, we expect this
November and year end to be very positive for gold and particularly still
Prudent buyers should now be buying
this dip by cost averaging or getting into a position to do so. While gold
may correct by another 2% or 3% from here, there is a greater likelihood of
gold beginning to rise sharply and quickly recovering the 5.5% loss seen this
month in November.
For breaking news and commentary on
financial markets and gold, follow us on Twitter.
(Bloomberg) -- Eclectica’s Hendry Says
Owning Gold Stocks Almost ‘Insanity’
Hugh Hendry, founder of London-based hedge fund Eclectica
Asset Management LLP, said buying shares of gold-mining companies is
“as close as you get to insanity.”
Hendry said he owns gold and also
has a short position on gold-mining stocks, meaning that he’s sold
shares he’s borrowed with the expectation of buying them back at a
lower price. Mining stocks are likely to fall because the companies are at
greater risk as the price of gold rises, he said.
“More precarious societies
across the world are more envious of your gold assets at $3,000 than at
$300” an ounce, Hendry said today at the Economist magazine’s
annual Buttonwood Gathering in New York. “There is no valuation
argument that protects you against the risk of confiscation.”
The NYSE Arca
Gold Bugs Index has risen about 0.6 percent this year, including reinvested
dividends, while bullion climbed 9.2 percent.
“There is no rationale for
owning a gold-mining equity,” Hendry said. “Think about it, if
you were bullish on gold why didn’t you just buy a gold ETF, gold
futures or gold bullion?”
Hendry started Eclectica
in 2005 and the firm has $1.1 billion under management, according to its
LBMA Says Gold Trading Surged 26% in September as Silver Rose
Gold trading jumped 26 percent to an average of 22.4 million ounces a day in
September compared with a month earlier, the London Bullion Market
Association said today in an e-mailed report.
That was the highest average since
August 2011, the LBMA said. Silver trading rose 4 percent to a daily average
of 124.3 million ounces, the LBMA said.
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"Time to get into position for November" ...
"One of gold’s strongest months" - MarketWatch
Gold Traders More Bullish as ETP Hoard Sets Record
Gold above $1,700; heads for third week of decline
Bundesbank Says NY Fed to Help Meet Gold Audit Request
Brazil’s Gold Reserves Rise For First Time Since
2008 - Bloomberg
"A Large Allocation To Gold Still Seems Like A Very
Good Idea" – Zero Hedge
The Entire German Gold Hoard Is Gone
– King World News
Gold and Silver are the Strategic High Ground in the
Currency War – Jesse's Café Américain
Keiser, Stacy and Frisby on
German Gold Reserve Audit Controversy – RT