Today’s AM fix was USD 1,237.50, EUR 913.08 and GBP 754.30 per ounce.
Friday’s AM fix was USD 1,245.25, EUR 915.29 and GBP 763.07 per ounce.
Gold climbed $13.60 or 1.07% Friday, closing at $1,251.20/oz. Silver rose $0.31 or 1.58% closing at $19.99/oz. Gold and silver were both up for the week at 0.64% and 0.60%, respectively. Platinum edged up $4.85, or 0.4%, to $1,360.25/oz and palladium fell $0.60, or 0.1%, to $715.60/oz.
Gold is lower today for the first time in three days as continuing speculation regarding possible ‘tapering’ by the Fed contributes to poor sentiment. The Bank of England and ECB meet this week and market participants await central bank policy decisions and will look for guidance regarding the continuation of ultra loose monetary policies.
GoldCore YouTube Channel
As ever, it is important to watch what the Fed and central banks do rather than what they say.
U.S. data including nonfarm payrolls, third quarter GDP and manufacturing PMI will be released this week, giving more insight into the fragility of the U.S. economy. The nonfarm payroll report on Friday is awaited and a poor number should see another spike in gold.
Gold was 0.64% higher last week which was important from a technical perspective and after the very poor November. Seasonally, November is one of gold’s best months but gold ended November trading on Friday down 5.4%, its biggest monthly loss since June.
Gold will likely be supported by increased physical demand which has picked up at these lower price levels. Demand could pick up sharply again if prices fall below $1,240.
Tradition Of Respecting Private Property Makes
Allocated Gold In Switzerland Popular
Dukas Copy TV interviewed Research Director, Mark O’Byrne, over the weekend and discussed gold’s recent poor performance, the paradigm shift that is the “enormous” Chinese gold story and Switzerland’s increasing importance in the global gold market.
The key points from the interview were the following:
→ The U.S. economy is weaker than is believed and the recent positive jobs number in itself does not indicate an economic recovery.
→ Warning that anything can happen in the short term and prices can be volatile. That is one of the reasons why people should consider dollar cost averaging and gradually accumulating a position.
→ Gravity of situation not understood by people. Fact that the U.S. has to print $85 billion every month to buy its own mortgage and government debt is astounding.
Gold in U.S. Dollars, 10 Days - (Bloomberg)
→ Inflation has not happened yet but it will and those who own gold as hedge against inflation will again be rewarded in the medium to long term.
→ The China gold story is enormous. There is a paradigm shift with China’s per capita consumption of 1.3 billion people increasing from near zero in 2003. This is because from 1950-2003 gold ownership was banned in China under Chairman Mao. It has been increasing every year since 2003.
→ At present, China is producing and importing nearly half of global gold annual production almost 1,000 tons. This is just the gold that is imported through Hong Kong. There is also a huge amount of gold imported into other Chinese cities.
→ While 1,000 tonnes is a lot in terms of tonnage, in dollar terms it is very small and at today’s price it is worth just under $40 billion. This is roughly what the Federal Reserve prints in just two weeks - every two weeks!
→ Institutional physical gold is flowing into Switzerland from London. Large London Good Delivery bars (400 oz) are being melted down in refineries in Switzerland and made into smaller formats, such as kilo bars, for shipment to Asia.
Gold in U.S. Dollars, 5 Years- (Bloomberg)
→ Switzerland and Germany have the highest per capita consumption of gold in Europe due to their understanding of the risks inherent in paper currencies and gold’s value as a store of wealth.
→ People internationally are opting to store gold in allocated accounts in Switzerland due to their tradition of respecting private property and the fact that their economy is very sound. Therefore it is a good place to diversify assets in order to protect wealth.
→ GoldCore remain negative on gold in the short term due to the poor technicals and momentum. However, the medium and long term outlook is positive and we believe gold can surpass its inflation adjusted price from the 1980s of $2,400/oz in the coming years.
The ‘GoldCore on Gold’ video can be watched here.
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