Today’s AM fix was USD 1,300.00, EUR 964.68 and GBP 763.76 per
ounce.
Yesterday’s AM fix was USD 1,307.50, EUR 971.04 and GBP 767.54
per ounce.
Gold fell $1.60 or 0.12% yesterday to $1,304.90/oz and silver slipped
$0.02 or 0.1% to $20.92/oz.
Gold has eked out small gains in London this morning after gold
in Singapore fell nearly $10 overnight. Futures trading volume on the
move down were very low and 37% below the average for the past 100 days for
this time of day, according to Bloomberg data.
Silver for immediate delivery dropped 0.2% to $20.95 an ounce in London.
Platinum declined 0.3% to $1,480 an ounce. Palladium rose 0.3% to $876.20 an
ounce. It reached a 13-year high of $889.75 on July 17.
Geopolitical tension should support gold at the 200 day moving average at
$1,286/oz. Gold breached the 100 day moving average at $1,301 overnight and
the next level of support is at the 50 day moving average at $1,294 (see
chart).
Gold in U.S. Dollars - 50, 100, 200 SMAs (Thomson Reuters)
Worries over tougher sanctions on Russia and their potential impact on
fragile Eurozone growth and the conflicts in Ukraine and the Middle East are
leading to some safe haven demand. Geopolitical tensions threaten oil
supplies from key oil producing regions which should also support gold.
A more hawkish FOMC tone and positive payroll data could pressurise gold
in the short term as the short term trend is again lower after last weeks
falls.
The China Gold Association said in a statement on Thursday that China's
gold demand fell 19.4% in the first six months of 2014 from year ago. We are
not sure if the Chinese Gold Association numbers are an accurate reflection
of actual Chinese demand. We believe the data from the Shanghai Gold Exchange
(SGE) on gold withdrawals from the SGE is a better indicator of total Chinese
gold demand. It shows that total Chinese gold demand is over 998 MT year to
date.
EU Bail-Ins - Austria Next?
The EU drive toward bail-ins continues unabated. So too does the increasing
uncertainty for investors in European financial institutions and depositors
in European banks.
The coming bail-in regime raises the spectre of the effective loss of
their investments and savings due to the new legislation which will again
bail out insolvent banks.
On July 8, the government in Vienna had its parliamentary groups pass
special legislation for a bail-in of Hypo Alpe Adria bank (HAA), in the range
of nearly EUR 900 million.
The Austrian government’s legislation on bail-ins
goes further than EU legislation, as it does not exempt from the bail-in the
first EUR 100,000 on deposit.
The victims of the bail-in are hundreds of thousands of Austrians who
bought life insurance policies.
Indeed, the insurance companies had invested in HAA bonds that will no
longer be guaranteed under this legislation. Specifically, it hits the
policies of civil servants (at Oesterreichische Beamten-Versicherung), of
municipal workers and employees (Wiener Staedtische Versicherung) and others
who bought insurance from Uniqua.
Previously, the Austrian province of Carinthia had guaranteed the bank,
but incredibly the new legislation declares that guarantee to be invalid
retroactively. This then invalidates the transfer of that guarantee to the
Austrian state when the bank was nationalized in 2009.
The retrospective bail-in of a state guarantee in respect of subordinated
debt is unprecedented in this context.
The Austrian government claims the legislation only applies to the case of
the HAA, but critics have correctly warned that a dangerous case of
precedence has now been set, leaving the door wide open for other
expropriations and deposit confiscation.
The developments cast doubts on Marc Carney’s and Bank of England
officials that bail-ins are only for large systemically important
institutions.
Bail-ins are coming to financial institutions and banks in the EU, UK,
U.S. and much of the western world - with painful consequences for unaware
savers.
Must read guide and research to deposit confiscation and banks that are
vulnerable to deposit confiscation can be read here:
Protecting
Your Savings In The Coming Bail-In Era
From
Bail-Outs to Bail-Ins: Risks and Ramifications
