Today’s AM fix was USD
1,703.00, EUR 1,300.79, and GBP 1,057.90 per ounce.
Yesterday’s AM fix was USD 1,706.75, EUR 1,305.35, and GBP 1,058.65 per
Silver is trading at $33.15/oz, €25.46/oz and
£20.67/oz. Platinum is trading at $1,597.00/oz,
palladium at $681.00/oz and rhodium at $1,075/oz.
Cross Currency Table – (Bloomberg)
Gold fell $18.50 or 1.08% in
New York yesterday and closed at $1,696.70/oz. Silver slid to as low as
$32.66 and finished with a loss of 1.88%.
Gold futures selling after
midnight in New York, when European and American traders are away and Tokyo's
gold trading is quiet after lunch, drove prices down $10/oz
in only one minute. More than 3,000 gold-futures contracts changed hands at
12:47 a.m. New York time, and the market's quick slide triggered an
automatic, 20-second trading halt in February gold futures, said the operator
of the Comex.
According to Dow Jones,
preliminary exchange data showed that trading volume from 12 until 1am was
over 6 times the average of the last month.
Gold has recovered from the
fall yesterday and overnight and is tentatively above $1,700/oz.
There was no fundamental
driver of the price falls yesterday or today. It may have been momentum
traders selling as the short term trend is now down. Yesterday stop losses
were breached at $1,710 & $1,700 which led to further falls.
Support is now at the early
November lows of $1,673/oz – seen just before
The stalemate between the US
Congress and the White House has some players waiting on the sidelines.
Important on the horizon is
the Fed meeting next week December 11 and 12th, the latter including a
summary of economic projections and a press conference by the Chairman. In
the minutes released after the last meeting, the US Fed layout a threshold
strategy where the Fed would maintain near zero interest rates based on an
economic variable such as employment rates at 7.5%.
The crux of the issue FOMC
members is deciding whether that variable should be given with numeric or
verbal guidance. Since, Operation Twist is expiring at the end of the year;
information is necessary as to when it will be replaced with QE4.
The Bank of Korea increased
gold reserves 20% last month to diversify investments, boosting holdings for
the fourth time since June 2011 and underscoring increased demand by central
banks according to Bloomberg.
The bank added 14 metric
tons in November, bringing the total to 84.4 tons, the bank said in a
statement today. By value, holdings increased about $780 million to $3.76
billion, equivalent to 1.2% of total reserves, the bank said.
“Gold is a physical,
safe asset,” the Bank of Korea said in the statement. The precious
metal “is a way of diversification, which helps reduce investment risk
in terms of foreign-exchange reserves management,” it said.
The Bank of Korea bought 16
tons in July, 15 tons in November 2011 a further 25 tons over a one-month
period from June to July last year.
Gold 1 Year – (Bloomberg)
Russia Favors Gold Over
Minister Anton Siluanov speaking to reporters
yesterday said that gold is seen by Russia’s central bank as a
“rather stable” asset amid global monetary easing.
The world’s biggest
energy exporter saw gold and foreign exchange reserves rise to $524.3 billion
in the week to Nov. 23 from $522.2 billion a week earlier.
At the end of 2011, Russian
foreign exchange reserves (including monetary gold, special drawing rights,
reserve position at the IMF and foreign exchange) were at $498.6 billion.
They remain the world’s fourth biggest after China, Japan and Saudi
Arabia. More than 41 percent of its currency reserves were in euros as of
Sept. 30 but the Russia central bank is gradually reducing its exposure to
the dollar and the euro.
Silver 1 Year – (Bloomberg)
Separately, China and Russia
pledged to further strengthen their economic and financial cooperation at a
bilateral dialogue between the two countries' said finance ministers on
Chinese Finance Minister Xie Xuren and his Russian
counterpart Anton Siluanov co-chaired the Fourth
Russia-China Finance Ministerial Dialogue, during which the two sides
discussed a number of bilateral and international economic and financial
issues, according to Xinhua.
The two sides exchanged
views on the global macroeconomic situation, policies and measures to promote
sustainable economic growth in both countries, as well as the fiscal regime
and tax framework.
The two ministers also
discussed how to strengthen international financial cooperation between China
Central banks in South
Korea, China and Russia realise gold bullion is a safe haven asset.
The majority of retail
investors and the general public in the most of the world, and especially the
western world do not ... yet.