The gold price traded in a narrow range around
$1,691 per ounce Thursday morning in London, rising slightly from yesterday's
Asian and European stock markets also ticked higher, as
did US Treasury bonds.
Silver rallied to $32.78 per ounce after losing nearly
3% this week so far, but commodities more broadly slipped again.
"Risks to our [economic] growth outlook remain
elevated," said a widely-reported gold price forecast from
investment-bank Goldman Sachs on Wednesday, "especially given the
uncertainty around the fiscal cliff.
"[That] makes calling the peak in gold prices a difficult exercise.
[But] the gold cycle is likely to turn in 2013," says Goldman analyst
Damien Courvalin, lowering his 12-month forecast to
$1,800 per ounce.
Looking at the commodities sector more broadly, "Supply-side
fundamentals, demand elasticity and idiosyncratic
risks will prove increasingly important in driving price action,"
counters Hussein Allidina in his 2013 Commodities
Outlook for Morgan Stanley.
"Under this lens, we favor exposure to gold/silver,"
he says, forecasting an average gold price in 2013 of $1853 per ounce.
The US Federal Reserve "is set" to launch a
fourth round of quantitative easing Treasury-bond buying, says a story on
Reuters today, claiming that the Fed "[will] replace Operation Twist
with $45 bln in new bond buys."
Greece meantime was declared to be in "selective
default" today by the Standard & Poor’s ratings agency,
because Athens' buy-back of debt from private holders – scheduled for
two weeks' time – will give those investors "less value than the
promise of the original securities."
Spending €10 billion, Greece will give the
bondholders a maximum of €0.40 per euro, according to the Wall Street
Ahead of the latest European Central Bank policy
statement and press conference, the Euro stemmed Wednesday's 1-cent drop at
$1.3050, while the gold price for Eurozone investors bounced €5 from
its 6-month low of €1,290 per ounce.
The British pound meantime held near a 1-month high of
$1.61 after the Bank of England kept its interest rate at a record low of
0.5% for the 44th month running, and reconfirmed its quantitative easing
target of £375 billion in government debt purchases.
"Positive US data [on Wednesday] pointed to some
improvement in economic growth," says Commerzbank, "which did not
bode too well for the gold price.
"Silver followed gold's trail lower."
"Now that the key support level of $1,700 an ounce
has been breached," says David Levenstein in
his daily note for South Africa's Rand Refinery, "there is a possibility
that technical traders may attempt to push prices lower in the
"We're actually seeing a fairly mysterious seller
in the Asian time zone over the last week," says Jeffrey Rhodes, CEO of
INTL Commodities in Dubai, quoted by Emirates 24/7.
"We've seen some fairly large sell orders hit the
market in the thinly-traded twilight zone" between London and Asian
business, Rhodes says.
"Maybe that [push to lower prices] is a prelude to
buying gold...Either way, many players are closing their books for the year
– they've either made what they’ve made for the year, or
they’ve lost and don't want to lose anymore."
"Over the past four years December has
traditionally been a poor performing month for gold," writes Moudi Raad at Swiss refinery
group MKS, "averaging a decline of around 8% over that period."
Since 2008 the New Year has then seen what Raad calls "a solid turnaround, and with central
bank buying still on the cards and ETF holdings increasing for a 13th
straight session yesterday there is demand out there."
"There is some heavy selling by fund investors and
leveraged money," agrees Miguel Perez-Santalla,
vice president for the Americas here at BullionVault, speaking to Reuters.
"But physical gold demand should benefit in the
long run from the fiscal cliff after these short-term fluctuations."
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