Gold’s London AM fix this morning was USD
1,657.00, GBP 1,077.09, and EUR 1,290.80 per ounce.
Yesterday's AM fix was USD 1,662.00, GBP 1,080.34, and
EUR 1,299.76 per ounce.
Cross Currency Table – Bloomberg
Spot gold has swung between a low of $1,645/oz and a high of $1,660/oz in
Asian and early European trading after rising another 1.25% yesterday. Gold spiked
above €1,300/oz on continuing concerns about
the Eurozone and the euro.
The yellow metal climbed to $1,667.90 yesterday its
highest since December 13th and an increase of 6.7% in 2012, as the dollar
fell. The dollar's weakness was attributed to poor US production and
homebuilder data combined with Greece announcing it is nearing a deal on its
debt. Prime Minister, Lucas Papademos is resuming
private talks with the bondholders today.
Portugal will test investor appetite as it launches its
debt auction today. Concerns about financial stability in Hungary and
contagion risk in the Eurozone continue.
India raised its tax on imports of gold bars and coins
(2%) and silver (6%) yesterday. This is a 90% increase on gold and double the
previous amount charged on silver. Traders and analysts do not think that the
increase will have an effect on the strong demand from Indian consumers. The
increase in duty is not that large in rupee terms given the strong rise of
gold in rupees in recent years.
Current weakness in the market provides another buying
opportunity and is a good time to accumulate a position for the long term.
Gold Spot (Euros) €/oz
- Daily 1/18/11-1/18/12 - Bloomberg
The world's biggest primary silver miner, Fresnillo, had flat silver production in 2011. Output is
only expected to remain stable in 2012.
African Barrick Gold said on
Wednesday fourth quarter gold production fell 11% and missed its annual
Despite price rises seen in 2011, gold and silver
mining is remaining static contrary to claims by gold bears that higher
prices would lead to increased production and therefore increased supply.
Geological constraints may be impacting mining companies ability to increase production of the precious
Standard Bank has said it lowered its average 2012 gold
price forecast by 6 percent to $1,780 an ounce, but continues to expect
prices of the precious metal to touch new highs in the latter half of this
"We maintain that gold will reach new highs this
year but, given our dollar view, we believe that these highs will be reached
only in the second half of 2012," the analyst said in a note. Standard
Bank expects the U.S. dollar to gain strength, especially against the euro,
over the next quarter.
A few other banks have recently lowered price forecasts
for gold, including ANZ and Credit Suisse – however the majority remain bullish on gold’s outlook for 2012.
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