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Gold’s London AM fix this morning was USD
1,652.50, EUR 1,257.71, and GBP 1,020.44 per ounce.
Yesterday's AM fix was USD 1,661.25, EUR 1,253.02 and
GBP 1,024.70 per ounce.
Gold fell $4.40 or 0.26% in New York yesterday and
closed at $1,661.70/oz. Gold rose to over $1,670/oz in early US trading prior to selling capped price
gains and the price then fell back to the $1,660/oz
level.
Gold gradually fell during trading in Asia and this
weakness has continued in European trading where gold looks set to test the
$1,650/oz level or $1,646/oz,
the price low after the $1.24 billion sell trade on Monday.
Cross Currency Table – Bloomberg
Gold’s weakness yesterday may have been due to
the positive manufacturing data in China and the US leading to traders being
hesitant to commit to the long side.
The slowdown in demand from India and data showing
holdings in ETFs dropped to the lowest level in 3 months and US Mint monthly
gold coin sales fell in April falling to the lowest level since June 2008 may
have may have also tempered enthusiasm.
However, central bank demand is likely to be continuing
at these levels and central banks are almost certainly still buying on the
dips. Bullion coin and bar demand and ETF demand is likely to pick up in the
coming weeks when the global debt crisis deteriorates again.
Data from Europe this morning was very negative with
Italian industrial production (PMI) falling off a cliff, German manufacturing
shrinking, Irish exports faltering on slower global growth, the Greek economy
still floundering and Spanish unemployment figures appalling.
The Chairman of the White House Council of Economic
Advisers, Alan Krueger, said yesterday that the European crisis poses
“some risk” to the US and global economy. Four US central bankers
said that more stimuli probably won’t be needed. The Fed bought $2.3
trillion of bonds in two rounds of so-called quantitative easing from
December 2008 to June 2011 thereby debasing the dollar.
HSBC Securities on April 29 downgraded its forecast for
average gold prices this year to $1,760/oz from
$1,850/oz, with analyst James Steel citing “a
steep reduction in market expectations of further quantitative easing or
other monetary stimulus.”
America's “Safest Long Term Investment” Is
Gold - Gallup
Americans feel “gold is the safest long term
investment” today, a Gallup survey has found.
Gold was favoured over four
other types of investments perceived as the best long term choice for
American investors today.
28% of the American public choose
gold as their favoured investment of choice today.
Gold in USD – 3 Days (3 Minute) – Bloomberg
Real estate followed in second place, with 20% seeing
it as the best long term investment.
Paper assets were less popular with savings accounts
and certificates of deposits (CDs) tied with stocks and mutual funds at 19%.
Bonds came last at 8%.
This suggests that the American public may not be as
uninformed when it comes to investing as is often suggested.
According to Gallup, "investing in gold has gained
in popularity in recent years as low interest rates have made traditional
savings instruments less attractive, and instability in the stock and real
estate markets has undermined the mass appeal of those options."
"Meanwhile, the rising trajectory of the price of
gold over the past several years apparently offers more of the returns and
stability investors seek."
While some may find the Gallup poll findings worrisome
from a contrarian perspective, it is not.
Gold ownership remains very low amongst the public in
most of the western world.
The poll’s findings suggest that this may change
in the coming months and years.
While surveys often show that people are favourably disposed towards and instinctually trust gold,
there remains a massive lack of knowledge about how to “invest
in” or buy gold for financial insurance reasons. This lack of knowledge
and awareness leads to the low levels of gold ownership in the western world
today.
Gold in USD (White), EUR (Orange) and GBP (Yellow) YTD
– Bloomberg
The non-specialist financial media continues to rarely,
if ever, cover gold. When it does cover gold it is often in a negative light
– with frequent suggestions that it is a “bad investment”
and a “bubble”. Also, gurus or experts are often allowed to voice
their negative opinions on gold without seeking plurality of opinion and
getting the other side of the argument.
There are rarely comprehensive articles looking at the
best, most cost-effective and safest ways to own gold as there are with other
asset classes such as bank deposits, bonds and equities.
This will change in the coming years when there is less
of a bias against gold and a realisation of the
importance of gold as a diversification, and gold is treated and covered in the
same way that equities, bonds and cash are covered today.
OTHER NEWS
(Reuters Global Gold Forum)
It looks like some appetite for gold coins has returned
in the United States, with 10,000 ounces of American Eagle gold coins sold on
May 1, according to the U.S. Mint. That's already half the total amount
recorded for the whole of April (though that was the weakest month in nearly
four years).
(Bloomberg) -- India’s April Gold Imports Plunge
to 30-35 Tons, Group Says
Gold imports by India, the world’s biggest
bullion buyer, plunged to 30 metric tons to 35 tons in April from 90 tons a
year earlier after higher import taxes weakened demand, an industry group
said.
Demand remains dull in India as prices trade near
record levels due to a decline in the local currency, Prithviraj
Kothari, president of the Bombay Bullion Association, said in a phone
interview today. Imports in 2012 are expected to be 700 tons to 750 tons, he
said.
(Bloomberg) -- Comex
Suspended Gold Trading in N.Y. Yesterday After Price Drop
CME Group Inc.’s Comex
halted trading in gold futures for about 10 seconds yesterday at 8:31 a.m.
after prices declined, said Damon Leavell, a
spokesman in New York. The so-called Stop Logic halt, engineered by the
exchange, is designed prevent excessive price movements, according to the Comex website. Gold futures for June delivery, which
settled 60 cents lower at $1,664.20 an ounce yesterday, dropped about $14.50
shortly before 8:30 a.m. local time, data compiled by Bloomberg show.
The market was given a short period of time to regain
its equilibrium, Leavell said in a telephone
interview. CME declined to comment on the size of the trade that led to the
halt.
“The stop-logic functionality happens across all
markets at different times and can even happen several times in a day,”
he said.
Comex halted trading after Comex
recorded a transaction of 7,500 gold futures during one minute of trading,
Dow Jones reported earlier.
(Bloomberg) -- BNP Paribas Lowers 2012 Gold Forecast to
$1,715 an Ounce
BNP Paribas SA lowered its 2012 gold forecast by $140
an ounce to $1,715, according to an e-mailed report from the bank today. It
cut its silver estimate for this year by $4.40 an ounce to $33.10.
For breaking news and commentary on financial markets
and gold, follow us on Twitter.
NEWS
Gold Still Americans' Top Pick Among Long-Term
Investments - Gallup
Gold Weakens as Manufacturing Data Improves - Business Week
Gold retreats as US data eases economy worries
- Reuters
Gold extends losses in electronic trading
- MarketWatch
HSBC lowers 2012 gold forecast 5% to $1,760/oz - MarketWatch
COMMENTARY
Hillary Clinton’s Headaches Are Waiting in
China - Bloomberg
Total US Debt Soars To 101.5% Of GDP
– Zero Hedge
Embry - This is What I’m Doing with My Own
Money Right Now – King World News
Too Stupid To Think… Too Paralyzed To Act –
24HGold
The “Mistake of 1937” - GoldSeek
Mark
O’Byrne
Goldcore
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