|
Today’s
AM fix was USD 1,734.75, EUR 1,345.39, and GBP 1,088.37 per ounce.
Yesterday’s AM fix was USD 1,729.75, EUR 1,344.23, and GBP 1,084.35 per
ounce.
Silver is
trading at $33.43/oz, €26.02/oz and £21.07/oz. Platinum is trading at $1,583.00/oz, palladium at $654.70/oz and
rhodium at $1,040/oz.
Cross Currency Table - (Bloomberg)
Yesterday New
York was closed for the American holiday of Thanksgiving. Today trading
finishes at noon. With very little data today, trading is expected to be
relatively quiet ahead of the weekend after yesterday's Thanksgiving holiday.
Gold inched up
on Friday, set for its 2nd week of gains, as the euro strengthened on news of
advancement in Greece’s bailout talks while the looming US fiscal cliff
continues to support bullion.
Stock markets
are down a touch and oil prices are edging lower due to the ceasefire in the
Gaza strip and demand destruction concerns.
Greece's
lenders have finalized new means to trim its debt burden but still need to
fill a $12.9 billion gap to receive the approval of the IMF said a senior
Greek official.
Central bank
buying, the US fiscal cliff and continuous loose
money policies from nations around the globe all cement the yellow
metal’s appeal as a hedge against inflation.
Gold is
nearing some key chart levels and these were commented upon by UBS this
morning and noted by Reuters.
“Gold is
just a few dollars shy of its 50-day moving average sitting at $1741, and
more importantly, a key technical level lurking at $1739.10," it said.
"Our
technical strategist notes that a break above this level, which is the
month’s high, would be a crucial bullish development that would open up
$1748.95, the 62% retracement of the October/November sell-off ahead of
$1794.80, the October high."
"The
yellow metal seems on the verge of a break higher," the bullion bank
added. "But with trading for what’s left of the week expected to
extend yesterday’s quiet $5-range, market participants may have to wait
until after the weekend to see some action. The advantage of this is that
investors still have the day ahead to position for what may be an exciting
week in store for them."
Currency Ranked Returns G10 & Precious Metals in Brazilian Real
– (Bloomberg)
The IMF
reported Wednesday that the Banco Central do Brasil has increased its gold holdings for the second
straight month, to the highest level in 11 years, as Latin America’s
biggest economy looks to diversify its vast international reserves.
Brazil’s
aggressive efforts to weaken its currency by buying dollars – about
$132 billion since the beginning of 2008 – have left the country with
the sixth biggest international reserves in the world, about 80% of which is
denominated in the US currency.
However,
recent turmoil in currency markets and concerns over the global financial
crisis and fiat currencies in general has given Brazil’s authorities
even more reason to diversify their holdings.
It has
frequently stated its intention to diversify assets and reduce its exposure
to currency risk.
Recent sharp
weakness in Brazil’s real (see table) and systemic risks are leading
central banks, including the BCB to diversify into gold.
Brazil raised
its gold holdings by 17.2 tonnes in October to 52.5
tonnes, the highest level since January 2001. The
move comes on the back of Brazil’s 1.7 tonne
increase in September, the country’s first significant gold purchase in
a decade.
In December
last year, 83.5% cent of the central bank’s $352 billion reserves was
held in increasingly risky government bonds, 15.6% was in other bonds and
bank deposits while only 0.8% of reserves was held in other asset classes
such as gold.
In its
international reserves report in June, the central bank said the recent surge
in reserves had allowed the country to hedge its external liabilities,
allowing it to now “seek a greater diversification of international
reserves.”
However, there
are concerns that the increase in the Brazilian central bank gold holdings'
and tonnage are not all that they seem. It appears that the central bank in
Brazil has not actually bought London Good Delivery bullion bars but rather
fixed term gold deposits with bullion banks.
Recently, the
Brazilian central bank was asked about their gold reserves and about a section
on gold on their website under 'Official Reserve Assets' lists gold as
"gold (including gold deposit and, if appropriate, gold swapped)"
with a footnote of "Includes available stock of financial gold plus time
deposits."
Although
Brazil’s central bank declined to comment on the reason behind its
recent return to gold purchases, the Banco Central
do Brasil confirmed that the gold included in
Reserve Assets comprises fixed term gold deposits at commercial banks only.
XAU/BRL Exchange Rate, Monthly – (Bloomberg)
Therefore,
rather than being outright owners of their national patrimony either in their
own vaults in Brazil or in the vaults of other central banks, some of the
Brazilian gold reserves may be a claim on gold deposits held with bullion
banks .
This would be
unusual and poses increased counter party risk for the Banco
Central do Brasil and the Brazilian currency
reserves.
|
