Today’s AM fix was USD
1,724.75, EUR 1,360.86, and GBP 1,085.23 per ounce.
Yesterday’s AM fix was USD 1,735.75, EUR 1,365.44, and GBP 1,091.39 per
Silver is trading at $32.63/oz, €25.76/oz and
Platinum is trading at $1,591.00/oz, palladium at
$614.50/oz and rhodium at $1,085/oz.
Global Commodity Prices & Data – (Bloomberg)
Gold fell $3.10 or 0.18% in
New York yesterday and closed at $1,727.90. Silver slipped to a low of
$32.186 and finished with a loss of 0.49%.
Gold edged down on Tuesday
on low volumes when the euro dropped to a 2 month low against the US dollar
despite confusion about a deeper bailout package for Greece has driven many
investors to wait on the sidelines.
Eurozone finance ministers
suggested that Athens should be given until 2022 to lower its debt to GDP
ratio to 120% but IMF chief Christine Lagarde
insisted the current target of 2020 should remain.
Gold’s rally in 3Q saw
it hit just short of $1,800, down from the all time
nominal record of $1,920 in 2011 when investors turned to the yellow metal as
an inflation hedge and safe haven during the height of the European debt
Barrick Gold’s (the largest
mining producer) CEO, Jamie Sokalsky, said prices
may rise to $2,000 in 2013 as costs and barriers to production restrict
supply, while demand from central banks and Chinese consumers keeps climbing.
New York’s SPDR Gold
Trust, the largest ETF, dropped 0.07% on Friday from Thursday, while those of
the largest silver-backed ETF, New York’s iShares
Silver Trust rose 0.45% percent over the same period.
The Telegraph has an
interesting article on silver which suggests that it might rise by over five
times in the next few years.
Emma Wall interviews fund
manager Ian Williams who says that "silver is about to enter a sustained
bull market that will take the price from the current level of $32 an ounce
to $165 an ounce and we expect this price to be hit at the end of October
"This forecast is based
entirely using technical & cyclical analysis and is in keeping with the
mathematical form displayed so far in the bull run that has taken silver from
$8/oz in 2008 to its current price of $32 an ounce
– having hit $50 an ounce in 2011."
Mr Williams noted that the
silver price was more volatile than gold, but that he predicts silver to
continue to dramatically outperform gold.
manager said that macro fundamentals were supportive for the silver price,
such as the re-election of President Obama, who supports Ben Bernanke's
policy of quantitative easing.
Gold Spot $/oz, 2 Years – (Bloomberg)
"Strong demand for
precious metals will remain as long as we have QE, which do well with each
round of money printing. QE is bound to lead to inflation at some point and
at that time, real assets will do best," he said.
"Investing in a fund
that holds a range of precious metals gives you positive diversification and
less reliance on just gold."
We have long been more
bullish on silver than on gold and have said since 2003 that silver will
likely reach its inflation adjusted high of $150/oz
in the coming years. Indeed, we believe that the end of the precious metal
bull markets may see the gold silver ratio return to its geological long term
average of 15:1.
Therefore were gold to trade
at over its inflation adjusted high of $2,500/oz
(as we believe likely) then silver would be priced at $166.66/oz or $2,500/oz divided by 15.
We have also long suggested
that owning both gold and silver was sensible from a diversification point of
view. Gold is more of a safe haven asset and currency in general and is more
of a hedge against macroeconomic and monetary risk.
Silver is similar, while
more volatile, but continues to have the potential for far higher returns.
For breaking news and
commentary on financial markets and gold, follow us on Twitter.
(Bloomberg) -- Gold to Climb to $1,849, LBMA Survey Shows, as Outlook Cut
Gold will probably gain 7 percent to $1,849 by September, according to
the average response in a survey of attendees at the London Bullion Market
Association’s annual conference, who cut predictions during the two-day
Attendees said in a separate
survey yesterday that the metal may trade at $1,914 an ounce by the
LBMA’s next annual gathering in 10 months, according to Tom Kendall,
head of precious-metals research at Credit Suisse Group AG, who presented the
findings in Hong Kong today. Rallies were also forecast for silver and
platinum, the results showed.
While gold is poised for a
12th year of gains as central banks including the U.S. Federal Reserve ramp
up stimulus, it’s 10 percent below the all-time high reached last year.
Gold may surpass $1,800 this year depending on further actions from the Fed,
according to Kendall, the most accurate precious-metals forecaster in the
past eight quarters tracked by Bloomberg. Goldman Sachs Group Inc. expects
gold futures to gain to $1,940 an ounce in 12 months, according to a report
dated Nov. 9.
“The price can trend a
little bit higher,” Kendall said in an interview on Nov. 11.
“It’s going to be a market that needs fresh stimulus or a new
geopolitical headline to get investors really excited about gold again.”
Gold for immediate delivery
declined as much as 0.4 percent to $1,721.55 an ounce and traded at $1,724.95
at 5:33 p.m. in Hong Kong. Spot gold reached an all-time high of $1,921.15 on
Sept. 6, 2011.
At the LBMA’s last annual gathering, held in Montreal in September
2011, the average response in the final survey was for a rally to $2,019 by
the time of the Hong Kong meeting. After the results was released on Sept. 20
that year, the highest that gold reached was $1,816.70, touched the following
Silver will probably climb
to $38.40 an ounce by September, according to the survey today, from $32.27
now. Platinum may advance 14 percent to $1,794.90 an ounce, while palladium
may gain 18 percent to $724.70 an ounce, the results showed.
The Fed said on Oct. 24 it
will maintain $40 billion in monthly purchases of mortgage debt and probably
hold interest rates near zero until 2015 to spur growth and reduce
joblessness. The Bank of Japan expanded an asset-purchase program on Oct. 30
for the second time in two months and the European Central Bank has said that
it is ready to buy bonds of indebted nations.
“Next year it’s
reasonable to be talking about a gold price of between $1,800 and $2,000,” said Kendall. For the metal to reach the
“top end of that range, it will require investors to become more
engaged in the gold market again, particularly on the institutional
Holdings in gold-backed
exchange-traded products were unchanged at 2,594.6 metric tons yesterday
after reaching a record 2,596.1 tons on Nov. 8, data compiled by Bloomberg
show. They have risen 10 percent this year.
The LBMA is a London-based
group that represents the wholesale market for gold and silver.
(Bloomberg) -- Gold Mining
Breakeven Costs Are Increasing, Barrick CEO Says
breakeven cost for mining gold is going up on so-called resource
nationalization, a shortage of skilled labor, infrastructure access to remote
mines and rising capital expenditures, Jamie Sokalsky,
CEO of Barrick, said at a conference in Hong Kong
(Bloomberg) -- Gold Bull
Market Shows No Signs of Reversing, Barrick CEO
bull market shows no signs of reversing, Jamie Sokalsky,
ceo of Barrick Gold
Corp., said at a conference in Hong Kong today.
Mine supply hasn’t
kept up with demand as production is declining in mature areas and costs are
increasing, he said.
Russia’s Palladium Sales Seen Dropping to 250,000 Ounces in 2012
palladium stockpiles in the country may be lower or zero next year, Mark Danks, marketing manager at Johnson Matthey, says in
Moscow. *NOTE: Russia’s palladium sales from stockpiles were 770,000 oz in 2011.
Cross Currency Table – (Bloomberg)