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Today's AM
fix was USD 1,569.50, EUR 1,248.01, and GBP 1,006.09 per ounce.
Yesterday’s AM fix was USD 1,567.75, EUR 1,261.47, and GBP 1,008.98 per
ounce.
Silver is trading at $27.26/oz,
€21.25/oz and £17.54/oz. Platinum is
trading at $1,420.25/oz, palladium at $576.20/oz and rhodium at $1,190/oz.
Gold fell $17.70 or 1.12% in New York yesterday and
closed at $1,557.00/oz. Gold climbed over 1% overnight in Asia and maintained
those gains in European trading.
Cross Currency Table – (Bloomberg)
Gold rose
after European leaders agreed a “deal” which has helped bring
down soaring borrowing costs in Italy and Spain.
Stock and
commodity markets have greeted the news with enthusiasm and seen strong
gains. Peripheral Euro nations bonds have seen gains in a relief rally and
their yields fallen although Italian bond yields remain over 6%.
German bonds
fell quite sharply and yields rose with the German 10 year rising from 1.51%
to 1.62%. UK and US bonds were also sold with a
consequent rise in yields.
While the
move helped ease fears over the region's debt crisis, large structural issues
remain unaddressed and much of the debt remains still there and there may
even be more of it post this 'deal' (see Dr Gurdgiev of GoldCore’s
Investment Committees analysis in Commentary below).
For the month
of June, gold is 0.6% higher in dollar terms, 0.7% higher in sterling terms
and 1.1% higher in euro terms.
While, gold
is on track to post its worst quarter since 2004 (down 5.7% in dollar terms),
year to date gold is up 0.35% in dollar terms, 3.3% in euro terms and only
down 0.1% in sterling terms (see performance table).
Thus, despite
its correction and ongoing consolidation, gold has again outperformed most
currencies and indeed many assets.
Stocks are
mixed year to date with the S&P 500 and DAX both up nearly 6% while the
FTSE is 0.3% lower and the CAC in France is down 1.5%.
Europeans
trying to protect their wealth from global economic uncertainty have been
stashing bank cash and gold bullion coins and bars in safety deposit boxes
and depositories in Switzerland.
The euro zone
debt crisis and fear that ultra loose monetary policy
by central banks will stoke inflation have sent investors in search of extra
security according to Reuters.
With central
banks around the world flooding markets with liquidity, some people fear spiralling inflation. People are turning to assets that will
keep their value if prices rise.
“So
much money has been pumped into the system that people are worried about
inflation down the road,” said Bruno S. Frey, professor of economics at
the University of Zurich. “You counter that by buying real assets of material
value.”
Gold is an
increasingly attractive option.
An Italian
businessman was recently caught trying to smuggle gold bars into Switzerland
under his car seat.
Further
evidence of rising interest in gold is seen in the fact that due to the
increased flow of gold bullion into Switzerland, the respected depository,
Via Mat International is currently adding capacity in their storage facility
in Zurich airport.
Private-banking
clients in Switzerland and Austria are holding wealth in less risky assets as
confidence in the financial system and the ability of advisers to secure
investment returns remains low, according to a study by LGT Group and
Johannes Kepler University which was reported on by
Bloomberg.
“The
majority of private-banking clients remain risk-averse,” Vaduz,
Liechtenstein-based bank LGT Group and Linz, Austria-based Kepler University said in a joint report. “The high
level of risk awareness and loss of confidence are reflected in the high cash
share of portfolios.”
In
Switzerland, 77 percent of investors described themselves as “risk
averse” or “risk neutral,” compared with 78 percent in
Austria.
More than
half of those surveyed said confidence in the financial system had been
“severely dented,” while 22 percent expect the euro region to
“collapse,” a scenario that prompted Austrians in particular to
ditch their home-currency holdings in favor of Swiss francs and some are also
turning to gold bullion.
European
clients including German, Austrian and Swiss clients have definitely been
adding to allocations in recent weeks as the debt crisis contagion risk rose
again.
There remains
a preference for allocated accounts in Zurich but allocated accounts in
Perth, Singapore and Hong Kong have seen increased interest.
OTHER NEWS
(Bloomberg) -- Morgan Stanley Recommends Gold, Copper on Outlook for
Demand
Morgan Stanley backed gold, copper and iron ore on expectations that
demand will increase while supplies are constrained even as it cut forecasts
for the metals after prices fell on concern that global growth is slowing.
“The
gold bull market is not over,” analysts Peter Richardson and Joel Crane
wrote in a report today. The bank reduced gold estimates by as much as 16
percent to 2014, saying bullion may average $1,677 an ounce this year
compared with the previous estimate of $1,825.
(Bloomberg)
-- Gold Traders Extend Bullish Streak on Debt Crisis: Commodities
Gold traders are bullish for a sixth week on speculation that Europe’s
debt crisis will boost demand from investors seeking to protect their wealth
and drive prices higher after the biggest quarterly slump in eight years.
Sixteen
analysts surveyed by Bloomberg said they expect a rally next week and 10 were
bearish. Another five were neutral. Investors added about $1.9 billion to
holdings in gold-backed exchange-traded products this month, the most since
November, according to data compiled by Bloomberg. Hedge funds and other
speculators have increased bets on a rally for four consecutive weeks, U.S.
Commodity Futures Trading Commission data show.
Spain
formally asked for a bailout for its banks on June 25 and Cyprus that day
became the fifth member of the 17-nation euro zone to ask for outside help.
European leaders agreed today to ease repayment rules for emergency loans to
Spanish banks and relax conditions on potential help for Italy. Gold fell to
within 1 percentage point of a bear market in May as some investors sold
bullion to cover losses in stock markets as $7 trillion was erased from
global equities in about two months.
“While
demand has been weaker for bullion in recent months, it has picked up in the
last month,” said Mark O’Byrne, the executive director of
Dublin-based GoldCore Ltd., a brokerage that sells
and stores everything from quarter-ounce British Sovereigns to 400-ounce
bars. “A resolution to the crisis is not going to be seen in the short
term. A lot more speculators could pile back into the market.”
(Bloomberg)
-- Commodity ‘Supercycle’ Has Not
Ended, David Hightower Says
The commodity “supercycle” is not over
because consumer demand for food and energy won’t ebb, said David
Hightower, the president of the Hightower Report in Chicago.
“The
talk of the commodity supercycle being ended is
just utter nonsense,” Hightower said today in a presentation at the
INTL FCStone Outlook Conference in Chicago.
“The downside potential in most physical-commodity prices has already
run almost to the end of its train track.”
NEWS
Gold Analysts Extend Bullish Streak As Debt Crisis
Deepens - Bloomberg
Gold rises on EU pledge; eyes worst quarter in 8 yrs - Reuters
Gold, silver rally after EU bank plan
- MarketWatch
COMMENTARY
Gurdgiev: The 'Deal' - Preliminary Reaction
– True Economics
Full EU Summit Statement (In All Its Conditional
Wishy-Washy Glory) – Zero Hedge
Doug Casey on the Coming Eurocrash
– Casey Research
Zombie Bank Apocalypse – Keiser
Report
Hathaway: Gold "Always Invited Back Into The
System.... – King World News
Mark
O’Byrne
Goldcore
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