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Today’s AM fix was USD
1,767.00, EUR 1,362.80, and GBP 1,101.35 per ounce.
Yesterday’s AM fix was USD 1,767.25, EUR 1,371.45 and GBP 1,103.29 per
ounce.
Silver is trading at $33.96/oz, €26.27/oz and
£21.21/oz. Platinum is trading at $1,679.50/oz,
palladium at $648.80/oz and rhodium at $1,205/oz.
Gold edged up $4.60 or 0.26%
in New York yesterday which saw gold close at $1,767.50. Silver climbed to a
high of $34.33 and then fell off and finished with a marginal loss of 0.12%.
Gold has seen volatile and
choppy trading overnight in Asia and in Europe this morning with the price
being capped at $1,772/oz and in a tight range
between $1,767 and $1,772/oz.
Cross Currency Table – (Bloomberg)
Gold remains robust in euro
terms at €1,364.50/oz and remains less than
only 1% away from new record highs in the single currency (see chart).
India and China are
embarking on their peak consumption season which may create a boost to the
physical market.
The far from resolved debt
crisis in Greece, Spain and most countries in the western world means that
this is another correction and investors and store of wealth buyers should
continue to accumulate on the dip.
Prices may remain contained
until after the U.S. election but we expect that soon after the election (we
expect Obama to be re-elected), precious metal prices will again surge.
Indeed, from November into the early months of 2013, we could see one of the
largest upward price movements in gold and silver so far in their bull
markets.
U.S. election years tend to
see gold underperform vis-à-vis other years and this was seen in 2004
(+4.7%) and 2008 (+5%) when gold saw only marginal gains compared to the 17% annualised dollar returns seen in that decade.
Post
election years saw stronger gains – with a 22% in 2005
and a 25% return in 2009.
This is likely due to the
governing administration, often in conjunction with the Federal Reserve,
doing all it can in order to artificially boost the economy and maintain
power.
Gold in Euros – 1 Year (Bloomberg)
Indeed, given the degree of
intervention in markets today, it is possible that the Working Group on
Financial Markets has been intervening in order to maintain orderly markets
and “investor confidence” - as is their function. This can often
artificially boost stock markets and often see a bout of dollar strength.
We believe that
macroeconomic and monetary conditions are far worse than is being
acknowledged by the White House, the Washington elites and Ben Bernanke and
that once the election is over there will be significant revisions to data
and the economic data will decline considerably.
Gold in Euros – 30 Day (Bloomberg)
There are historical
parallels with the 1933 election when Roosevelt was re-elected and there was
subsequently an admission that economic conditions were far worse than people
had been previously led to believe.
This creates the real
possibility of significant volatility and dislocations in markets in the
coming months.
Buyers should use this price
dip and any further dips in October to accumulate physical gold and silver in
the safest way possible.
UBS have lifted their
full-year 2012 forecast to $1700, from $1680 previously. For 2013 UBS now has
price targets on the average gold price of $1900, raised from $1725
previously.
Smart money internationally
continues to diversify into gold. Some of the wealthiest and most astute
managers of money in the world today remain bullish on gold due to the very favourable macroeconomic, geopolitical and monetary
fundamentals.
The Financial Review
(Australian) points out how Soros, Paulson and now Ray Dalio,
founder of Bridgewater Associates, the world’s biggest hedge fund are
all diversifying into gold (see commentary).
Warren Buffett is one of the
few wealthy individuals in the world to have absolutely rejected the idea of
owning gold as a hedge or safe haven asset and has indeed criticised
those who own gold.
Indeed, the recently made
bizarre comments regarding gold saying he would rather buy caves than gold.
He suggested that owning caves would be better than owning gold in the event
of currency devaluations.
Buffett is massively exposed
to man US dollar denominated stocks and to the U.S. banking sector and
appears to be either talking about his book or is simply very misguided.
His reputation as the most
successful investor of all time will be questioned in the coming years.
Gold in USD – 30 Day (Bloomberg)
As the Financial Review
states:
“Financial planners
and super fund managers have come around to holding bullion, previously
viewed as too speculative with no investment return, because it diversifies a
portfolio and moves independently of shares and other markets.”
There is also academic
research showing how gold is a proven hedging instrument and safe haven
asset.
In 2013 we are all going to
need to own safe haven assets and the safe haven money that is gold.
NEWSWIRE
(Bloomberg) -- Gold Gains on Renewed Europe Debt Concern After Spain
Downgrade
Gold rose for the first time in five days, snapping the worst losing run
in more than two months, on speculation Europe’s debt crisis will boost
demand for a protection of wealth.
Standard & Poor’s
cut Spain’s debt rating yesterday to one grade above junk on mounting
economic and political risks in the region. The U.S. Dollar Index, a gauge
against six counterparts, rose today to the highest level since Sept. 11.
Investment holdings of the metal rose to a record as buyers sought to
safeguard their wealth.
“Gold is being
supported by the risk of the eurozone debt crisis
intensifying with the focus again on Spain,” said Mark O’Byrne,
executive director of Dublin-based GoldCore Ltd., a
brokerage that sells and stores everything from quarter-ounce British
Sovereigns to 400-ounce bars.
Gold for immediate delivery
rose 0.4 percent to $1,770 an ounce by 9:14 a.m. in London. Gold for December
delivery rose 0.4 percent to $1,771.40 an ounce on the Comex
in New York.
London-traded bullion
declined 1.6 percent in the past four days and touched $1,757.10 yesterday,
the lowest price since Sept. 27.
Holdings in gold-backed
exchange-traded products rose for a 10th day to 2,582.97 metric tons
yesterday. Investors looking to store wealth should buy on dips, Euro Pacific
Capital Inc. Chief
Executive Officer Peter
Schiff said in a speech at a conference in Chicago. ETP holdings have risen
9.6 percent this year as central banks boosted stimulus to revive economic
growth.
Silver for immediate
delivery rose 0.8 percent to $34.255 an ounce. Platinum gained 0.4 percent to
$1,679.75 an ounce. Palladium advanced 0.7 percent to $654.50 an ounce.
(Bloomberg) -- Miners Reject
South Africa Gold Producers’ Wage Plan, Union Says
Members of South Africa’s biggest union rejected a proposal by the
nation’s largest gold companies to raise wages and end strikes that
have crippled the industry.
Employees who belong to the
National Union of Mineworkers didn’t accept the offer, spokesman Lesiba Seshoka said in a text
message in response to a query today.
AngloGold Ashanti Ltd., Gold
Fields Ltd. and Harmony Gold Mining Co. had offered an additional 2 percent
raise and Harmony 1.5 percent in categories four through eight this year, Elize Strydom, the chief
negotiator at the Chamber of Mines, an industry body that represents the
companies in wage talks, said yesterday. Category three, the entry level, would
be eliminated in the proposal, meaning the lowest-paid workers would get a
wage at the higher category.
About 41 percent of South
Africa’s gold output is idled, including all of AngloGold’s
mines. Two Gold Fields sites were halted after workers walked out without
heeding resolution procedures set out by labor laws, while miners have been
absent from Harmony’s Kusasalethu operation
since at least Oct. 3.
AngloGold erased earlier
gains, retreating as much as 0.8 percent to 295.37 rand and trading at 297.61
rand by 11:12 a.m. in Johannesburg. Harmony lost 0.2 percent to 69.36 rand.
Gold advanced 0.4 percent to
$1,768.50 an ounce in London.
(Bloomberg) -- Gold Imports
by China From Hong Kong Drop as Price Deters Buyers
Gold imports by China from Hong Kong fell 29 percent in August from a month
earlier amid a seasonal slowdown and as higher prices deterred buyers.
Mainland China bought 53,508
kilograms (53.51 metric tons), including scrap and coins, compared with
75,842 kilograms in July. Shipments were 23 percent more than the 43,660
kilograms a year earlier, data from the Census and Statistics Department of
the Hong Kong government show.
Gold is in the 12th year of
a bull run, 13 percent higher this year, as investors seek to hedge against
weaker currencies and the threat of rising consumer prices. Holdings in gold-
backed exchange-traded products expanded to an all-time high and Bank of
America Corp. and Deutsche Bank AG are among banks forecasting that the price
will rally to a record. The metal climbed 4.8 percent in August, the most
since January.
“The slowdown was
mainly seasonal and because the jump in prices in the latter part of the
month put off buyers,” said Liu Xu, analyst
at Capital Futures Co.
Shipments more than tripled
to 512,136.5 kilograms in the first eight months from 146,750 kilograms a
year earlier, Bloomberg calculations show. China doesn’t publish such
data.
“China’s demand
for the metal may increase over the rest of the year as central banks in the
U.S., Europe and Japan have, more or less, demonstrated their penchant for
the monetary easing,” said Liu. Gold for immediate delivery was little
changed at $1,762.35 an ounce at 7:13 p.m. in Singapore.
Exports of gold to Hong Kong
from China were 26,497 kilograms in August, down from 30,038 kilograms in
July, according to a separate statistics department statement. The exports
were more than the 7,118 kilograms a year ago. They were 200,391.5 kilograms
in the first eight months from 61,541 kilograms a year earlier, according to
Bloomberg calculations.
(Bloomberg) -- South African
Miners Trapped in Web of Debt, Watchdog Says
South African miners were the victims of predatory lending that eroded their
earnings in the run-up to violent strikes in recent months, the
country’s credit watchdog said.
Seven out of eight credit
providers raided at the Marikana mining complex,
where a strike began in August, appear to have been acting unlawfully, said Zweli Zakwe, head of
investigations at the National Credit Regulator.
“Our impression is
that the credit providers have not done affordability assessments, so miners
are trapped in an extensive web of debt,” Zakwe
said in a phone interview today from Buffelspoort,
west of Johannesburg. “The primary purpose of the raids is to look at
three main issues: the cost of credit, affordability assessments and the
unlawful retention of bank cards and identity documents.”
The first illegal strike
began at Lonmin Plc’s
Marikana operations on Aug. 10 and labor action has
spread to other platinum and gold mines. As many as 46 people died before Lonmin agreed to wage increases of up to 22 percent.
With more than 16 credit
providers operating in Marikana, many miners took
on loans with interest charges of as much as 30 percent that they struggled
to repay, resulting in the lenders making deductions directly from
miners’ salaries, according to the regulator.
Reckless Lending
“Definitely the debt was on their shoulders, and it’s one of the
elements that may have led to the strikes,” Zakwe
said. “For now we are focusing on the small micro-lenders, but we will
expand and we have been looking at the Capitecs and
African Banks of this world. There are retailers as well.”
The National Credit Act,
introduced in 2006, aimed to reduce so-called reckless lending and protect
borrowers. In the past three years credit providers have increasingly offered
unsecured loans to low-income earners to maintain and boost profit margins.
Interest charges on these loans can reach 60 percent, with Capitec Bank Holdings Ltd. offering customers
unsecured loans of as much as 230,000 rand ($26,000).
“Many have interest
charges of 30 percent,” Zakwe said of the
credit providers in Marikana.
(Bloomberg) -- China August
Exports of Gold to Hong Kong 26,497 Kilograms
Hong Kong government announced August gold imports data on its website today.
(Bloomberg) -- IShares Silver Trust Holdings Unchanged at 9,920 Metric
Tons
Silver holdings in the IShares Silver Trust, the
biggest exchange-traded fund backed by silver, were unchanged at 9,920.18
metric tons as of Oct. 9, according to figures on the company’s
website.
Oct. 9 Oct. 8 Oct. 5 Oct. 4
Oct. 3 Oct. 2
2012 2012 2012 2012 2012
2012
Million Ounces 318.941
318.941 318.941 318.941 318.941 318.941
Daily change 0 0 0 0 0
-610,059
Metric tons 9,920.18
9,920.18 9,920.18 9,920.18 9,920.18 9,920.18
Daily change 0.00 0.00 0.00
0.00 0.00 -18.98
(Bloomberg) -- ETF
Securities Gold ETP Inflows Were $260 Million in Week
ETF Securities Ltd.’s gold exchange- traded products had inflows of
$260 million last week, the company said in a report e-mailed today.
For breaking news and
commentary on financial markets and gold, follow us on Twitter.
NEWS
Gold Gains as Investor Demand Increases ETP Holdings
to Record - Bloomberg
Gold futures rise as dollar pulls back
– Market Watch
Gold flat, but on course for biggest weekly loss in
two months - Reuters
Gold Best of Biggest ETFs as Traders Seek Haven:
Riskless Return - Bloomberg
COMMENTARY
IMF Fears 'Credit Shock' in Spain If Rajoy Blocks Rescue – The Telegraph
UBS' Cashin Offers A Huge
Lesson On Weimar Hyperinflation, And The Roots Of Today's Crisis
– Business Insider
The Case For A 40% Drop In The Markets
– Market Watch
Gold Short Squeeze ... May Lead To "Move In Gold
That Will Leave Breathless” – King World News
Did COMEX Gold Futures 'Glitch' Hint At The Future
Awaiting Us? – Zero Hedge
Video: Global Debasement to Boost Gold Prices
– Bloomberg
The Currency Collapse That’s Happening Right
Now – Uncommon Wisdom
Three of the World’s Four Richest Investors
Are Buying Gold – Financial Review
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