Gold’s London AM fix this morning was USD
1,674.75, EUR 1,254.03, and GBP 1,044.17 per ounce. Yesterday's AM fix was
USD 1,664.00, EUR 1,246.16 and GBP 1,037.54 per ounce.
Silver is trading at $32.95/oz,
€24.70/oz and £20.58/oz. Platinum is
trading at $1,657.25/oz, palladium at $655/oz and rhodium at $1,350/oz.
Cross Currency Table – (Bloomberg)
Gold rose $8.80 or 0.53% in New York yesterday and
closed at $1,677.00/oz. Gold traded sideways to slightly higher in Asia but
has fallen in European trading to $1,674/oz.
Markets may get direction from clues regarding the
outlook for the U.S. economy and hints regarding monetary policy from the
minutes of the last U.S. Federal Reserve policy meeting.
Fed officials on Monday signalled
little appetite for further monetary steps to stimulate U.S. growth. However
with the US recovery fragile, monetary policy is set to remain extremely
loose and negative interest rates will continue for the foreseeable future
bolstering gold.
Physical demand remains lack lustre
with markets in China closed for a public holiday (reopening Thursday) and
with the demand drop from the Indian jewellery
strike.
Gold’s price resilience is impressive with the
global number one and two purchasers of the yellow metal not contributing to
global demand in recent days.
Gold Coins (US Mint) In Q1 2012 Show "No Hysteria
and No Bubble"
Dr. Constantin Gurdgiev, a non Executive
member of the GoldCore Investment Committee, has
again analysed the data of US Mint coin sales in Q1
2012 and has looked at the data in their important historical context going
back to 1987.
He finds that the data regarding gold coin sales in Q1
2012 confirms that there is “no hysteria and no bubble here”.
Dr Gurdgiev finds that while
volume of sales in Q1 2012 fell from the quite high levels seen Q1 2009, 2010
and 2011, demand was much stronger than “in the pre-crisis average for
2000-2007.”
Also of note is the fact that despite the worst
financial and economic crisis the modern world has ever seen being
experienced since 2008 demand has remained below the record levels seen in
the aftermath of the Asian debt crisis and unfounded Y2K concerns.
Interestingly, Dr Gurdgiev finds that the historic data (since 1987) shows
that the "gold price has virtually nothing to do with demand for US Mint
coins - in terms of volume of gold sold via coins."
He finds that the demand for gold coins has little to
do with the price in general and that “something other than price
movements drives demand for coins”.
This is something we have long asserted. Gold coin
buyers are some of the least speculative participants in the market. They are
safe haven and store of wealth buyers who are not guided by price and by
making money.
Their motivation is one of financial insurance and of
getting a “return of capital rather than return on capital.”
Dr Gurdgiev concludes that
“in recent months demand for gold has been oscillating around the
historic trend (as opposed to resting above that trend in August 2008-August
2011 period) is the good news - the current levels of demand are historically
sustainable, trend reversion-consistent and show neither hype, nor panic
buying.”
This is further evidence that there are little signs of
“irrational exuberance” or speculative fervour
in the gold market. It debunks the popular perception of a “gold
rush” with the “man in the street” or retail investor
“piling into gold.”
Nothing could be further from the truth and gold and
particularly gold bullion remains owned by a tiny minority of people who are
more aware of monetary and systemic risk than the broader public.
Click to read full research and charts from Dr Gurdgiev at True Economics Blogspot.
OTHER NEWS
(Bloomberg) -- Morgan Stanley Bullish on Gold, Crops,
Sees Drop for Crude Oil
Morgan Stanley said it remains bullish on the outlook
for gold, corn and soybeans, while the bank sees a risk for further declines
in crude oil.
Gold will continue to benefit from investors seeking a
haven, especially with low interest rates, the bank said today in an e-mailed
report. Prices probably will average $1,825 an ounce this year and $2,175 in
2013, the bank said.
Tight supplies of corn before the U.S. harvest will
boost prices at least through the early first half of this year, Morgan
Stanley said. Corn may average $6.60 a bushel this year, the bank said.
Brent crude oil may average $105 a barrel this year,
and may drop as low as $85, Morgan Stanley said.
(Bloomberg) -- Jewelers in India Extend Strike for 18th
Day Over Higher Taxes
Jewelers in India, the world’s biggest bullion
buyer, extended a strike for an 18th day demanding the withdrawal of a 1
percent excise duty on non- branded gold ornaments, an industry group said.
About 90 percent of stores across the country are
closed, Bachhraj Bamalwa,
chairman of the All India Gems & Jewellery
Trade Federation, said by phone today.
(Bloomberg) -- India to Set Rules on Gold Jewelry
Excise, Economic Times Says
India’s finance ministry will announce new rules
for the levy of excise duty on unbranded gold ornaments, the Economic Times
reported, citing a ministry official it didn’t identify.
A circular on the duty framework will be issued in a
few days to provide some relief to striking jewelers, the newspaper said,
citing the official.
Finance Minister Pranab
Mukherjee announced a 1 percent excise levy on unbranded jewelery
in the March 16 budget, triggering protest from retailers, the newspaper
said.
(Bloomberg) -- Turkey’s Gold Imports Were 2.91
Tons in March, Exchange Says
Turkey’s gold imports were 2.91 metric tons in
March, the Istanbul Gold Exchange said on its website. Silver imports were
20.9 tons last month, the data show.
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NEWS
Business Week
Gold May Extend Gain as U.S. Growth Offsets Weaker
India Demand
Reuters
Gold edges up on dollar weakness; policy cues eyed
Reuters
Europe stocks, Brent halt brisk rally
Wall Street Journal
Spain Faces Risks in Budget Refit
COMMENTARY
Casey Research
The Critical Number for Gold
Zero Hedge
Marc Faber: "I still recommend to hold
gold"
Bloomberg
Euro Was Flawed at Birth and Should Break Apart Now
Bloomberg
The Birth of U.S. Fiat Currency
King World News
Gold Bull Market Set Up for a Spectacular Move
Mark
O’Byrne
Goldcore
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