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THE
SPOT gold price hovered
above $1660 per ounce Wednesday morning in London, slightly up on the week so
far, before dropping through that level ahead of US trading.
"[Gold] continues to consolidate last week's
down move from $1694 to $1627," says the latest technical analysis from
bullion bank Scotiabank.
"Our bias remains lower with $1627 our next
line in the sand."
Gold buying in India meantime slowed Wednesday, dealers
report.
"The market has slowed as everyone is waiting
for [a price] correction," says Ketan Shroff, director at wholesaler Penta
Gold in Mumbai.
A day earlier, premiums on gold imported by India
hit a two-month high Tuesday, with bullion importing-dealers citing strong
demand ahead of a possible import duty hike as well as supply constraints
caused by reduced refining capacity over Christmas.
Societe Generale meantime became the latest bank to lower its
2013 average gold price forecast Tuesday. SocGen
analysts now say they expect gold to average $1700 an ounce this year, down
from the previous forecast of $1800.
Silver is forecast to average $31 an ounce, compared
to the previous forecast of $34 an ounce.
"The very poor price action of gold recently
and lack of bullish triggers leads us to moderate our expectations for gold
and silver prices," says a note from SocGen.
"We remain moderately bullish, and are looking
for a similar trajectory to our gold and silver forecasts, albeit at lower
levels."
"Monetary policy accommodation continues to
paint a supportive backdrop for higher gold prices up ahead," adds a
note from UBS.
"We do not think that there has been any
material change in the macro environment to warrant a change in the
underlying bullish gold view... the reality is that the Fed's balance sheet
is still expected to continue expanding for some time."
Stock markets opened higher this morning before
easing back, while US Treasuries ended this morning flat on the day, with
most commodities were also little changed.
Silver meantime failed to hold above $30.50 an
ounce, despite news of strong coin sales and exchange traded funds demand.
So far this month, the US Mint has sold nearly 4.3
million ounces of silver bullion American Eagle coins, which it produces
specifically for investment purposes and sells to primary dealers. This
compares to 6.1 million ounces sold in the whole of January 2012.
The world's largest silver ETF meantime,
the iShares Silver Trust (SLV), saw its holdings
rise to 10,112 tonnes this week, their highest
level since 23 May 2011.
"The low silver prices are clearly being seen
as an attractive opportunity to buy," says this morning's commodities note
from Commerzbank, adding that overall silverETF
holdings hit a record 18,990 tonnes yesterday.
The United States will import less oil next year than at
any time since 1987, thanks to adomestic supply
boost from hydraulic fracturing as well as slower demand growth, according to
projections from the US Energy Information Administration published Tuesday.
Elsewhere in the US, economists are debating whether the
government should consider minting a $1 trillion platinum coin as a way of
continuing to borrow should Congress refuse to raise the $16.4 trillion
federal debt ceiling.
"By minting a $1 trillion coin, then depositing it
at the Fed, the Treasury could acquire enough cash to sidestep the debt
ceiling — while doing no economic harm at all," wrote Nobel
Prize-winning economist Paul Krugman in his New York Times column this
week.
"So why not?"
"Wasn't that the plot of a Simpsons episode?"
asked Michael Steel, spokesman for Republican speaker of the House of
Representatives John Boehner, when asked about the proposal last week.
"There's no magic coin to duck the tough choices
our nation faces," Steel added, "and the only way to stop spending
money we don't have is to stop spending money we don't have."
The US Treasury said last month the
government on December 31, and has introduced extraordinary measures designed
to keep debt below the threshold until February.
Over in Europe, the Eurozone remained in recession for
the final three months of 2012, according to GDP data published this morning.
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