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Gold’s London AM fix this morning was USD
1,694.00, EUR 1,266.54, and GBP 1,059.55 per ounce. Yesterday's AM fix was
USD 1,658.00, EUR 1,255.02 and GBP 1,047.91 per ounce.
Silver is trading at $33.07/oz,
€24.77/oz and £20.72/oz. Platinum is
trading at $1,656.75/oz, palladium at $660./oz and rhodium at $1,425/oz.
Gold rose 1.76% in New York yesterday and closed at
$1,693.47/oz. Gold traded sideways during Asian trading and then buying in
Europe drove it to over $1,696/oz.
Cross Currency Table – (Bloomberg)
Gold is targeting $1,700/oz
after yesterday’s Bernanke QE hints and today’s urging by the
OECD to boost the Eurozone ‘firewall’ by another $1.3 trillion.
Gold is consolidating on yesterday’s gains today
above the 200 day moving average (simple) at $1,687/oz
after yesterday’s biggest daily gain since January. The gains came
after Ben Bernanke warned of the risks to the fragile US economic recovery
and signalled the Fed would keep interest rates low
and further debase the dollar – boosting gold’s inflation hedging
appeal.
Gold is also likely being supported by the OECD’s
warning that the debt crisis is far from over. The OECD said today that the
euro zone's public debt crisis is not over despite calmer financial markets
this year and warned that Europe's banks remain weak, fiscal targets are far
from assured and debt levels are still rising.
The OECD said that the eurozone
needs to boost crisis ‘firewalls’ to at least $1.3 trillion. Gold
likes the ‘trillion’ word and talk of ‘trillions’ and
will be supported by the risk of the creation of trillions of more euros,
pounds and dollars in the coming months.
 
Gold 1 Year Chart – (Bloomberg)
Bernanke confirmed what we and more bearish analysts
have been saying for some time - that the US’s rate and nature of
unemployment continues to hinder any real growth in the world’s largest
economy and the labour markets are worrisome
compared to prior recessions.
Although the employment rate appears to be shrinking
the labour participation rate (number of job
seekers) has dropped off. The reason is that people are remaining out of work
longer - 40% of people out of work for greater than six months, while only
25% in previous downturns. The longer workers remain out of the labour force, there is an increased probability that the
housing sector will continue to drag– adding to a stagnant economy.
Bernanke said ultra loose
monetary policy was still needed and he again hinted another round of QE
including asset purchases. This is almost inevitable despite the recent
suggestion by Bernanke that it is not.
Monday's rally was the reverse of what gold experienced
on February 29, when the metal posted its biggest one-day drop in more than 3
years after Bernanke suggested that there would be no further bond buying and
QE.
Bernanke is bluffing which is bullish for gold and
means that gold’s recent correction may be soon to come to a close
– especially as the fundamentals remain as compelling as ever.
India’s Financial and Cultural Affinity and Love
Affair With Gold
Analysts continue to evaluate the impact of the Indian
gold jewellers strike.
Indian jewellers are on
strike to protest against a government levy on gold and the strike is
entering its 11th day in most parts of India. It has brought gold imports to
a near standstill from the world's biggest buyer of bullion in the peak
wedding season.
The Indian government for the second time in 2012
doubled the import tax on gold coins and bars to 4% along with an excise duty
of 0.3 percent on unbranded jewellery.
A Reuters poll of analysts shows the belief that
India's gold import duty increase may cut gold imports by as much as a third
in 2012 to their lowest level in two years, allowing China to overtake it and
become the world's biggest buyer of bullion.
However, many analysts wrongly asserted that Indian
demand was not sustainable at $1,000/oz and said
Indian demand would fall one prices rose above $1,000/oz
in 2009. They badly underestimated the Indian propensity to save in gold as a
store of value over their fiat rupee in Indian banks and mattresses.
Already there is speculation that while official demand
figures may fall there may again be a sharp increase in smuggling of gold
into India from neighbouring Asian countries and
from Dubai and the Middle East.
India’s financial and cultural affinity and love
affair with gold will not end due to government taxes and they will continue
to prudently buy the dips.
XAU/EUR 1 Year Chart – (Bloomberg)
OTHER NEWS
(Bloomberg) -- COMMODITIES DAYBOOK: Gold Rises on
Bernanke Policy Statement
Gold futures rose the most in four weeks after
Federal Reserve Chairman Ben S. Bernanke said accommodative monetary policy
is still needed to bolster the U.S. labor market.
(Bloomberg) -- Gold May Re-Test $1,550 in Second
Quarter, Deutsche Bank Says
Gold may fall to as low as $1,550 an ounce in the second quarter before
resuming its long-term gains, Deutsche Bank AG said in an e-mailed report
today.
(Bloomberg) -- Jewelers in India Extend Strike to 11th
Day to Protest Taxes
Jewelers in India, the world’s biggest buyer of gold, extended a
nationwide strike demanding the withdrawal of a tax on non-branded jewelry to
11th day, a trade group said.
“We are expecting a positive decision from the
government in the next 48 hours,” Bachhraj Bamalwa, chairman of the All India Gems & Jewellery Trade Federation, said in a phone interview
today.
The federation also wants the government to reduce the
import duty on gold and abolish the 1 percent tax on cash purchases of gold
in excess of 200,000 rupees, Bamalwa said.
(Bloomberg) -- Crude Oil Gains After Bernanke Calls for
Looser Monetary Policy
Oil advanced for a second day in New York after Federal Reserve Chairman Ben
S. Bernanke said accommodative monetary policy is needed to lower
unemployment, making commodities a more attractive investment. Futures rose
16 cents after Bernanke said further improvement in the job market will
require keeping the central bank’s interest rates low. Oil dropped
earlier on concern that Europe’s debt crisis will slow growth. Trading
volume was near the lowest level of the year.
For breaking news and commentary on financial markets
and gold, follow us on Twitter.
NEWS
(Reuters)
Gold eases after rally; Bernanke boosts sentiment
(Bloomberg)
Dollar Trades Near Lowest This Month Against Euro on
Fed Stimulus Talk
(The Australian)
Gold may crack $US2000 price on demand in China,
India
(MarketWatch)
AngloGold CEO: Gold could top $2,000/oz. this year
COMMENTARY
(Zero Hedge)
Video- On The Price Of Gold
(King World News)
Embry - Massive QE Near as System Moves Closer to
Collapse
(Perth Mint Bullion)
Fake Bars - The Facts
(Zero Hedge)
"We Have Entered The Most Favourable
Era For Gold Prices In Our Lifetime”
(GoldSeek)
Ron Paul: A Fistful of Euros
(YouTube)
CBS: Global Bank Network – SWIFT - Ready to
Cut Iran
Mark
O’Byrne
Goldcore
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