Gold is trading at USD 1,599.20, EUR 1,222.20, GBP
1,028.30, CHF 1,498.40, JPY 124,340 and AUD 1,595.0 per ounce.
Gold’s London AM fix this morning was 1,589.50,
GBP 1,022.84, and EUR 1,218.94 per ounce.
Yesterday's AM fix was USD 1,590.00, GBP 1,026.54 and
EUR 1,223.64 per ounce.
Gold in USD – 5 Yr (150,
200, 250 DMA)
Gold is 1.6% higher in dollars and higher in most major
currencies after four sessions of heavy losses and a 7% loss this week
– the biggest weekly loss since September. Liquidity squeezed
speculators and banks have been closing long positions and selling gold this
week but global physical demand remains robust.
The Relative Strength Index (RSI) on spot gold returned
to above 30, after spending 2 days below that mark in oversold territory two
days ago. It is the first time that this has happened since September 2008 in
the aftermath of the Lehman Brothers sell off.
Demand for physical gold from investors, store of
wealth buyers and central banks accelerated this quarter at the fastest pace
in more than a year as Europe’s debt crisis deepened and contagion loomed.
We have experienced record demand in recent weeks and this week demand has
been particularly strong in the European Union according to fellow bullion
dealers in the UK and on the continent.
European demand is increasing, although from still very
low levels, due to real concerns about the euro and currency devaluations and
concerns about the solvency of banks and nations.
Bullion buying in much of Asia has picked up also. Reuters reports that there has been a jump in buying in
most Asian countries and that demand for gold in India, still the world's top
buyer, rose slightly for the first time in almost a week on Friday.
Bullion dealers in India told Reuters that the price
drop “enthused buyers.”
"We saw huge physical demand from Thailand and
Indonesia," a Singapore based dealer told Reuters. Gold bar premiums
were steady at $1.00 an ounce over spot prices in Singapore. Prices may edge
up next week as supply reduces around Christmas holidays according to a
Opinion has been divided about the outlook for gold.
Most analysts of the gold market remain positive about the outlook for gold
in the medium and long term. Some are cautiously suggesting that the worst of
the sell off may be over as gold looks very
oversold technically and the fundamentals remain sound.
Cross Currency Table
Bearish sentiment in the gold market is very high which
may be indicative of a market bottom.
Some economists continue to confuse gold’s
frequent short term correlation with risk assets with its proven hedging and
safe haven properties in the long term.
Nouriel Roubini has declined
to elaborate and clarify regarding his suggestions that gold is a bubble. Roubini Global Economics has said that the breach of
gold’s 200 day moving average is “signaling that prices may drop
to US $1400/oz.”
Denis Gartman whose
pronouncements of the death of the gold bull market were widely publicized
this week has said that he may buy gold soon if it falls sharply again. Gartman said 3 days ago that gold was poised to enter a
bear market and would hit $1,450/oz before it
A more nuanced view is that of UBS’ Chief
Investment Officer who said that “as we enter 2012”, gold no
longer retains “a safe haven status.”
However, “investment in bullion makes sense as a
protection against currency debasement and as negative real interest rates
reduce the opportunity cost of owning gold”, UBS CIO Alexander Friedman
of UBS said.
“Investors should not, however, buy gold
expecting it to act as a safe haven during severe, liquidity-driven market
sell- offs,” Friedman said.
This week’s washout in gold is
“overdone” according to respected UBS precious metals analyst Edel Tully. Edel said that
“we think gold at these levels” presents a “buying
Buyers with a long term view might be prudent to dollar
cost average into positions in the coming days and weeks.
The old adage to never “catch a falling
knife” is worth remembering and it is still too early to say that this
correction is over. A higher weekly close next week and weekly or monthly
close above the 200 day moving average at $1,620.60/oz
would likely see more speculative players come into the market again leading
to gold regaining its footing and the technicals
again aligning with the fundamentals.
(Bloomberg) -- Credit Suisse Says Gold Drop May ‘Bottom Out’
Gold may “bottom out” above $1,500 an ounce, Credit Suisse Group
AG said in a report e-mailed today. Selling may stall as “buying of
physical emerges in greater volume from both the Chinese market and emerging
market central banks,” the bank said.
(Bloomberg) -- Gold No Longer a Safe Haven, UBS Says in
CIO Monthly Letter
Gold is no longer a safe haven, UBS AG said in its monthly CIO letter.
“Going into 2011, most investors believed that safe havens included
gold, the Swiss franc, U.S. dollars, U.S. Treasuries, and Japanese government
bonds,” the bank wrote in the letter. “As we enter 2012, neither gold nor the Swiss franc retains a safe haven
(Bloomberg) -- Gartman May
Buy Gold If Prices ‘Cascade’ Below Yesterday’s Lows
Economist Dennis Gartman said gold may
“cascade” lower if prices drop below yesterday’s lows by
early next week. If that were to happen, Gartman
would “begin to look again at buying gold,” he said today in his
daily Gartman Letter. He sold the last of his gold
earlier this week.
(Bloomberg) -- China’s ICBC Says It Joins London
Bullion Market Association
The Industrial and Commercial Bank of China Ltd., the world’s largest
bank by market value, has joined the London Bullion Market Association as a
full member, as the country’s imports of the precious metal gained to a
The Beijing-based bank will use the opportunity to
forge itself into a global precious metal investment and management bank,
according to an e-mailed statement from the lender. The LBMA is the
London-based trade association that represents the wholesale over-the-counter
market for gold and silver in London. China is the world’s largest gold
China’s bullion demand may be more than 750 tons
this year, as the country overtook India in the third quarter as the
world’s largest gold jewelry market, Albert Cheng, managing director
for the World Gold Council’s Far East region at the Council, said on
Nov. 17. Gold imports from Hong Kong surged 51 percent to a record in October
as investors sought to hedge against turmoil in the financial markets.
“ICBC’s becoming a member of LBMA will help
the two markets -- China and overseas -- become more related in the long
term,” Jin Shuguang, analyst at Nanhua Futures Co., said by phone from Hangzhou today.
By selling more than 40 tons of gold in the first 10
months, ICBC became the largest retailer in China by volume, Cheng Binghai, chairman of the Shanghai Gold & Jewelry
Trade Association, said in Shanghai on Dec. 1.
Gold is rallying for an 11th year, gaining 12 percent,
as investors seek to protect their wealth from declining equities,
depreciating currencies and the threat of inflation. Bullion for
immediate-delivery in London climbed for the first time in five days to
$1,590.15 an ounce, down 17 percent from the record $1,921.15 on Sept. 6th.
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Silver is trading at $29.60/oz,
€22.64/oz and £19.03/oz
PLATINUM GROUP METALS
Platinum is trading at $1,422.75/oz, palladium at
$620.50/oz and rhodium at $1,425oz.
Gold rebounds, headed for weakest week in 3 months
Gold futures edge higher after losses
Gold Rout Thins the Herd of Bulls: Poll
(San Francisco Chronicle)
Europe to Face Run on Banks in Coming Months, Kyle
U.K. Suing ECB - May Face Derivatives-Law Setback in
The Tradition of the Krugerrand
(The Big Picture)
The End Of The Gold Bull Market?
$1 Million Gold Bet Draws No Takers
(King World News)
Richard Russell - Gold Trading Above $1,500 is
John Hathaway - Media & Gartman
Attacks on Gold are Bullish
What Gold Supply Crunch?
Is This The End of the Gold Bull Market? No