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ON THE FINAL day before Christmas, gold prices edged higher
Monday morning, climbing to $1665 per ounce and recovering some of the ground
lost last week.
Friday afternoon's London gold fix was $1651.50 an
ounce, a 2.6% weekly fall and the biggest weekly drop since June.
"[Gold's fall] opens up a move to the next
major support, which are the lows in the
$1520s," says Friday's technical analysis note from Scotiabank.
On the physical bullion market, gold demand from
traditional world number one India picked up Monday, dealers reported.
"Demand is good," one dealer at a
state-run bank in Mumbai told newswire Reuters earlier today.
"Buyers are placing orders for limited stocks
with banks. They know the supply situation will remain tight for the next few
days. Overseas suppliers are going on leave."
Silver meantime rallied to $30.39 an ounce before
easing slightly, like gold regaining a little of the
Stocks and commodities were broadly flat Monday
morning, while the Euro gained against the Dollar but remained below last
week's seven-month high.
In New York, the so-called speculative net long
position of gold futures and options traders – the difference between
bullish and bearish contracts held – fell to its lowest level since
August in the week ended last Tuesday, weekly data published by the Commodity
Futures Trading Commission show.
Elsewhere in the US, politicians negotiating over
how to deal with the government's deficit have left Washington for Christmas
without any deal being agreed. The US economy is due to hit the so-called
fiscal cliff of around $600 billion of spending cuts and tax cut expiries,
starting next Monday, if Congress does not agree new legislation.
Here in Europe, current Italian prime minister Mario
Monti said Saturday that he will not run in
February's parliamentary elections. He added however that he would consider
being prime minister if nominated to the post by an elected coalition that
would back what he called "the Monti
agenda" of economic reforms.
"While he may not have thrown his hat into the
ring," says Nicholas Spiro, managing director at consultancy Spiro
Sovereign Strategy, "Il Professore has become
Il Politico whether he likes it or not...[Monti]
has made it crystal clear where his political allegiances lie and that he's
ready to head
Italy's next government."
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