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Gold is
trading at USD 1,746.90, EUR 1,295.30, GBP 1,111.10, CHF 1,589, JPY 135,700
and AUD 1,706.4 per ounce.
Gold’s
London AM fix this morning was USD 1,750.00, GBP 1,113.02, and EUR 1,298.03
per ounce.
Yesterday's
AM fix was USD 1,704.00, GBP 1,095.61, and EUR 1,282.46 per ounce.
Cross
Currency Rates
Gold is
marginally higher today in dollars after yesterday’s nearly 2% gain.
Yesterdays’ PM fix was not the same as the AM fix after the central
bank intervention saw gold surge nearly 2%. The highly coincidental exact AM
and PM fixes for 2 consecutive days may have been an unusual anomaly.
Gold is at
a 2-week high today as inflation concerns saw gold rise sharply after the
Federal Reserve and the world’s major central banks took coordinated
action to prevent the euro-zone debt crisis from igniting a global financial
meltdown.
Gold
in November in USD – 30 Days (Tick)
The U.S.
Federal Reserve, the European Central Bank and the central banks of Canada,
Britain, Japan and Switzerland said they would lower the cost of existing
dollar swap lines by 50 basis points from next Monday (December 5) and
arrange bilateral swaps to provide liquidity for other currencies.
It was a
desperate move to prevent what BOE Governor, King, this
morning called a ‘systemic crisis’.
China’s
central bank cut reserve requirements for commercial lenders yesterday for
the first time in three years, in order to ease liquidity issues in the
Chinese financial system.
The joint
action by the world's major central banks to boost dollar liquidity and
provide cheap dollar funding to European banks facing a ‘Lehman
moment’ spurred ‘risk on’ rallies in commodities and
equities.
Equity
indices in the EU, US and Asia surged after the measures but already
nervousness has crept back in and the CAC and DAX are lower this morning.
The
dawning realization that money markets were very close to complete collapse
will likely lead to increased risk aversion again and continuing safe haven
demand for gold.
The
coordinated central bank action will result in a further increase in the
global money supply and the consequent debasement of fiat and electronic
currencies and inevitable devaluation of the dollar and all major currencies.
Volatile November Sees Gold
Protect Again
Despite November being an extremely volatile
month which saw sharp losses in many bond markets and all major equity
indices internationally, gold was higher in all major currencies in November.
Gold
in November in GBP – 30 Days (Tick)
Gold ended
November with a 1.9% gain in US dollar terms, the seventh month of the dollar
falling against gold so far this year.
The euro
fell 5% against gold in November. The British pound fell nearly 4% against
gold.
The Aussie
dollar fell nearly 6.5% and the South African rand by 5%.
Thus, gold
again protected investors and savers internationally from the global
financial crisis.
Gold
in November in EUR – 30 Days (Tick)
Gold is
now more than 20% higher in dollars and 18% higher in euros and pounds in
2011.
It is only
9% below the record nominal high of $1,920/oz
reached in September and given the degree of systemic and monetary risk in
the world this price level will likely again be reached by early 2012.
Global Allocations to Gold
Remain Miniscule
Global ETF holdings of gold topped 70 million oz for a second day in a row, marking not only a new
record high, but meaning that ETF holdings of gold are double those held by
the Chinese central bank and are just a few metric tonnes
behind those of France, the world's 5th largest official holder of bullion
(2,435T).
The risk
that ETF gold holdings could be sold resulting in a lower gold prices is over
stated.
While the
figures sound large in tonnage terms, in dollar terms they are very small
– especially when compared to the size of global equity, bond and
foreign exchange markets.
The very limited
supply and rarity of gold means that the increase in allocations to gold from
miniscule levels is sustainable and will likely continue for many years given
the radically changed nature of the global financial and economic landscape.
Demand has
increased in recent months and years but is increasing from a tiny base.
HSBC
estimated in December 2010 that gold remains less than 0.14% of global
investable assets.
Therefore,
most analysts involved in the gold markets believe that this is not a short
term blip rather we are seeing a sustainable trend and investment and
monetary demand is set to remain very robust in the coming years.
For
breaking news and commentary on financial markets and gold, follow us on Twitter.
SILVER
Silver is trading at $33.15/oz,
€24.57/oz and £21.08/oz
PLATINUM GROUP METALS
Platinum is trading at $1,554.25/oz, palladium at
$619.50/oz and rhodium at $1,575/oz.
NEWS
(Reuters)
Gold hits 2-week high
on gains in equities, euro
(Bloomberg)
SPDR Gold Trust
Holdings Increase 1.21 Metric Tons
(TheStreet.com)
Gold Prices Soar as
Central Bank Actions Pummel U.S. Dollar
(Bloomberg)
Billionaire
Prokhorov Touts Gold For Perplexing Times
COMMENTARY
(MarketWatch)
Gold likely to be
higher at year’s end
(ZeroHedge)
Of Imminent
Defaults And Self Deception. Kyle Bass Prepares For The Worst
(ZeroHedge)
"China Will
Not Hesitate To Protect Iran Even With A Third World War"
(SeekingAlpha)
Currency Wars: Euro
Descending But What Of Gold?
(Yahoo Finance)
Ron Paul Comments
on Fed Actions in Europe
(Bloomberg)
Safe Havens for
Billionaires: Treasuries 30%, Art 30%, Gold 20%, Other 10%
Mark
O’Byrne
Goldcore
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