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Today’s
AM fix was USD 1,726.75, EUR 1,350.71, and GBP 1,085.05 per ounce.
Yesterday’s AM fix was USD 1,734.00, EUR 1,354.05, and GBP 1,089.06 per
ounce.
Silver is
trading at $33.07/oz, €25.94/oz and £20.84/oz. Platinum is trading at $1,576.50/oz, palladium at $633.80/oz and
rhodium at $1,050/oz.
Gold fell
$4.40 or 0.25% in New York yesterday and closed at $1,727.20. Silver hit a
daily low of $32.86, then recovered higher at the close and finished with a
gain of 0.12%.
Gold ETF VIX Index
Gold inched
lower on Wednesday despite Greece's lenders being unable to agree on a debt
deal, but support for bullion remains due to the very uncertain economic
backdrop and global central bank’s loose monetary policy stance.
The Japanese
yen has fallen again versus gold after Japan logged its 4th straight trade
deficit ($6.7 billion) in October leading to fears of another recession and
more money printing in Japan.
Japan’s
figures show its worst trade deficit for October in nearly 30 years, renewing
September’s record, with declining exports to China due to the
territorial dispute, and slower demand from debt-stricken Europe.
On Tuesday the
BOJ announced it has no plans for further stimulus measures, but experts
suppose that weak figures would force them to change their mind.
The BoJ’s bond buying bazooka now totals a staggering
¥91-trillion or $1.1 trillion.
Losses were
limited by continuous fighting in the Middle East which buoys safe haven
sentiment.
US Federal
Reserve Chairman Ben Bernanke said yesterday that the central bank does not
have the tools to offset damage caused by the fiscal cliff if the Congress
fails to reach a consensus.
European
finance ministers, the ECB and the IMF cannot agree on a bailout to make the
Greek’s public debt which is 189% of GDP down to 120%, and they will
convene again on Monday.
If Greece is
unable to be “put back together again” what faith will there be
in these creditors helping other Eurozone countries out of the deepening
recession?
The World Gold
Council reported that China's consumer physical gold demand increased 22% to
176.8 tonnes from Q2 to Q3.
The US
Congressional calendar days are running out and the looming fiscal cliff is
growing.
Cross Currency Table – (Bloomberg)
Gold
volatility as represented by the cost of options that protect against losses
in gold and silver has slumped to a record low, on the increasing belief that
slower economic growth will attract buyers and spur central bank actions that
accelerate inflation.
The Chicago
Board Options Exchange Gold ETF Volatility Index, which tracks the cost of
SPDR Gold Trust options, plunged 42% this year and last week reached 13.28,
the lowest in records starting in 2008.
The CBOE
Silver ETF Volatility Index, a measure of IShares
Silver Trust derivative prices, is down 50 percent in 2012 and touched 22.76
yesterday, the lowest in data going back 19 months.
The
calculation of the CBOE Gold ETF Volatility Index ('Gold VIX') is based on
the well-known CBOE VIX methodology applied to options on the GLD SPDR Trust.
This is a real-time market estimate of the expected 30 day volatility of the
gold ETF.
U.S. House
Minority Leader Nancy Pelosi said this week that any budget agreement to
avert the so-called fiscal cliff must raise rates on the highest earners. A
Nov. 15 report showed the euro-area economy entered recession in the third
quarter, while violence erupted between Israel and Palestinian groups.
‘Substantial
Threat’
Failure to
avoid the so-called fiscal cliff would pose a “substantial
threat” to the economic recovery, Federal Reserve Chairman Ben S.
Bernanke said yesterday. Bernanke didn’t explicitly address what the
Fed might do after the December expiration of Operation Twist, in which the
central bank is purchasing about $45 billion a month of longer-term Treasury
securities as it replaces the same amount of short-term debt on its balance
sheet.
U.S. gross
domestic product would contract by as much as 0.5 percent next year if
lawmakers fail to reach a compromise on $607 billion of automatic tax
increases and spending cuts, the Congressional Budget Office has said.
The Fed said
on Sept. 13 it would buy mortgage-backed securities, adding to the $2.3
trillion of stimulus that the central bank committed to spur growth. The week
before, the European Central Bank announced plans to buy an unlimited amount
of bonds of the most indebted nations in the region to suppress borrowing
costs. The Bank of Japan raised its asset-purchase program for the second
time in two months on Oct. 30.
Gold Prices/Fixes/Rates/Vols –
(Bloomberg)
Gold VIX
The gold VIX
slid 0.7% to 13.52 yesterday, as the volatility gauge for silver decreased
4.7% to 22.76. The VIX lost 1.1 percent to 15.08, a one-month low.
Europe’s VStoxx Index, a measure of Euro Stoxx 50 Index option prices, added
0.1 percent to 18.79 at 9:34 a.m. in Frankfurt today.
The ratio of
outstanding calls to buy the silver fund versus puts to sell rose to
2.32-to-1 on Nov. 16, data compiled by Bloomberg show. That was the highest
level since March 2009. Nine of the 10 most-owned options on the fund were
bullish. January $36 calls, with an exercise price 12 percent above
yesterday’s close, along with January $40 calls and January $50 calls
had most contracts.
For the gold
fund, there are almost twice as many calls as puts, with 2.27 million bullish
options outstanding and 1.14 million bearish contracts at the end of last
week, the data show. All nine most-owned options were bullish, with December
$170 calls, betting on a 1.6 percent increase, and December $190 calls having
the largest open interest, data compiled by Bloomberg show.
“Investors
may be rolling their bets in anticipation of additional monetary easing by
central banks,” Max Breier, a senior
volatility trader at BMO Capital Markets Corp. in New York, said in a Nov. 16
interview. “Operation Twist will be ending soon and there is
speculation that the Fed will announce a new program to buy U.S. Treasuries.
“
“The fun
never ends” Breier told Bloomberg.
The
‘fun’ in the gold and silver markets is only beginning and
investors and savers need to have allocations to both precious metals as
financial insurance against significant geopolitical, macroeconomic, systemic
and monetary risk.
Low volatility
likely represents the calm before the coming storm in the precious metals
which should lead to further price gains in 2013.
Currency Ranked Returns – (Bloomberg)
NEWSWIRE
(Bloomberg) -- Austrian Mint’s Gold Sales Through Bars, Coins
Retreat in 2012
Muenze Oesterreich AG,
the Austrian mint that makes Philharmonic coins, said gold sales retreated
this year.
The mint sold
836,000 ounces of gold coins and bars through October, after
selling 1.68 million ounces in all of 2011, Marketing and Sales Director
Andrea Lang said in an e-mail Nov. 16. Silver coin sales were 7.59 million
ounces, down from 2011’s total of 17.87 million ounces. The turnover is
still about four times more than before the global economic crisis that
started in 2008, she said.
The decline
mirrors a slowdown in global bar and coin demand this year as estimated by
the World Gold Council. While prices are 9.8 percent below the record set in
September 2011, the metal is heading for a 12th straight annual gain as
central banks from Europe to China pledge more steps to boost growth.
Analysts surveyed by Bloomberg expect prices to rise every quarter next year
to the highest ever.
“We
expect quite good business for the next couple of months, because we have the
same reasons for buying gold as a year ago,” Lang said in the e-mail.
“Global stimulus forecasts and negative real interest rates are helping
gold, as well as the fact that it is seen as a safe haven.”
Bullion for
immediate delivery traded at $1,733.78 an ounce by 10:49 a.m. in London and
is up 11 percent this year. Holdings in gold-backed exchange-traded products
climbed to a record 2,604.2 metric tons yesterday, data compiled by Bloomberg
show.
Stimulus
Measures
The Federal
Reserve said Oct. 24 it will maintain $40 billion in monthly purchases of
mortgage debt and probably hold interest rates near zero until mid-2015. The
European Central Bank said it’s ready to buy bonds of indebted nations
and the Bank of Japan raised its asset-purchase program for the second time
in two months on Oct. 30.
Bullion will
average $1,925 an ounce in the final three months of next year, according to
the median of 16 analyst estimates compiled by Bloomberg. It reached a record
$1,921.15 in September 2011 and averaged $1,665 this year, the most ever.
The Vienna-based
mint traces its origin back to 1194, when King Richard I of England paid a
15-ton silver ransom to Duke Leopold VI, who used the payment to mint coins.
It now sells products including 1-gram gold bars and 1-ounce gold and silver
Philharmonics.
Global gold
bar and coin demand slipped 30 percent to 293.9 tons in the third quarter
from a record a year earlier, the London-based World Gold Council said Nov.
15. Demand for the products totaled 941.6 tons through September this year,
19 percent below the same period in 2011.
The U.S. Mint
sold 57,500 ounces of American Eagle gold coins so far this month, data on
its website show. While that compares with 59,000 ounces for the whole of
October, sales this year of 598,000 ounces are down 36 percent from the same
period in 2011. The mint sold 31.2 million ounces of silver American Eagles
this year, compared with 37.9 million ounces through November last year, the
data show.
Silver for
immediate delivery climbed 19 percent this year in London to $33.145 an
ounce. It’s the best performing precious metal in 2012.
(Bloomberg) --
Silver Imports by China Were 245 Tons in October, Customs Says
Silver imports by China were 245 metric tons in October, according to data
released by the customs agency today.
That compares
with 257 tons in September. October platinum imports were 4.79 tons and
October palladium imports were 1.06 tons, data showed.
(Bloomberg) --
Silver Industrial Demand to Rise 6% to Record in 2014: Institute
Silver Institute report published on its website yesterday produced by
Thomson Reuters GFMS.
“A
steadily improving economic outlook, strong growth in the automobile sector,
and a recovery in the housing and construction industry are primary reasons
for the forecasted uptick in demand,” it said.
Industrial demand
will account for an est. 57% of total silver fabrication in 2014.
(Bloomberg) --
U.S. Mint Gold-Coin Sales in November Exceed October Total
Nov. sales have climbed to 63,000 oz from 59,000
for all of Oct., data on the U.S. Mint website showed today.
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