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Today's AM fix was USD 1,622.25, EUR 1,284.44, and GBP1,043.58 per ounce.
Yesterday’s AM fix was USD 1,619.00, EUR 1,289.83, and GBP 1,044.65 per
ounce.
Silver is trading at $28.80/oz,
€22.92/oz and £18.59/oz. Platinum is
trading at $1,498.70/oz, palladium at $633.52/oz and rhodium at $1,215/oz.
Gold edged up $5.50 or 0.34% yesterday in New York and
closed at $1,624.30/oz. Gold traded sideways in Asia and is remaining in a
narrow range holding above $1,620/oz in European
trading.
Gold climbed for its 6th session, its longest rally
since October, on news that the US recovery shows signs of faltering. Gold
has crept gradually higher again this week and appears to be consolidating on
the sharp gains seen on June 1st when gold surged after the poor jobs number
(see chart below).
Gold has rallied to a one week high as US jobless insurance
benefits surprised and rose by 6,000, consumer prices fell in May and the
current US account deficit grew in Q1 by its largest number in three years.
Gold is being aided by suggestions that the Fed will employ more QE thereby
further debasing the US dollar.
 
Gold Spot $/oz 20 days, 30
minutes – (Bloomberg)
The yellow metal will be supported by speculation that
central banks from major economies stand ready to take steps to stabilize
financial markets by providing liquidity and preventing a credit squeeze if
the outcome of Greek elections on Sunday causes tumultuous trading.
If severe market strains emerge after an unusual
confluence of three elections this weekend - there are important polls in
Egypt and France as well - central bankers are on standby to ensure enough
cash is flowing through the financial system and in an attempt to prevent
bank runs and major problems in the world’s financial system.
There has been increased demand for gold and silver
bullion in recent days and again today due to the high degree of risk
associated with Greek’s elections on Sunday which could lead to its
exit from the euro. If the leftist candidate is successful there are concerns
of serious dislocations in financial markets on Monday.
US Federal policy experts begin a 2 day meeting on June
19 to examine its monetary policy. The Fed, has said
that Greece’s departure from the euro would deepen the European debt
crisis and threaten economic expansion in the United States. In the 2 prior
rounds of QE from 2008-2011 the Fed bought a massive $2.3 trillion in bonds
to lower borrowing costs and in a vain attempt to stimulate growth.
The Bank of England and British government look set to
act together with new monetary policy measures worth some £100 billion
to tackle tightening credit and financial market conditions triggered by the
euro zone crisis.
The BOJ continues to maintain ultra
loose monetary policy and is holding rates at near 0%. Separately,
ex-Soros Japanese adviser Takeshi Fujimaki says
Japan may default within five years.
Japanese and international investors are slowly realising that the yen is no longer a “safe
haven” currency which has obvious positive ramification for gold.
$8 Trillion Official Sector Likes Gold - UBS Poll
Confirmation of how gold is regarded very favourably by the official sector has come from the
largest private gathering of central bank reserve managers, multi-lateral
institutions, and sovereign wealth funds in the world - UBS' 18th Annual
Reserve Management Seminar for Sovereign Institutions.
UBS' 18th Annual Reserve Management Seminar for
Sovereign Institutions Asset Poll
More than
80 institutions with collective assets under management of over $8 trillion
attended the event and were polled regarding macroeconomic
matters and their outlook for various asset classes.
Gold is seen as one of the assets likely to outperform
again in 2012 due to risks posed to the euro and longer term risks for the
dollar.
Those polled by UBS were also positive on emerging market
debt. Both asset classes, gold and emerging market debt, were the top pick of
22.5% of the assembly – thereby accounting for 45% of the votes.
On gold’s role as a reserve asset, the importance
reserve managers attach to the yellow metal has slipped back to 2009 levels,
with about 14% having the opinion that it will be the most important reserve
currency in 25 years. This marks a decline from the past two years’
surveys wherein over 20% viewed gold to be the most important reserve
currency.
Cross Currency Table – (Bloomberg)
This year’s survey confirmed that reserve
managers anticipate that the dollar will fall from its pedestal as the sole
reserve currency within the next 25 years.
In past surveys (conducted over the past decade) the
dollar typically was tipped to remain the chief reserve currency by a
plurality—if not a majority—of those polled. This time, like last
year, over half of respondents believe that within 25 years a portfolio of
currencies will supplant the dollar in that role.
Central bank buying has provided good support for gold
this year, and indeed has been evident just when the yellow metal needed it
most, with physical demand taking a step back. But the survey results from
this year’s Reserve Management Seminar, particularly on what reserve
managers are thinking in terms of gold’s role in their respective
portfolios and corresponding allocations, suggests that official sector
support is unlikely to continue in the same magnitude as seen in the last
year.
However, UBS notes that the potential for new entrants
should not be underestimated. After all, there are still a lot of countries,
particularly among the emerging markets, that are very much under-invested in
gold from a global perspective.
The possibility of this group catching the baton from
the current more prominent official sector buyers certainly cannot be ruled
out.
The majority of those polled expect one or more
countries to exit the Eurozone.
About 43% of respondents anticipate one country leaving
the Eurozone, a further 29% expect two or more exits and the remaining 28%
are in line with our call for no exit. The possibility of a Eurozone exit is
seen as the chief risk to global economic and financial stability over a
12-month period by 39% of participants. The risk of Eurozone sovereign
default is a close second at 34%. The majority also see global economic
stagnation over the next 12 months, with 36% viewing deflation as a bigger
risk than inflation.
Indeed, the macro picture in the eyes of the
world’s sovereign institutions does not look all that bright this year.
The UBS' 18th Annual Reserve Management Seminar for
Sovereign Institutions Asset Poll can be read here.
OTHER NEWS
(Bloomberg) -- JPMorgan Lowers 2012 Gold Assumption to $1,791 From $1,844
JPMorgan Chase & Co. lowered its 2012 gold price assumption to $1,791 an
ounce from $1,844 an ounce.
The 2013 estimate is unchanged at $1,831 an ounce,
Roger Bell, an analyst at the bank in London, said in a report dated
yesterday.
(Bloomberg) -- Gold Seen in UBS Poll as Top Performer
With Emerging Markets
Gold will
share top spot with emerging markets as the best performing asset for the
rest of the year as governments take steps to boost growth, according to
about 23 percent of respondents in a UBS AG survey.
(Bloomberg) -- Gold May Drop 20% to $1,300 an Ounce
This Year, Shaoul Says
Gold prices may plunge 20 percent to $1,300 an ounce this year because
bullion is not a “viable alternative” to currencies, said Michael
Shaoul, the New York- based chairman of Marketfield Asset Management.
“The one thing that the world’s governments
are not going to do is allow people to get away with making a fortune in
gold” if the paper-currency system collapses, Shaoul
said today at a Bloomberg Link conference in Boston. “It’s going
to be extremely easy for them to sequester gold and make it illegal to hold
in institutional portfolios.”
Prices tumbled 10 percent in the four months ended May
31 as Europe’s escalating debt crisis prompted traders to favor the
dollar as an investment haven. The metal had rallied for 11 straight years,
touching a record $1,923.70 in September, on concern that monetary stimulus
programs and record-low borrowing costs would boost the rate of inflation.
Bullion may fall to $1,300 this year after dropping below the support level
of $1,520, Shaoul said.
Monetary easing by central banks won’t
“inevitably lead to a spike” in prices, he said. “I just
don’t simply believe that governments are going to tie themselves to
pieces of metal.”
Gold futures for August delivery advanced 20 cents to
settle at $1,619.60 on the Comex in New York. The
price rose for the fifth straight session, the longest rally since late
October.
(Bloomberg) -- Gold ‘Belongs’ in Investor
Portfolios, Council’s Artigas Says
Investors should allocate 2 percent to 10 percent of their assets to gold in
the long term, Juan Carlos Artigas, a manager of investment research at the
World Gold Council, said today at a Bloomberg Link conference in Boston.
The metal “belongs” in portfolios because
it provides investors with risk management and capital preservation, he said.
(Bloomberg) – Gold Hedges Fell 3 Metric Tons in
First Quarter, GFMS Reports
Global gold hedges, or sales of future production, fell by about 3 metric
tons in the first quarter, according to Thomson Reuters GFMS.
That left the worldwide hedge book at 158 tons, the
London- based researcher said today in an e-mailed report. “Hedge book
reductions came from ongoing deliveries into forward sales and the maturity
of option positions, with little active dehedging,”
Thomson Reuters GFMS said.
Bloomberg competes with Thomson Reuters Corp. in
selling financial and legal information and trading systems.
(Bloomberg) -- Gold Demand Not Going Away Any Time
Soon, Winmill of Midas Says
Investor
demand for gold is “not going away any time soon” as growth
remains resilient in India and China, said Tom Winmill,
the president of Midas Funds Inc.
Accommodative monetary policy and government budget
deficits will also support bullion, and prices may reach $1,900 an ounce by
the end of the year, he said at a Bloomberg Link conference in Boston today.
For breaking news and commentary on financial markets
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NEWS
Gold Traders Bullish as Hedge Funds Increase Wagers
– Business Week
Gold up for 6th day, US data boosts easing hopes - Reuters
Gold Records Longest Rally Since October On Stimulus
Bets - Bloomberg
Central banks ready to act as world prepares for
Greek poll - Reuters
COMMENTARY
Evans-Pritchard: ECB last hope as dam breaks in
Spain – The Telegraph
Keiser Report – Con Games Go Global!
– Max Keiser
Auguries—Endgame –
Resource Clips
Steve Forbes on GoldSeek.com Radio - GoldSeek
Mark
O’Byrne
Goldcore
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