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Gold’s London AM fix this morning
was USD 1,776.50, EUR 1,334.41, and GBP 1,130.45 per ounce.
Yesterday's AM fix was USD 1,754.75, EUR
1,325.04, and GBP 1,116.32 per ounce.
Spot gold hit a 3 month high of
$1,781.40/oz yesterday rising for the third day in
a row. Gold has consolidated on those gains in Asia and Europe.
Cross Currency Table – (Bloomberg)
Gold broke through resistance at $1,763/oz around 1800 GMT yesterday and in minutes quickly
surged to $1,770/oz and then over $1,780/oz.
With recent resistance breached at
$1,763/oz, gold could reach the psychological
resistance of $1,800/oz very shortly - we are only
1.3% below that level now.
All major currencies fell against gold
yesterday and the Japanese yen and British pound both took a pummelling and were more down 2% down against gold.
Gold is again signalling
in advance coming fiscal issues in the UK and Japan. In February alone, the
yen is down a substantial 7% against gold and in the last 7 weeks since the
start of 2012, the yen has fallen a whopping 15.5% against gold.
Yen gold strength is a precursor to the
coming Japanese fiscal crisis. It likely also signals that gold is soon to
break out in dollars and other currencies.
XAU-JPY Exchange Rate Daily - (Bloomberg)
Global equity markets are showing jitters
after disappointing economic data out of Europe and China and the threats by
Russia’s Foreign Minister over Iran, leading to concerns that a serious
confrontation is possible. Conflict in the region will of course send
investors towards the safe havens of gold and silver bullion.
The US existing home sales were smaller
than expected in January and this contributed to the weakness in equity
markets. There is also continuing concern that the latest Greek debt package
has not addressed Greece’s deep structural challenges.
The current economic environment is good
for gold. As long as governments continue to print money in an attempt to
pull us out of this downturn, gold will continue to shine.
The New York Times reports that
Greece’s lenders may have the right to seize the Bank of Greece’s
gold reserves.
Ancient Greek Gold Coin of Alexander the
Great
“Ms. Katseli,
an economist who was labor minister in the government of George Papandreou
until she left in a cabinet reshuffle last June, was also upset that
Greece’s lenders will have the right to seize the gold reserves in the
Bank of Greece under the terms of the new deal.”
The Reuters Global Gold Forum confirms
that in the small print of the Greek “bailout” is a provision for
the creditors to seize Greek national gold reserves. Reuters correspondents
in Athens have not got confirmation that this is the case so they are, as
ever, working hard to pin that down.
Greece owns just some 100 tonnes of gold. According to IMF data, for some reason
over the last few months Greece has bought and sold the odd 1,000 ounce lot
of its gold bullion reserves. A Reuter’s correspondent notes that
“these amounts are so tiny that it could well be a rounding issue,
rather than holdings really rising or falling.”
While many market participants would
expect that Greece’s gold reserves would be on the table in the debt
agreement, it is the somewhat covert and untransparent
way that this is being done that is of concern to Greeks and to people who
believe in the rule of law.
Recent months have seen many senior
German government officials calling for so called “PIIGS” nations gold reserves
to be used as collateral. Such as Angela Merkel’s budget speaker and
his opposition counterpart who urged Portugal to consider selling their gold.
Norbert Barthle,
Germany’s governing coalition budget speaker and his counterpart Carsten Schneider from the Social Democrats, the biggest
opposition party, urged Portugal to consider selling some of its gold reserves
to ease its debt problems. They called for a review of Portugal’s
request for financial aid to include gold and other potential asset sales.
The Irish Times reported in November that
EU finance ministers’ discussed a wider strategy by the ECB to sound
out the possibility of gaining control over the gold reserves of the euro
zone’s central banks.
Senior German politician, Gunther Krichbaum, a lawmaker in German Chancellor Angela
Merkel’s governing coalition and Chairman of the Committee on the
Affairs of the European Union of the German Bundestag has proposed late last
year that Italy sell its sizeable gold reserves in
order to lower its debt.
Gold’s importance as debt and third
party risk free collateral and as the ultimate form of money is increasing by
the day.
While Greece’s gold reserves are
very small – Greece’s creditors and senior German and EU financial
officials clearly understand the value and monetary and strategic importance
of Greece and the other heavily indebted European nations gold reserves.
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OTHER NEWS
(Bloomberg) -- Gold Rises to Three-Month High on Stimulus Bets,
Computer Trades Gold futures jumped to a three-month high on speculation that
the U.S. will extend a stimulus to bolster the economy, while automatic
purchases by computer programs may have contributed to the rally.
The Federal Reserve may extend a program
known as Operation Twist, or the exchange of $400 billion in short-term debt
for longer-term Treasureis, beyond June 30, the
Financial Times said. Computer orders triggered more purchases starting
around 1 p.m. New York time, said Phil Streible, a
senior commodity broker at R.J. O’Brien & Associates in Chicago.
“Some people started buying on
expectations of further credit easing and then we saw an unusual accumulation
caused by the technical buying” Streible said
in a telephone interview.
(Bloomberg) -- Gold May
Reach $1,975 an Ounce in 2012, FCStone’s
Rhodes Says
Gold may climb to $1,975 an ounce in 2012, said Jeffrey Rhodes, INTL FCStone Inc.’s global head of precious metals. The
metal is expected to average $1,727 this year, Rhodes said at a conference in
Singapore today. Rhodes forecast that silver may reach $50.25 an ounce in
2012 and average the year at $36.25.
SILVER
Silver is trading at $34.52/oz,
€25.98/oz and £21.97/oz.
PLATINUM GROUP METALS
Platinum is trading at $1,729.00/oz, palladium at
$711.00/oz and rhodium at $1,500/oz
NEWS
(Reuters)
Gold pauses after rally; monetary easing hopes support
(MarketWatch)
Gold at 3-month high as bargain seekers prevail
(ABC News)
TV: Goldline Agrees to Refund
Millions to Customers
(Bloomberg)
Iran Snub Dims Prospects for Nuclear Accord
(The New York Times)
Greece’s Lenders Have The Right To Seize Bank of
Greece Gold Reserves
COMMENTARY
(MarketWatch)
Great Day For Gold
(The Washingtong
Post)
Barratt Likes Gold, Says Silver Among `Top Picks'
(Zero Hedge)
Martenson: Dangerous Ideas About Peak Oil
(Mauldin Research)
Ben Graham’s Curse On Gold
(Zero Hedge)
Negative Salaries, Negative Bailout And Now Negative Gold
– Greece Just Became The Bankster's Paradise
Mark
O’Byrne
Goldcore
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