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Today the
London Bullion Market is closed for a national holiday.
Friday’s AM fix was USD 1,666.50, EUR 1,329.16 and GBP 1,051.88 per
ounce.
Silver is
trading at $30.91/oz, €24.77/oz and £19.62/oz. Platinum is trading at $1,550.00/oz, palladium at $647.90/oz and
rhodium at $1,025/oz.
Gold climbed
$0.80 or 0.05% in New York on Friday and closed at $1,669.80. Silver surged
to as high of $30.71 and finished with a gain of 0.52%. On the week gold
climbed 3.3% and silver gained a whopping 9.3%.
Cross Currency Table – (Bloomberg)
Gold hit a
high not seen since mid April on Monday, continuing
the momentum from last week’s gains as investors expect further
monetary stimulus from central banks and become increasingly concerned about
inflation.
Consumer
price inflation data in the US is due Friday and is expected to move higher
on higher fuel and food costs.
There may be
more hints of further cheap money from the Jackson Hole Symposium later this
week as finance chiefs gather to discuss economic policy behind closed doors.
Monetary risk
remains high especially in the euro zone after Jens Weidmann,
head of the Bundesbank, sent a shot across the bows
of the ECB’s Draghi and likened the mooted
ECB bond-buying plans to a dangerous drug.
Merkel
praised Weidmann for speaking out about his doubts
and said she saw strong Bundesbank influence within
the ECB as positive. But she took care not to voice any support for his
criticism of Draghi's policies.
Weidmann rejected suggestions that he was isolated on the ECB
Governing Council in having such reservations. "I hardly believe that I
am the only one to get a stomach ache over this," he said.
Alexander Dobrindt, a senior German politician who has been the
Executive Secretary of the Christian Social Union of Bavaria since 2009, was
more direct, saying Draghi risked passing into the
history books as the "currency forger of Europe".
A
conservative ally of Merkel, Dobrindy echoed Bundesbank’s Weidmann
that Greece should leave the currency bloc by next year.
The comments
show the huge divisions in Germany over the debt crisis now in its 3rd year
and the understandable concerns of inflation and even hyperinflation.
The Bundebank and senior politicians and allies of Merkel may
thwart Mario Draghi’s big plans to do
“whatever it takes” to solve Europe’s financial collapse.
One way or
another, the euro is certain to fall in value in the long term.
Gold in USD 2 Years – (Bloomberg)
As was
pointed out by Merryn Somerset Webb at the weekend
(see commentary) the euro has defied negative commentary but the question is
for how much longer.
The
fundamentals of the euro are appalling – just to keep eurozone broad money supply from contracting alone will
take a whopping €3 trillion.
“The
euro is clearly a bad currency by any definition.” While some fund
managers advocate shorting the euro, we believe this is a high risk strategy
for investors as in the short term the euro could stage a strong rally
– should for example Grexit happen. A
‘core euro’ could and would likely become stronger.
Therefore,
investors and savers best way to protect against a fall in the value of the
euro and indeed other fiat currencies is to have an allocation in physical
gold.
US economic
data published this week follows. Today is the Chicago Midwest manufacturing
index for July at 1230 GMT. Tuesday is the Case-Shiller
20-city Index and Consumer Confidence. Wednesday is GDP, Pending Home Sales,
and the Fed’s Beige Book. Thursday is Initial Jobless Claims, Personal
Income & Spending, and Core PCE Prices. Friday is Chicago PMI, Michigan
Sentiment, and Factory Orders.
For breaking
news and commentary on financial markets and gold, follow us on Twitter.
NEWSWIRE
(Bloomberg) -- Platinum to Trade at Premium to Gold
Platinum may trade at a premium over gold within six months as a lower
supply of the white metal boosts prices, according to Jeffrey Rhodes, global
head of precious metals at INTL FCStone Inc.
Platinum may
climb to $2,000 an ounce by December, while gold advances to a record $1,975
an ounce, Rhodes said at a conference in Hyderabad, India today. Spot
platinum ended at $1,549.75 yesterday after rallying on supply disruptions in
largest producer South Africa. Gold was at $1,670.55.
G10 and Precious Metals Currency Ranked Returns –
(Bloomberg)
(Bloomberg)
-- Platinum Prices More Bullish Next Year, Standard Chartered Says
Platinum prices may climb next year
on less supply from mines in South Africa, the biggest producer, Jeremy East,
global head of metals trading at Standard Chartered Bank, said.
Platinum is
more bullish next year because many mines in South Africa will be closing, so
supply will be reduced and the market will be more balanced, East said at a
gold conference in Hyderabad.
“Tighter
regulations and problems at trade unions have created a lot of challenges at
the production side,” he said.
Gold may
climb to $1,750 an ounce by December because of problems in Europe and a
possibility of further stimulus programs to boost economies, he said.
(Bloomberg)
-- Gold Traders Increase Bets on Price Rise, CFTC Data Shows
Hedge-fund managers and other large speculators increased their net-long
position in New York gold futures in the week ended Aug. 21, according to
U.S. Commodity Futures Trading Commission data.
Speculative
long positions, or bets prices will rise,
outnumbered short positions by 130,684 contracts on the Comex
division of the New York Mercantile Exchange, the Washington-based commission
said in its Commitments of Traders report. Net-long positions rose by 16,380
contracts, or 14 percent, from a week earlier.
(Bloomberg)
-- Silver Traders Increase Bets on Price Rise, CFTC Data Shows
Hedge-fund managers and other large
speculators increased their net-long position in New York silver futures in
the week ended Aug. 21, according to U.S. Commodity Futures Trading
Commission data.
Speculative
long positions, or bets prices will rise,
outnumbered short positions by 21,200 contracts on the Comex
division of the New York Mercantile Exchange, the Washington-based commission
said in its Commitments of Traders report. Net-long positions rose by 5,613
contracts, or 36 percent, from a week earlier
NEWS
Gold Surges Amid Inflation Concerns
– Wall Street Journal
Gold hits 4-1/2 month high on Fed stimulus hopes
- Reuters
Gold Set for Best Year Since 2010 as Stimulus Bets
Stoke Demand – Business Week
Merkel tries to calm storms over Greece, ECB policy
- Reuters
COMMENTARY
Somerset Webb: Euro defies gravity – but not
for much longer – The Financial Times
Keiser Report: Debt Bomb – You
Tube
Brimelow: Is Gold Heading To $4,500? –
Market Watch
Bundesbank's Weidmann Warns: Debt
Monetization Is An Addictive Drug – Zero Hedge
Republicans tease with gold standard, but idea seen
full of bugs - Reuters
Mark
O’Byrne
Goldcore
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