Gold is trading at USD 1,724.70, EUR 1,289.70, GBP
1,099.30, CHF 1,105.5, JPY 134,050 and AUD 1,679.4 per ounce.
Gold’s London AM fix this morning was USD
1731.00, GBP 1108.20, and EUR 1,289.96 per ounce.
Yesterday's AM fix was USD 1,720, GBP 1,098.76, and EUR
1,284.54 per ounce.
Gold in USD – 1 Year (100, 144 & 200 DMA)
Gold is marginally lower in most currencies today
except for the euro and Swiss franc after seeing a 0.44% gain in dollar terms
yesterday. Technically, gold is back above the 100 day moving average (see
chart) which could result in some traders going long again.
It will be interesting to see if gold repeats its
trading pattern from last year when it eked out very marginal gains in
November and December prior to falling in the first month of 2011.
The price falls in January led to further cries that
the gold “bubble” was bursting and indeed led some investors to
nervously sell prior to the strong, steady gains seen from February through
Equities have made tentative gains but investors remain
cautious ahead of another European Union summit where hopes are again high
that politicians find a way to resolve the Eurozone’s 2 year old debt
crisis, prevent contagion and the end of the euro as it we know it today.
Cross Currency Rates
Markets remains tentative after Standard & Poor's
fired a second warning shot at the euro zone in 24 hours, threatening to cut
the credit rating of its financial rescue fund. S&P said the EFSF may
lose its AAA rating if any AAA euro zone country is downgraded.
The UK Prime Minister has increased nervousness about
the summit. As the scale of the planned “fiscal union” became
clear, including proposals for the EU to have “intrusive control”
of national budgets, Cameron said that the UK will not sign a new European
Union treaty unless certain safeguards are built in.
Cameron has threatened to veto the deal which is
ostensibly to save the euro unless he wins safeguards for the UK with regard
to national budgets, the City of London and the European single market.
Commentary continues to suggest that gold's safe haven
appeal has been tarnished in recent weeks. Similar commentary was seen in the
aftermath of price falls in 2007, 2008, 2009, 2010 and now again in 2011.
Obviously, gold is often correlated with risk assets in
the short term. Turmoil in financial markets squeeze funding and forces
speculators and more short term investors to close profitable gold positions
to cover losses elsewhere.
However, the same market turmoil and uncertainty leads
less speculative market participants, investors and store of wealth buyers to
buy physical bullion as a long term wealth preservation strategy which leads
to gold’s inverse correlation with equities and bonds over the long
This lack of correlation with riskier paper assets has
clearly been seen throughout history. It was graphically seen in the last
decade, since the outset of the global financial crisis in 2007 and will be seen
again this year and in the coming years.
New Independent Research Confirms Gold Crucial
Diversification, Hedge Against Monetary and Systemic Risk
excellent independent research was released yesterday confirming gold's
unique role as a diversifier and foundation asset in the portfolios of
investors, especially at a time of heightened currency and investment risk.
The independent research from highly respected New
Frontier Advisors (NFA) confirms the importance of gold as a portfolio
diversifier to investors in Europe and to investors exposed to the euro.
During a period of extraordinarily serious economic
uncertainty in the Eurozone, continued concerns about economic growth in the
US heading into an election year, and the possibility of an economic slowdown
in China, the World Gold Council (WGC) wanted to examine the relevance of
gold as a strategic asset for euro-based investors to protect their
portfolios and to mitigate the systemic risks being faced.
Euro Versus G10 Currencies and Precious Metals (YTD)
The report, ‘Gold as a strategic asset for European
investors’, commissioned by the World Gold Council,
explores gold as a strategic asset across five sets of asset allocation
studies, including four using historical data spanning 1986 to 2010, and one
using the 1999 to 2010 time frame.
The third party research builds on the now considerable
research and academic literature showing that gold adds significant
diversifying power due to its low or negative correlation with most other
assets in an investment portfolio.
Gold’s relevance as a strategic asset is
continuing to grow. This will continue in a world facing the real risk of a
global recession and even a Depression, poor investment returns, currency
devaluations and wars and very high monetary and systemic risk.
Put simply, when used as a foundation asset, gold has
preserved wealth throughout history and again today.
Gold’s unique properties will protect savers and
investors in Europe and internationally against the monetary and systemic
risks being faced in 2012 and in the coming years.
Chavez Announces Second Batch of Gold in Venezuela
President Hugo Chavez said that a second shipment of gold reserves being
repatriated from banks in Europe and North America arrived today in Caracas.
He spoke today during a press conference from the presidential palace without
providing more details according to Bloomberg.
Venezuela’s central bank received the first
shipment of gold on November 25 without providing details on the amount.
Venezuela had 211 tons of gold reserves held abroad as of August.
Venezuelan President Hugo Chavez on Tuesday announced
the arrival of the second batch of gold in the country, coinciding with the
13th anniversary of his first electoral victory according to Prensa Latina.
"I was just informed that a second truck
carrying gold passed by the Miraflores
Palace," Chavez told international reporters.
The president said that there is nothing more exposed
than keeping that auriferous resource in Europe and the United States.
"I have nothing against Europe. I am just telling the truth,"
"How long will we keep that gold there? Who knows
if a king or NATO (North Atlantic Treaty Organization) comes and issues an
insane decree-law? That gold is ours," added the Venezuelan head of
The first shipment of gold, which was in European
banks, was repatriated to Venezuela on November 25.
Last August, Chavez announced that he would bring back
the 211.35 tons of gold that Venezuela had abroad, worth 11 billion dollars.
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Silver is trading at $32.30/oz,
€24.16/oz and £20.68/oz
PLATINUM GROUP METALS
Platinum is trading at $1,511.70/oz, palladium at
$671.02/oz and rhodium at $1,500/oz.
Gold edges up on EU summit hopes
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Eurozone debt crisis: Cameron threatens to veto EU
Ireland: Warily on the Way Back
(World Gold Council)
Gold as a Strategic Asset for European Investors
Ten Solid Reasons to Buy Gold Bullion Coins
The Economic Case For Gold In Your Portfolio
Gold's Lead Over Stocks in 2011 Ranges from 26% to
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