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Today’s AM fix was USD
1,715.00, EUR 1,347.42, and 1,075.84 GBP per ounce.
Yesterday’s AM fix was USD 1,730.50, EUR 1,345.86, and GBP 1,080.75 per
ounce.
Silver is trading at $31.85/oz, €25.10/oz and
£20.00/oz. Platinum is trading at $1,546.75/oz,
palladium at $607.30/oz and rhodium at $1,100/oz.
Gold rose
$2.10 or 0.12% in New York yesterday and closed at $1,718.30. Silver hit a
low of $31.209 then recovered in late trade but still finished with a loss of
0.56%.
Gold rose for a third day
yesterday after confirmation that President Barack Obama won re- election,
while stock markets fell sharply and treasuries headed for the biggest
advance in 11 weeks.
Robust investment demand
continues and may intensify after the election and exchange traded products
backed by gold attracted $2.5 billion of inflows in October alone.
Total inflows in commodities
ETPs were $3.1 billion last month, taking assets under management to $201.6
billion for Blackrock Inc alone according to Bloomberg.
Many analysts believe that
President Obama’s re-election is the “best- case” scenario
for precious metals due to implications for monetary and fiscal policy. Obama
faces chronic high unemployment, weak economic growth and the upcoming fiscal
cliff, not too mention very difficult geopolitical
challenges in the form of Israel, Iran, Russia and China.
Today, The European Central
Bank has its rate decision at 1245 GMT and they are expected to leave rates
unchanged.
The Bank of England decided
to leave its benchmark interest rate at a record low and pause
its stimulus plan after the British economy emerged from a double-dip
recession in the third quarter.
Investors are now again focussing
on the US fiscal cliff which will enact $600 billion in tax hikes and severe
budget cuts, if no action is taken by the US Congress, than the US will fall
deeper into its recession.
XAU/GBP Currency 2 Years – (Bloomberg)
XAU/EUR Currency 2 Years – (Bloomberg)
Gold bullion is not only
supported by the uncertainty of the “fiscal cliff” but the
Eurozone debt crisis is set to deepen again.
There remains the real risk
of an exit from the single currency by one or more members and of course the
risk of a global recession and Depression which will be responded to by more loose monetary policies by various central
governments.
More of the world's rich are
moving their gold, silver and other valuables away from the economic turmoil
in the West to the Asian capitals of Singapore and Hong Kong according to
Reuters (see commentary).
This is prompting vaulting
and storage specialists in the increasingly prosperous region to increase
their capacity by creating extra vaulting space.
Depositories in Asia report
that there are a lot of enquiries from European banks, not because the banks
themselves necessarily want to move the assets to Asia, but because their
clients are asking them to.
These clients include rich
Asians who want their valuables closer to home as well as Westerners.
Singapore and Hong Kong are
two of the favoured destinations. Both have seen a
significant increase in gold importations in 2012.
With Chinese demand for gold
and silver surging depositories are looking to cater to the huge growing
swathe of wealthy Chinese and this is leading to increasing vaulting services
being offered in Singapore, Hong Kong and now even Shanghai.
China is on its way to
overtake India as the world's biggest gold consumer this year, as India's
gold demand has taken a blow on record rupee prices and higher import tax
while Chinese consumers' appetite for gold remains resilient.
We have firsthand experience
of this increasing preference for secure bullion storage as we have
seen an increased preference for storage in Zurich and Hong Kong.
Zurich remains the preferred
destination for most western investors and of investors internationally but
we and other bullion providers are seeing some western clients opt for secure
storage in Asia.
There is a definite sense
amongst some of our American and European clients that storing gold in Zurich
and Asia is safer than in London, New York, Delaware or elsewhere in U.S. and
this trend is set to continue.
Throughout history capital
has flowed to where it is most favourably treated
and today there is a definite move to own capital and assets outside of
massively indebted and near insolvent western democracies.
Obama’s second term is
likely to see Ben Bernanke continue to devalue and debase the dollar which
will lead to increased investment demand and store of wealth demand for gold
and to investors seeking storage in Zurich, Singapore and Hong Kong.
Cross Currency Table – (Bloomberg)
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