Today’s AM fix was USD 1,307.50, EUR 972.84 and GBP 770.39 per
ounce.
Yesterday’s AM fix was USD 1,305.00, EUR 971.20 and GBP 768.55 per ounce.
Gold climbed $2.30 or 0.18% yesterday to $1,305.10/oz and silver rose
$0.12 or 0.58% to $20.62/oz.
Gold rose 0.4% in London this morning after gold
in Singapore traded sideways overnight. Futures trading volume continues
to increase and was almost double the average for the past 100 days for this
time of day, Bloomberg data shows.
Gold in U.S. Dollars - 50, 100, 200 Simple Moving Averages (Thomson
Reuters)
Silver for immediate delivery rose 0.8% to $20.73 an ounce in
London. Platinum was 0.1% lower at $1,486.82 an ounce. Palladium gained 0.3%
to $883.63/oz and remains close to a 13 year nominal high of $889.75.
Geopolitical tension in Europe and in the Middle East is supporting gold.
Israel's military pounded targets in the Gaza Strip on Tuesday after Prime
Minister Benjamin Netanyahu said his country should prepare for a long
conflict in the Palestinian enclave, squashing any hopes of a swift end to 22
days of fighting.
Gaza residents reported heavy Israeli bombing in Gaza City. Israeli
aircraft fired a missile at the house of a Hamas Gaza leader and flattened it
before dawn. An Israeli military spokeswoman said 70 targets were struck in
Gaza through the night. At least 30 people were killed in the assaults from
air, land and sea, residents said, after a night of the most widespread
attacks so far in the tiny enclave.
The new sanctions are set to inflame relations further. They are on “key
sectors” of Russia’s economy, U.S. Deputy National Security Adviser Tony
Blinken said yesterday. Russia also signaled possible retaliation, announcing
yesterday that it may ban imports of chicken from the U.S. and fruit from
Europe because of concern about contamination.
Futures options expiration is over but we are not out of the woods yet and
gold and silver could see more volatility this week ahead of key reports on
gross domestic product on Wednesday and employment data on Friday. The
Federal Reserve's chief policy making committee meets today and tomorrow and
this could have another short term impact on prices.
Russia, Kazakhstan, Kyrgyzstan and Tajikistan Buy Gold - Bye Bye
Petrodollar
Russia continues to aggressively accumulate gold reserves. Its gold holdings
increased again in June as the crisis in the Ukraine and relations with the
West deteriorated.
The Russian central bank officially increased its gold holdings by 16.8
tonnes to 1,094.8 tonnes in June, the IMF's International Financial
Statistics report showed. In ounce terms, Russia increased its gold holdings
by some 500,000 ounces, to 35.197 million ounces in June from 34.656 million
ounces in May.
Russia recently became the world's fifth largest bullion holder after the
United States, Germany, Italy and France.
Importantly, China’s gold holdings, the world’s biggest store of wealth
buyer of gold, haven’t been updated since March, 2009 and remain at just
33.89 million ounces or 1,054.1 tonnes and just 1% of their huge foreign
exchange reserves. More than five years later, it is likely that China’s
reserves have doubled or trebled as they quietly corner the global physical
gold market.
It is important to note that there remain doubts as to the integrity of
the gold holdings of the U.S. and concerns that other countries national gold
reserves could be encumbered, loaned or sold in the market. Indeed, the
Bundesbank is having grave difficulty in having its gold reserves returned
from the Federal Reserve in New York.
So far in 2014, Russia has now bought substantially more than their entire
annual gold production of nearly 1,500,000 ounces.
Russia was not the only central bank to diversify foreign exchange
reserves, primarily held in dollars, into gold. Allies of Russia also bought
gold in June. The central banks of Kazakhstan, Kyrgyzstan and Tajikistan, all
Russian economic and military allies all accumulated gold in June.
Currency
wars are set to intensify and the buying by the former Soviet states is
another manifestation of this.
Russia’s foreign reserves fell $39 billion to $472 billion in June, data
from the Russian central bank shows. Gold now accounts for 9.3% of the
country’s reserves, according to the World Gold Council substantially less
than the percentage of gold in fx reserves of the other leading gold owners.
Greece, Serbia, Mexico and Equador also diversifed and increased their
gold reserves in June.
Turkey increased its holdings to 16.491 million ounces from 16.172 million
ounces in May. It accepts gold in its reserve requirements from commercial
banks and as payment from other sovereign nations such as Iran.
Germany, the second-biggest gold holder, lowered its holdings by a tiny
1,000 ounces to 108.805 million ounces from 108.806 million ounces.
Gold advanced the most in four months in June as fighting in Ukraine to
Iraq and Israel boosted demand for a haven. Hedge funds and banks almost
doubled net-long position in gold during June, U.S. Commodity Futures Trading
Commission (CFTC) data show.
Gold’s safe-haven appeal is being driven by heightened tensions between
Russia and the West over Ukraine and increasing concerns of financial and
economic war and indeed of actual war.
Geopolitical risk in June likely prompted some central banks to further
diversify their foreign exchange holdings and buy gold which is used to hedge
against geopolitical, currency and credit risks.
Reserve Currencies In History - Dollar's Demise Cometh
Central banks continue to be buyers of gold at these attractive price
levels. As sanctions, economic war and currency wars intensify we expect
Russian and Russian ally buying of gold reserves and selling of dollars to
intensify. Aggressive buying of gold and particularly silver by Russia will
likely lead to defaults on the COMEX gold and silver futures exchanges and
potentially an international monetary crisis.
See important guide to Currency Wars here Currency
Wars: Bye, Bye Petrodollar - Buy, Buy Gold
