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SPOT GOLD PRICES traded in a
$10 range Monday morning, rising above last week's finish at $1656 per ounce
as European stock markets cut earlier losses.
Silver prices also whipped in a tight range, holding at $30.25 per ounce by
lunchtime in London.
Major currencies and government bonds were also little changed, as were
broader commodity prices.
Looking
at the broader commodities sector, "In 2012 we had a lot of liquidating
by hedge funds," says Rob Haworth, senior investment strategist at US
Bank Wealth Management in Seattle, "but there's an incentive to reverse
that because of growth in emerging markets and especially China.
"It's going to be a good year for commodities."
US data show speculators raising the size of their bullish commodity bets for
the time since November last week.
Speculative betting on the gold price, known as the "net long"
position of bullish minus bearish bets, rose 3.1% to the equivalent to 609
tonnes of gold by New Year's Eve.
That was below the 2012 average of 633 tonnes however,
and well below the 5-year average of 722 tonnes.
Overall, the total number of US gold futures and option contracts shrank last
week to a 3-year low, dropping below 600,000 for the first time since
September 2009.
With the Chinese New Year now 5 weeks away, in contrast, the Shanghai Gold
Exchange today reported a sharp jump in physical gold trading, with volume
breaking more than 22 tonnes.
"For 2013, an unreliable economy compels us to prefer supply-constrained
commodities, especially the precious metals," says investment bank
Morgan Stanley, forecasting average gold prices of $1853 per ounce this year.
"With loose monetary policy and low real interest rates, we believe that
gold and silver will likely continue to perform."
But "I think America will sort itself out and the economy will start
moving again positively," reckons Rene Hochreiter,
CEO of Allan Hochreiter Ltd. in Johannesberg
and winner of the London Bullion Market Association's 2012 price forecasting
competition.
"As gold declines, as the world economy improves, so platinum, palladium
and silver will start to pick up...Platinum may take another year or so
before it beats gold and then it's going to stay above gold for the next
upward cycle which could be five or six years," Hochreiter
is quoted by Bloomberg News.
Gold prices will now average $1600 per ounce in 2013 believes Hochreiter, after averaging $1669 last year. His 2012
forecast was for $1650 per ounce.
The price of platinum has now been below the price of gold since September
2011, the longest such period in at least three decades.
Western policymakers meantime extended by 4 years today the deadline for new
banking regulations, aimed at avoiding a repeat of the 2007-2009 credit crunch.
"The new liquidity standard will in no way hinder the ability of the
global banking system to finance a global recovery," said Mervyn King, the UK's chief central banker and head of
the Basel committee's oversight group.
Requiring banks to meet just 60% of the new liquidity requirements by 2015,
with the full deadline pushed back to 2019, "It's a realistic
approach," King said.
Adrian Ash
Adrian Ash is head of research at BullionVault – the secure, low-cost gold and silver
market for private investors online, where you can buy gold and silver
vaulted in Zurich on just 0.5% dealing fees.
(c) BullionVault 2012
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