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Gold is trading at USD 1,712.30, EUR 1,280.80,
GBP 1,100.00, CHF 1,574.70 and JPY 133,080 per ounce.
Gold’s London AM fix this morning was USD
1,714.00, GBP 1,100.41, and EUR 1,280.06 per ounce.
Friday's AM fix was USD 1,676.00, GBP 1,084.02,
and EUR 1,263.86 per ounce.
Cross Currency Rates
Gold is higher in most currencies today. Gold is
higher due to the dollar coming under pressure and oil prices (WTI) have
surged over 3%.
Stock markets are also higher on fresh hopes
Europe will unveil yet another set of measures to tackle the deepening
contagion in the Eurozone.
Monetary and systemic risks remain and should see
gold well supported at the $1,700/oz level. Indeed,
gold could have bottomed on options expiry last week – as is often the
case.
Western physical buyers continue to accumulate
due to currency concerns. While, demand is robust, there is no panic buying
or mass “flocking to gold”.
Physical buyers of gold in India, the world's
biggest consumer of bullion, remain on the sidelines even though traders
offered discounts of up to $5 per ounce to global prices, according to
Reuters.
Chinese New Year buying should commence soon
which will be supportive of prices and make up for the expected decline in
Indian demand.
The currency war meme continues as seen in wild
scenes of celebration in Caracas on Friday when Venezuelan citizens partied
in the streets as their gold reserves were repatriated.
Reuters reports the first shipment of gold bars
arrived home in Venezuela on Friday “amid wild celebrations.”
Excited crowds lined the roadside waving big
Venezuelan flags and chanting "It's returned! It's returned!" as a
convoy of soldiers and armored cars carried the gold ingots from Maiquetia airport to the central bank in Caracas.
The President of the central bank, Nelson Merentes traveled into the city at the head of the
convoy. He did not say how much gold bullion was brought back in Friday's
shipment but said the bullion came from several European countries.
"Our gold is being stored in the
vaults," Merentes told the cheering crowds,
sporting a baseball cap that read "The Central Bank of Venezuela with
the People."
"It has historic value. It has symbolic
value. And it has financial value," bank chief Merentes
said about the first shipment.
"Each box of gold weighs 500 kilograms and
is worth about $30 million,” Merentes said
before cheering crowds. “We’ll bring the rest back little by
little.”
Merentes is in favor of the move and
said, "The country's finances will be backed by autonomous wealth, so we
are not subject to pressure from anyone," UPI reported.
“This guarantees that if there are
financial problems in the international markets our gold will be safe here at
home,” Merentes said.
Drums and sirens sounded out across the square as
many in the crowd sang "Forward comandante!"
in support of the president. Some waved homemade signs that said: "The
gold has returned thanks to Chavez!" and "Long live our
sovereignty!"
Chavez addressed the nation on local television
last week with the Council of Ministers, the Executive Cabinet and
representatives of the Venezuelan Central Bank, including bank chief, Nelson Merentes.
Speaking from the Miraflores
presidential palace Chavez said the move was giving back the country’s,
“Body and soul,” and went on to say the return of the gold gave
Venezuela more independence from what he described as imperialist powers.
While brandishing a copy of the constitution he explained that the Central
Bank would carry out the repatriation.
Chavez said the central bank would now be
independent of foreign powers and subject only to the national
constitution.
Chavez announced the repatriation in August as a
"sovereign" step that would help protect Venezuela's foreign
reserves from economic turmoil in the United States and Europe. Most of
Venezuela's gold held abroad is in London.
"They say Chavez is going to take the gold
to Miraflores (presidential palace) and is going to
give it to Cuba as a gift," the president chuckled on Friday, mocking
political rivals who accuse him of planning to sell the ingots to fill his
electoral war chest ahead of next year's election.
"The gold is returning to where it was
always meant to be: The vaults of the Central Bank of Venezuela."
“It’s our gold. It’s the
economic reserve for our kids. It’s growing and its
going to keep growing, both gold and economic reserves,” said Chavez.
“Venezuela is going to become an economic power, not for the bourgeois
or capitalism, but for the Venezuelan people.”
A central bank report released in August showed
that Venezuela held gold reserves with the Bank of England, JPMorgan Chase
& Co., Barclays Plc and Standard Chartered Plc among other banks.
Merentes said in August that
Venezuela will look to deposit some of its $6.3 billion of cash reserves in
emerging-market financial institutions in Russia, China and Brazil.
Like most of those gathered outside the bank,
62-year-old university professor Jose Escalona
wholeheartedly agreed.
"There was no reason for it to be in
England," he said. "This gold belongs to all Venezuelans," he
told Reuters.
A senior government source involved in
transporting the bars, which amount to 90% of Venezuela's gold held abroad,
has told Reuters they will be shipped in several cargo flights that will be
completed before the end of the year.
The total cost of the operation will be no more
than $9 million, the source said, without elaborating.
Chavez often accuses previous presidents of
selling off Venezuelans' national assets, including by storing most of the
country's gold reserves with Western banks in the mid-1980s.
Chavez is worried about Venezuela's foreign
reserves being frozen by sanctions.
By repatriating the bullion, he also reduces the
risk of any seizure of assets related to arbitration cases, including those
linked to the nationalization of multibillion-dollar oil projects run by US
multinationals.
Critics have suggested that Mr
Chavez is acting out of fears Venezuela's overseas assets could one day be
frozen by sanctions, as happened to his friend and ally, the late Libyan
leader Col Muammar Gaddafi.
 
Chavez, the Venezuelan central bank and some of
its people clearly understand the value of gold.
This is in marked contrast to the majority of
people in the western world who have forgotten gold’s
‘historic’, ‘symbolic’ & ‘financial’
value.
With increasing systemic and monetary risk, gold
is reasserting itself as money and as an important safe haven monetary asset.
SILVER
Silver is trading at $32.03/oz,
€23.98/oz and £20.58/oz
PLATINUM GROUP METALS
Platinum is trading at $1,551.63/oz, palladium at
$590.50/oz and rhodium at $1,575/oz.
NEWS
(Reuters)
Gold jumps 1 percent on rising euro, Italy aid hopes
(Bloomberg)
Australian Gold Output Declines as Miners Use
Lower-Grade Ore
(Reuters)
Euro area crisis threatens EU sovereign ratings:
Moody's
(Euro News)
Video: Gold Bullion Returns to Venezuela
COMMENTARY
(Reuters)
Today's Currency War May be Tomorrow's Global
Crisis: Book
(ZeroHedge)
Bifurcated Euro Begins As AAA-Only 'Elite'-Bond
Issuance Considered
(ZeroHedge)
Gold Follows Stocks Vertically
(Wall Street Journal)
Inner Workings of Market Readied for Euro Breakup
(Reuters)
Insight - Euro zone staring into the abyss, waiting
for ECB
Mark
O’Byrne
Goldcore
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