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Today’s
AM fix was USD 1,766.75, EUR 1,369.36, GBP 1,088.37
per ounce.
Yesterday’s AM fix was USD 1,758.50, EUR 1,361.91 and GBP 1,084.96 per
ounce.
Silver is trading at $34.23/oz,
€26.58/oz and £21.18/oz. Platinum is
trading at $1,633.75/oz, palladium at $643.00/oz and rhodium at $1,100/oz.
Gold fell $8.60 or 0.49% in New York yesterday and
closed at $1,764.50. Silver slipped to a low of $33.594 then rebounded in New
York, but it still finished with a loss of 1.62%.
Gold Seasonality Chart - Heatmap
Gold edged up
today, on investor expectations for continued strength in the yellow metal
linked to recent ‘stimulus’ packages employed by central banks
globally.
With all
major central banks now engaged in some form of QE, we now have ‘QE
Everywhere’ and the race to competitively devalue national and
supranational currencies has intensified.
In the
‘beggar thy neighbour’ great game that
is the global currency war, the only winners will be those that are fully
diversified with physical gold and silver and those that own their bullion
and other assets in the safest ways possible.
German
business sentiment dropped for a 5th straight month this September. The
Munich-based IFO Institute’s Monthly Sentiment Index hit its lowest
level since early 2010 and the outlook component hit its worst level since
May 2009.
The sentiment
highlights the scepticism that many German
companies have towards Mario Draghi’s plan to ‘stimulate’ the European economy.
The German
experience with ‘stimulation’ was not a pleasant one and they are
rightly wary of inflation and currency depreciation.
With the eurozone debt crisis dragging into its 3rd year, it is
inevitable that Germany would begin to feel the pain that other countries
have been living with for the past few years. However, German businesses and
tax payers are increasingly concerned about the risk that contagion poses to
the German bond market, economy and the single currency.
In recent
weeks, gold and silver have seen the strong gains that were anticipated by
the bulls.
Gold is 11.5%
higher and silver is a sharp 24% higher in the last three months alone.
In the past
month silver is up 11% and gold is up 5.7%.
As in all
bull markets - two steps forward are often followed by one step back and a
period of correction and consolidation is quite possible.
This week
will see the end of September trading and September is, along with November,
one of the strongest months to own gold.
Next Monday
(October 1st ) we commence volatile October and October is one of the weakest
periods for gold and has often seen sell offs (See Graphics). This may be due
to gold’s short term correlation with equities and October can often be
a brutal month for stocks.
Traders might
be advised to tighten up stop loss positions and or take profits. The
majority of investors should continue to buy and hold as selling and buying
again incurs costs and there is always the risk that October may see gold
strength – especially this year given the very strong fundamentals.
However,
investors who wish to book a profit and were considering selling, for
whatever reason (sometimes out of necessity), would be advised to try and
sell prior to October.
After the
very strong gains in stock markets in recent years there is a real risk of a
stock market correction now and gold could again show short term correlation
with stocks.
Gold in Dollars Daily 20009-2012 – (Bloomberg)
We believe
that while a correction in stocks and gold is quite possible we do not
believe it will be significant for either asset class and the risk of a 16.8%
fall in gold as was seen in October 2008 is quite low.
Should a
correction materialise very strong support will be
seen at the $1,600/oz level.
However, we
think that gold may come under pressure in the run into the U.S. Presidential
election on November 6th and therefore advise caution until early November.
For more
information on gold’s monthly performances over the last 11 years and
over the last 40 years, see our recent blog ‘September And November Best Months To Own
Gold’.
NEWSWIRE
(Bloomberg) -- U.S. Mint Silver-Coin Sales in September Exceed August
Total
The U.S. Mint’s sales of American Eagle silver coins have climbed to
3.125 million ounces this month, according to the Mint’s website.
Sales were
2.87 million ounces for all of August.
(Bloomberg)
-- Fed’s Policy Easing Should Be Bullish Gold, Nomura Says
FOMC’s latest policy easing, on many different fronts, should be
bullish gold, and hence makes Nomura’s year-end target of $2000/oz more attainable, analysts Saeed
Amen and Geoffrey Kendrick says in note yesterday.
●Continued
loose policy by other central banks is also likely to be supportive of gold,
as evidence by outperformance of gold against rest of G-10 since FOMC meeting
●From
tactical basis, Nomura would look to buy on (shallow) dips, in particular
around $1750/oz area, with a $1850/oz target in coming weeks
●Lack
of larger pullback from the highs, even with speculative positioning high,
suggests that short-term sentiment is quite robust
(Bloomberg)
-- Kazakhstan Expanded Gold Reserves for 13th Month in August
Kazakhstan expanded its gold reserves for a 13th consecutive month in August
to the highest since at least 1993 at a time when investors’ bullion
holdings are at a record.
Kazakhstan’s
assets rose 1.4 metric tons to 104.4 tons last month, data on the
International Monetary Fund’s website showed. Turkey’s gold
reserves expanded 6.6 tons to 295.5 tons, Ukraine’s rose 1.9 tons to
34.8 tons and the Czech Republic’s bullion assets fell 0.4 ton to 11.8
tons, the data show.
Central banks
have been expanding reserves after the metal climbed the past 11 years and
investors held a record 2,548.5 tons in bullion-backed exchange-traded
products by yesterday, data compiled by Bloomberg show. Nations bought 254.2
tons in the first half of 2012 and may add close to 500 tons for the year as
a whole, the London-based World Gold Council said earlier this month.
Russia’s
gold holdings increased by 0.1 ton last month to 936.7 tons, the smallest
increase since
April, the
data show. The Kyrgyz Republic and Mongolia also expanded reserves by 0.1 ton
and Mexico reduced them by that amount, the data show. Turkey’s bullion
holdings have increased due to it accepting gold in its reserve requirements
from commercial banks.
Gold accounts
for about 19 percent of Kazakhstan’s total reserves and about 5.7
percent of Ukraine’s, according to the World Gold Council. That
compares with more than 70 percent for the U.S. and Germany, the biggest
bullion holders, the data show.
(Bloomberg)
-- Precious, Base Metals to Outperform Bulks Over Next 6 Mos.: Citi
Excess liquidity from stimulus is likely to be absorbed into commodities that
can be held as investments, collateral or under warehousing deals, Citigroup
says in note.
●Citigroup:
2013 gold price forecast increased to $1,749/oz vs $1,695/oz, platinum and
palladium forecasts are raised by >5% from 2013 onwards
●Base
metal price forecasts are lowered, with copper down 2.9% to $7,965/t for
2013, coking, thermal coal also reduced
●Iron
ore price forecasts remain unchanged, though upside in price is now capped
and with rising $A, margins will continue to be compressed
●Rio
Tinto cut to neutral vs buy on lower margins,
increased uncertainty over outlook for Chinese steel consumption
●BHP
favored on higher returns on capital historically and co. is more prudent
about their cash flows by cutting future capex; PT
raised to 2,200p vs prior 2,100p
●Aquarius
Platinum raised to buy vs neutral, Hochschild, Gem Diamonds upgraded to neutral vs sell
●African
Rainbow Minerals, Anglo American, Exxaro all cut to
neutral in a separate note by Citigroup due to lower commodity price
forecasts; Anglo’s return on equity in 1H was the worst since the 1930s
Cross Currency Table – (Bloomberg)
NEWS
Gold May Advance as Global Stimulus Spurs Demand for
Protection – Business Week
Gold notches slim gains as dollar drifts
– Market Watch
Gold steady as stimulus supports outlook
- Reuters
Silver in ETPs Set for Record as Central Banks
Ignite Demand - Bloomberg
ECB, Bundesbank Checking
Legality Of Bond-Buying Program - CNBC
COMMENTARY
Video: Is Gold Bullion Still a Buy? -
Bloomberg
Video: Look for $2400 Gold in Next Few Years
- Bloomberg
Glittering Opportunities In Gold
– Financial Review
Transparency – Silver - SilverSeek
There Is A War Going On In The Gold & Silver
Markets – King World News
Mark
O’Byrne
Goldcore
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