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Gold
and silver remain supported by continuing macroeconomic and geopolitical
uncertainty. Inflation, the European sovereign debt crisis, conflict in Libya
and the wider Middle East and the nuclear disaster in Japan are all factors
which will likely result in gold reaching new record nominal highs in all
currencies sooner rather than later.
 
Gold
and silver's record highs yesterday were barely reported in the non-financial
press and media yesterday which is another sign of the lack of animal spirits
and popular participation in the bullion markets and one of many strong
indications that gold and silver remain far from the speculative bubbles
suggested by some.
The US
dollar and Swiss franc are down 1% and 2.5% respectively so far on the week
while sterling and the yen have fallen nearly 2% against gold in the week so
far.
People's
Bank of China Favours Gold Over Euro, Dollar and Paper Currency due to 'Value
Preservation'
The
People's Bank of China are very positive on gold in their just-released
annual Financial Markets Report. They remain concerned about risks posed to
fiat currencies such as the dollar and euro, about asset price bubbles
internationally and the risk competitive currency devaluations poses to fiat
currencies.
The
report is much more positive than last year when they appeared to talk down
gold's prospects somewhat. Skeptics suggested that this was in order to allow
them to continue accumulating gold without the price running away from them.
The
Chinese central bank said that inflation risks in economies internationally
will support demand for gold, with prices for the precious metal likely to
continue to make record highs.
While
the risks of falling gold prices shouldn't be ignored, political conflict is
likely to support higher gold prices.
Inflation
risks mean demand for gold will remain strong and investment demand from a
'value preservation' angle will be very strong supporting gold at higher
levels.
It
said it is considering allowing more foreign financial institutions and
companies to participate in China's interbank bond market, beyond
international development agencies, and it is studying gradually opening the
country's gold and futures markets to overseas yuan holders.
The
Chinese are clearly attempting to position their central bank, the PBOC, as a
powerful rival to the Federal Reserve and their yuan/ renminbi as an
alternate reserve currency.
Senior
and influential Chinese policy makers, bankers and government officials have
clearly stated why they see gold as an important currency reserve and
monetary asset. The PBOC and possibly SAFE are likely to be buying all dips
aggressively and providing significant demand and massive support to the gold
(and possibly even the silver) market.
The
record demand for gold as a store of value from the Chinese people is being
emulated by their increasingly powerful central bank and other financial
institutions which is another bullish factor for gold.
Gold
Gold
is trading at $1,435.10/oz, €1,015.86/oz and £891.87/oz.
Silver
Silver
is trading at $37.47/oz, €26.52/oz and £23.29/oz.
Platinum
Group Metals
Platinum
is trading at $1,752.00/oz, palladium at $747.00/oz and rhodium at $2,350/oz.
News
(MNI)
- China PBOC Sees Dollar Weakness, European Debt Risk In 2011
The U.S. dollar is generally expected to weaken this year, even if the
European debt crises provide some temporary support, the People's Bank of
China said in its 2010 international financial market report issued Friday.
The
125-page report provided a broad outlook for global markets in the year
ahead, cautioning that the economic recovery will be dogged by the debt
crises on Europe's periphery. "The recovery momentum of the world
economy will continue, but all parties should enhance policy cooperation and
avoid competitive currency depreciation and trade protectionism," the
report said.
The
central bank also warned on inflation risk rising from crude oil, grain and
other commodity prices. Global commodity prices still have room to rise, the
bank said, though gold's recent record prices prompted a warning of the risk
that prices could fall in the period ahead.
The
U.S. dollar will be "generally weak" this year as a result of the
slow U.S. economic recovery, low interest rates as well as the trade and
current account deficits.
"However,
the risks from European sovereign debt still remain and geopolitical risk may
spread, which will give the U.S. dollar temporary strength," it said.
Short-term interest rates in the major economies will rise this year, though
the increase will be capped by the weak recovery momentum. The
medium-to-long-term treasury yields of the major economies will also rise.
Major
economies will find it difficult to bring their debt levels under control
this year as a result of economic weakness and fragile financial systems.
The
PBOC also said it will boost capital account convertibility and broaden the
channels by which capital flows on and offshore. It said that the domestic
interbank and futures markets could be further opened up to foreign portfolio
investment.
(Bloomberg)
-- Gartman Won't Short Stocks As Silver Outperforms Gold
Newsletter writer Dennis Gartman says silver outperforming gold “tends
to pull” all risk assets higher; won't short indexes as silver
outperforms gold. For chart of silver/gold ratio vs S&P 500: {AVAT 0
68004814 } Gartman to buy gold at $1395-1405,
[Editor's
Note: Gartman has been negative on silver for a while and recently said it
was ridiculously overbought when silver was below $36/oz. With regard to
precious metals, he does not have a good record of “timing the
market” in recent years and given rising volatility in all markets
investors would be prudent to maintain a buy and hold strategy.]
(Bloomberg)
-- UBS Favors Oil, Platinum, Lead, Palladium, Neutral on Copper
UBS AG is favoring crude oil, platinum, lead and palladium over the next
three to six months. The previous favorites copper, coal and iron ore are now
“neutrally rated” while nickel, steel, uranium and aluminum are
the least preferred, UBS analyst Peter Hickson said in a report dated today.
[Editor's
Note: UBS Precious Metals division are currently bullish on gold and silver
and bearish on palladium and platinum]
(Bloomberg)
-- 'Black Swan' Creates Gold Buying Opportunity in Selloff: TD
“Black swan” events are likely to create buying opportunities for
gold as the metal declines in the short term on uncertainty, TD Securities
says in a note to clients.
“Based
on the last three major episodes of elevated market uncertainty, a future
“black swan event” that threatens the global economy and
financial system stability is likely to trigger another short-lived gold
selloff”: TD
“The
metal should perform well longer-term, especially if U.S. and other monetary
authorities monetize the shock”: TD
TD
defines black swan as: “an event or occurrence that deviates beyond
what is normally expected of a situation, and that would be extremely
difficult to predict”
(Bloomberg)
-- Gold May Advance on Libya, Europe Debt Concern, Survey Shows
Gold may extend gains from a record as fighting in Libya and Europe's debt
crisis spur demand for an alternative investment, a survey found.
Seventeen
of 19 traders, investors and analysts surveyed byBloomberg, or 89 percent,
said bullion will rise next week. Two predicted lower prices.
Gold
for April delivery was up 2.2 percent for this week at $1,446.70 an ounce at
12:23 p.m. yesterday on the Comex in New York after reaching a record
$1,448.60 earlier that day.
U.S.
and allied warplanes carried out further strikes against Muammar Qaddafi's
ground forces as the leader's loyalists increased their attacks on cities. Portugal
moved closer to a bailout after Prime Minister Jose Socrates's offer to
resign left his government in limbo as European Union leaders try to address
the region's debt crisis.
“The
market got a boost from ongoing violence in the Middle East and North Africa
region,” said Andrey Kryuchenkov,an analyst at VTB Capital in London.
European debt “troubles” linger, and “as far as gold is
concerned, it is exactly such fears that drove bullion higher late last
year,” he said.
The
attached chart tracks the results of the Bloomberg survey, with the red bars
derived by subtracting bearish forecasts from bullish estimates. Readings
below zero signal that most respondents expect a decline. The green line
shows the gold price. The data are as of March 18.
The weekly
gold survey that started more than six years ago has forecast prices
accurately in 202 of 355 weeks, or 57 percent of the time.
This
week's survey results: Bullish: 17 Bearish: 2 Neutral: 0
(Financial
Times – Print Edition) -- Small-time gold miners get fair trade seal of
approval
We have got used to the taste of Fairtrade coffee, chocolate or sugar and
know all the good reasons why we should buy it.
(Financial
Times – Print Edition) --Turbulent times take a toll on optimism
Amid the good cheer among the world's watch and jewellery makers at
Baselworld, and depending on geopolitical events in Japan and north Africa.
(Financial
Times – Print Edition) -- Precious pieces lost in cash-for-gold rush
You don't take a piece of Van Cleef and melt it. That's like burning a
Picasso for the frame," laments Tobina Kahn, vice president of House
Mark O’Byrne
Goldcore
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