Gold’s London AM fix this morning was USD 1,646.50,
EUR 1,258.41, and GBP 1,030.80 per ounce. Friday's AM fix was USD 1,652.00,
EUR 1,255.51 and GBP 1,035.54 per ounce.
Silver is trading at $31.61/oz,
€24.16/oz and £19.78/oz. Platinum is
trading at $1,577.25/oz, palladium at $656.90/oz and rhodium at $1,350/oz.
Cross Currency Table – (Bloomberg)
Gold fell $1.50 or 0.09% in New York and closed
relatively unchanged at $1,650.20/oz yesterday.
Gold traded sideways prior to gradually creeping up in late Asian trading. It
then gave up those gains in European trading and is nearly unchanged from
yesterday’s close in New York.
Gold remained relatively unchanged from yesterday as
Spain’s debt auction eased some worries about the eurozone
debt crisis. Although this is another temporary respite as the euro may
remain under pressure ahead of Madrid’s long term debt sale later this
week.
Investors appear more focused on Europe even though US
industrial output numbers and housing starts were low. A surprise jump in
German business sentiment lifted riskier assets including equities.
Gold 1 Year Chart – (Bloomberg)
India’s central bank is further debasing the
Indian rupee which will lead to further safe haven demand for gold, and is
still the world’s largest buyer of gold.
India has had its first rate cut in 3 years and was cut
by a higher than expected 50 basis points to 8%.
This comes despite inflation being higher in March
compared to last month surging to 9.47%.
The recent tax increase on gold was a futile attempt to
curtail gold demand – as Indian policy makers realised
accelerating inflation would lead to further gold demand.
Wedding season is at its peak in India now and Akshaya Tritiya, a large gold
buying festival, happens later this month. There are forecasts of a 25%
increase in demand during the Hindu festival next week after demand was
curtailed during the gold jewellers strike (see
Other News below).
Deepening negative real interest rates in India and the
risk of an inflation spiral will see Indian demand remain robust and it may
even accelerate if inflation deepens - contrary to suggestions that Indian
gold demand will fall precipitously.
IMF: Risk of Collapse of Euro and “Full Blown
Panic in Financial Markets”
The
Eurozone could break up and trigger a “full-blown panic in financial
markets and depositor flight” and a global economic slump to rival the
Great Depression, the IMF warned yesterday.
In its World Economic Outlook report, the International
Monetary Fund said the collapse of the crisis-torn single currency could not
be ruled out.
It warned that a disorderly exit of one member country
would have untold knock-on effects.
"The potential consequences of a disorderly
default and exit by a euro area member are unpredictable... If such an event
occurs, it is possible that other euro area economies perceived to have
similar risk characteristics would come under severe pressure as well, with full-blown
panic in financial markets and depositor flight from several banking
systems," said the report.
"Under these circumstances, a break-up of the euro
area could not be ruled out."
“This could cause major political shocks that could
aggravate economic stress to levels well above those after the Lehman
collapse," said the report.
Risk Averse Central Banks Favour
Gold Over Euro
The risks
outlined by the IMF are real and are being taken seriously by central banks who are becoming more favourable
towards diversifying foreign exchange reserves into gold.
Central bank reserve managers responsible for trillions
of dollars of investments are shunning euro assets and questioning the
currency’s haven status because of the region’s sovereign debt
crisis, research has found, according to the FT.
Among the most conservative of investors, central
bankers have tended to keep much of their fx
reserves in high quality euro and dollar denominated assets, such as
government bonds.
However, a survey of reserve managers at 54 central
banks responsible for portfolios worth $6 trillion, almost half the
world’s total, signals that the sovereign debt crisis has sparked a
reversal of that trend.
More than three-quarters said the sovereign debt crisis
has had a profound impact on their reserve management strategy, with their
central banks pulling back from eurozone
counterparties and reconsidering attitudes toward the single currency.
Signifying the mood of caution among the world’s
central bankers, 71% of those polled said gold was a more attractive
investment than it had been at the start of last year. Central banks made
their largest purchases of gold in more than four decades last year and have
continued to buy the precious metal in the early months of 2012.
Central bank demand is set to continue and may
accelerate as the global debt crisis deepens in the coming months.
For breaking news and commentary on financial markets
and gold, follow us on Twitter.
XAU/GBP 1 Year Chart – (Bloomberg)
OTHER NEWS
(Bloomberg) -- Hindu Festival Seen Reviving Gold Demand in India After
Shutdown
Gold demand in India, the world’s biggest importer, may climb as
much as 25 percent during a Hindu festival next week, according to Rajesh
Exports Ltd., reviving jewelry buying that was
curtailed by a nationwide shutdown.
Consumption may increase to as much 15 metric tons on Akshaya Tritiya on April 24,
said Rajesh Mehta, chairman of Rajesh Exports, India’s biggest gold
jewelry exporter. The festival is considered by the majority Hindu population
in the South Asian nation as an auspicious day to buy precious metals.
Imports plunged last month after Finance Minister Pranab Mukherjee raised taxes to curb a widening
current-account deficit fuelled by record bullion purchases. The National
Spot Exchange Ltd., India’s biggest bourse for physical gold, expects
its festival coin sales to double from a year earlier, according to Chief
Executive Officer Anjani Sinha.
“People will buy a lot of gold this Akshaya Tritiya,” Rajesh
Exports’ Mehta said. “We expect sales to be good, especially
because of the strike” and the pent-up demand from the shutdown, he
said.
Jewelers closed stores for three weeks in the
longest-ever shutdown, curbing imports, after Mukherjee doubled import levies
on gold and imposed a 1 percent excise duty on non-branded ornaments. The
shutdown ended on April 6 after the government assured jewelers’ that
their concerns on taxes will be considered. The strike cost the industry
about 200 billion rupees ($3.9 billion) in lost revenue, according to the All
India Gems & Jewellery Trade Federation.
‘Kickstart
Momentum’
The Akshaya Tritiya “will kickstart
momentum to slack imports,” Kunal Shah, head
of research with Nirmal Bang Commodities Pvt., said
from Mumbai. “It will support the ongoing bull run in gold.”
During Akshaya, a Sanskrit
word meaning “that which never diminishes,” Indians begin a new
venture or buy valuables with the belief it will bring luck and prosperity.
Based on the lunar calendar, the date changes every year. It is the
second-biggest gold buying day in the country after Dhanteras,
according to fund manager Quantum Asset Management Co.
Bullion for immediate delivery rose 0.2 percent to $1,652.82
an ounce at 9:08 a.m. in Mumbai today. The June- delivery contract fell 0.3
percent to 28,482 rupees ($554) per 10 grams on the Multi Commodity Exchange
of India Ltd. yesterday. Gold has advanced 5.6 percent this year, adding to
11 consecutive annual gains buoyed by central bank buying and increased haven
demand driven by Europe’s sovereign-debt crisis.
Competitive Asset
“Gold is very competitive in its asset
class,” said Anindya Mitra,
senior vice president of retail liabilities at HDFC Bank Ltd., the
second-largest coins seller among Indian banks. “We are looking at
doing good business this year.”
Coins sales may be 10 percent to 15 percent higher on
the festival day from a year ago after HDFC increased outlets and on
investment demand, Mitra said.
The national exchange has 1,700 orders for coins for
delivery on Akshaya Tritiya,
or about 25 kilograms worth of bullion, National Spot Exchange’s Sinha said. Demand will double to as much as 34 kilograms
from 17 kilograms last year, he said.
“It is a special occasion, demand will be very
good,” Sinha said. “People don’t
expect the price to go down from here.”
India’s gold imports may fall to 700 tons to 800
tons in 2012, Prithviraj Kothari, president of the
Bombay Bullion Association, said April 2. That compares with record purchases
last year of 969 tons, according to World Gold Council data.
XAU/EUR Currency Chart – (Bloomberg)
(Bloomberg) -- Comex, Nymex Metals Delivery Issues, Stops for April 16
Following
is a table detailing daily issues and stops related to deliveries of metals
against expiring contracts traded on the Comex or
the New York Mercantile Exchange for April 16, according to CME Group Inc.
The notices reflect the movement of metals to offset
each long or short futures position with supplies held in exchange- monitored
warehouses. Issuers are making deliveries, and stoppers are taking
deliveries.
April 16 April 13 April 12 April 11 April 10 April 9
2012 2012 2012 2012 2012 2012
-------------------------- Gold
-------------------------------
Issues/stops 794 6 1,040 95 1 37
Month to date 4,475 3,681 3,675 2,635 2,540 2,539
April 16 April 13 April 12 April 11 April 10 April 9
2012 2012 2012 2012 2012 2012
-------------------------- Gold -------------------------------
Settlement 1,648.7 1,659.1 1,679.5 1,659.0 1,659.5
1,642.5
Delivery date 04/18/12 04/17/12 04/16/12 04/13/12
04/12/12 04/11/12
Contract April 2012 April 2012 April 2012 April 2012
April 2012April 2012
--------------------------Copper--------------------------
Issues/stops 182 1,000 51 205 31 56
Month to date 2,795 2,613 1,613 1,562 1,357 1,326
Settlement 3.6240 3.6230 3.7165 3.6360 3.6460 3.7160
Delivery date 04/18/12 04/17/12 04/16/12 04/13/12 04/12/12
04/11/12
Contract April 2012 April 2012 April 2012 April 2012
April 2012April 2012
-------------------------- Silver
----------------------------
Issues/stops 54 0 0 0 0 0
Month to date 227 173 173 173 173 173
Settlement 31.364 31.380 32.515 31.511 31.670 31.513
Delivery date 04/18/12 04/17/12 04/16/12 04/13/12
04/12/12 04/11/12
Contract April 2012 April 2012 April 2012 April 2012
April 2012April 2012
April 16 April 13 April 12 April 11 April 10 April 9
2012 2012 2012 2012 2012 2012
---------------------------Platinum----------------------------
Issues/stops 25 0 0 3 0 0
Month to date 508 483 483 483 480 480
Settlement 1,571.70 1,583.40 1,601.50 1,579.80 1,589.20
1,613.60
Delivery date 04/18/12 04/17/12 04/16/12 04/13/12
04/12/12 04/11/12
Contract April 2012 April 2012 April 2012 April 2012
April 2012April 2012
--------------------------Palladium----------------------------
Issues/stops 1 0 0 0 0 0
Month to date 2 1 1 1 1 1
Settlement 649.75 646.25 652.15 635.65 635.90 642.85
Delivery date 04/18/12 04/17/12 04/16/12 04/13/12
04/12/12 04/11/12
Contract April 2012 April 2012 April 2012 April 2012
April 2012April 2012
SOURCE: CME Group Inc.
(Bloomberg) -- Gold May Advance to $1,800 in 12 Months,
Trinity’s Gurdgiev Says
Gold
probably will advance to $1,800 an ounce in 12 months on a negative outlook
for the European economy and China’s real estate sector, according to Constantin Gurdgiev, an
economist at Trinity College in Dublin.
“I can see a rather bullish scenario for gold in
the short-to-medium term,” said Gurdgiev, who
is also a non- executive member of the investment committee at GoldCore Ltd., a Dublin-based brokerage that sells and
stores everything from quarter-ounce British Sovereigns to 400-ounce bars.
Bullion was little changed at $1,651 an ounce by 9:22
a.m. in London, for a 5.6 percent gain this year. The price may be driven
higher by Europe’s sovereign debt crisis and a slowdown in
China’s real-estate sector, Gurdgiev said in
an interview in Moscow on April 13, while stressing that other scenarios are
possible.
The global economy by 2014 may have started a cycle of
growth accompanied by inflation, increasing demand for gold as a means of
protecting wealth, pushing the price to more than $2,200 an ounce, Gurdgiev said.
“Heightened inflation prospects” will be
driven by expectations of stronger demand for commodities and a large- scale
liquidity withdrawal in Europe and Japan, according to Gurdgiev.
NEWS
Gold edges up; fragile euro weighs -
Reuters
Perth Mint sales fall on return of stability
– The Sydney Morning Herald
IMF: Euro Break-Up Cannot Be Ruled Out
– Sky News
Euro currency could collapse and trigger another
Great Depression, IMF warns for the first time –
The Daily Mail
Central Banks Snub Euro Assets, Favour
Gold – The Financial Times
COMMENTARY
Could France Leave the Euro? Some Depositors Think So
- Bloomberg
Cramer: Why Gold Remains Compelling - The Street
A Return to the Gold Standard, or Gold Behind
Currencies - GoldSeek
Martenson: "The Trouble With Money"
– Zero Hedge
Mark
O’Byrne
Goldcore
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