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Gold’s London AM fix this morning was USD
1,641.25, EUR 1,241.49, and GBP 1,019.54 per ounce. Yesterday's AM fix was
USD 1,638.75, EUR 1,244.68and GBP 1,014.83 per ounce.
Silver is trading at $30.94/oz,
€23.41/oz and £19.21/oz. Platinum is
trading at $1,551.00/oz, palladium at $669.30/oz and rhodium at $1,350/oz.
Gold rose $3.00 or 0.18% in New York yesterday and
closed at $1,641.20/oz. Gold traded sideways in Asia and then ticked higher
in European trading prior to seeing some weakness.
Cross Currency Table – (Bloomberg)
Gold has been in an incredibly tight range - hovering
around the $1,640/oz level this morning as markets
await the US Federal Reserve’s decision regarding maintaining ultra loose monetary policy and further quantitative
easing (QE3).
The Fed is due to release a statement outlining its
views on policy and the economy at about 1630 GMT, followed by a news
conference by Fed Chairman Ben Bernanke.
The Fed is expected to reiterate its stance to keep
U.S. interest rates near zero over the next two years, which will continue to
make gold an attractive inflation hedging asset.
Bullion struck its 2012 high around $1,790/oz in late February after the Fed said it would keep
interest rates near zero until at least the end of 2014.
Gold’s most recent sell off was precipitated on
February 29th after heavy selling was seen when Bernanke suggesting that
there would be no more QE.
The renewed almost exclusive focus on gold in US dollar
terms in recent weeks is obscuring the fact that gold appears to have
corrected and consolidated in other major currencies since August 2011.
The multi currency gold chart
below shows how gold appears to be very well supported at $1,545/oz, €1,200/oz and at
£1,000/oz.
Gold 1 Year in USD-White, EUR-Orange) and GBP-Yellow -
(Bloomberg)
This chart is not indicative of a bubble bursting in a
liquid trade-able asset. Such bubbles are characterised
by sharp parabolic moves up in price followed by equally if not faster price
collapses.
Non US investors and buyers of
gold should continue to focus on gold in local currency terms.
Indian Festival Demand Not Spectacular But Robust
From the
world’s largest gold importer, India, there are mixed reports regarding
spending on gold at this year's Hindu and Jain holy festival of Akshaya Tritiya.
India’s majority Hindus are celebrating Akshaya Tritiya today, the
second-biggest gold buying day. 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.
Akshaya Tritiya is the second-biggest
gold-buying festival after Dhanteras in India,
where the level of demand can have an effect on global prices.
Some Indian media report that there has been robust and
'sustained' demand from investors and retailers (see below). However, other
media reports say that demand has been somewhat less when compared to the
usual splurge, as families struggle with rising expenses and high prices for
the revered spiritual metal.
Gold bullion buying was robust elsewhere in Asia with
demand reported in Indonesia and Thailand.
Goldman Sachs Gold ETF in India Sees 11 Fold Surge in
Volume
Trading in
Goldman Sachs Group Inc.’s gold ETF in India surged almost 11 fold,
leading an advance in gold securities, as investors bought gold to mark the
auspicious Hindu festival of Akshaya Tritiya.
Volumes in GS Gold BeEs,
India’s biggest exchange-traded fund backed by gold, was 937,816 units
on the National Stock Exchange of India Ltd. at 4:54 p.m. in Mumbai, up from
85,376 units yesterday and more than the 101,914 average daily volumes in the
last six months through yesterday, according to data compiled by Bloomberg.
This is significant volume. Each unit represents about
1 gram of physical gold and therefore 937,816 units is the equivalent of some
29,170 ounces of gold which at today’s prices is some $47 million of
daily volume for just one gold ETF in India.
The Goldman Sachs India gold ETF is just one of many
new ETFs in India.
Trading in Kotak Gold ETF
jumped more than eightfold to 226,032 units.
Gold demand in India, the world’s biggest
importer, may climb as much as 25% to 15 metric tons on Akshaya
this year, according to Rajesh Exports Ltd., the country’s biggest
gold-jewelry exporter.
Assets held by local gold funds reached a record 98.9
billion rupees ($1.87 billion) at the end of March, according to the
Association of Mutual Funds in India. GS Gold BeEs
had assets worth 29.6 billion rupees (some $563 million (USD)) as of March
31, data from the association showed.
Trading in UTI-Gold Exchange Traded Fund climbed more
than fivefold, while volumes in Reliance Gold ETF, the
second-biggest fund, was up more than sixfold,
data shows.
There is the possibility that some of India’s
traditional demand for jewellery and bullion may be
being channelled into these new financial
instruments.
However, India’s cultural affinity with physical
gold will continue and the brides of India will always prefer jewellery and physical in hand to the ETFs of Goldman
Sachs or other product providers.
Argentina Increases Gold Reserves by 13% - From 54.74
to 61.74 Tonnes
Argentina increased its gold reserves by 13% in
September 2011. Latin America's third largest economy added some 7 tonnes of gold to its holdings, bringing its reserves to
61.74 tonnes in September last year.
Argentina added to its gold reserves as the price began
to retreat from record highs.
Argentinian government officials have confirmed the IMF
data reporting the country's first such purchase in six years - it was the
first addition by Buenos Aires to its gold reserves since February 2005,
according to the IMF's monthly international finance statistics report.
Argentina has a bitter experience of currency
devaluation and has learned the hard way the value of gold as a safe haven
currency.
Argentina's economic growth slowed to its lowest level
in more than two years in February and inflation is very high at 10%.
Credit ratings agency Standard & Poor's on Monday
cut its assessment of the outlook for Argentina's foreign debt to negative,
citing policies that include a government push to seize control of energy
company YPF from Spain's Repsol.
Resource and economic nationalism is clearly on the
rise and the risk of trade, economic and currency wars and geopolitical risk
in general are risks that markets remain highly complacent about.
OTHER NEWS
(PTI) -- Gold surges on 'Akshaya Tritiya', silver gains
Gold prices soared at the bullion market on the sustained demand from
investors and retailers amidst festive spirit of 'Akshaya
Tritiya' where buying precious metals, especially
gold, is considered auspicious.
Silver also recovered modestly on back of stray buying
support from speculators.
Standard gold (99.5 purity) spurted by Rs 250 to finish at Rs 28,885
per 10 gm from Monday's close of Rs 28,635.
Pure gold (99.9 purity) also climbed by Rs 255 to end at Rs 29,025 per
10 gm from Rs 28,770.
Silver ready (.999 fineness) moved up by Rs 60 per kg to close at Rs
56,750 as compared to Rs 56,690 previously.
Meanwhile, in New York gold fell on concerns over Eurozone political
developments and lower manufacturing data from China. Gold for June delivery
dropped USD 10.20 to USD 1,632.60 an ounce on the Comex
division of the NYMEX late yesterday.
(Bloomberg) -- Gold Futures in Shanghai Advance for
First Time in Three Days
Gold for
December delivery climbed for the first time in three days on the Shanghai
Futures Exchange, gaining as much as 0.5 percent to 336.55 yuan a gram. It traded at 336.44 yuan
at 9 a.m. Singapore time, rebounding from its drop to a two-week low
yesterday. On the Shanghai Gold Exchange, bullion of 99.99 percent purity,
the benchmark cash contract, was little changed at 334 yuan
a gram.
NEWS
Gold perched at $1641 on equities, all eyes on Fed - Reuters
Gold May Extend Climb Alongside Equities on U.S.
Data, Earnings - Bloomberg
'Real' trading in U.S. markets is down to 16
percent; Rest is machines – Financial Times
Central Banks Beef Up Gold Reserves In March
– Equities.com
Soros Compares Euro-Zone Crisis to Soviet Collapse
– Wall Street Journal
COMMENTARY
Euro Will Go Way Of Most Monetary Unions; It Will
Break Up – David McWilliams
Faber: Imminent Market Crash, a Recession in China,
Says Fiscal Condition of US a "Catastrophe" – Mish’s Global Economic Trend Analysis
Bryan - Asia To Deploy Stunning & Massive QE
– King World News
ESM Will Supply Whatever Money Is Needed In Euroland – Jim Sinclair’s MineSet
Steve Keen On Europe's Delusion And Why The Entire
World Is Turning Japanese – Zero Hedge
The Gold Megathrust
– Resource Investor
Is Gold Still Cheap? – 24HGold
For breaking news and commentary on financial markets
and gold, follow us on Twitter.
Mark
O’Byrne
Goldcore
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