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Today’s AM fix was USD 1,663.00, EUR 1,269.37
and GBP 1,036.65 per ounce.
Yesterday’s AM fix was USD 1,663.50, EUR 1,272.37 and GBP 1,035.35 per ounce.
 
Cross Currency Table
– (Bloomberg)
Gold edged off $0.80 or 0.05% in New York yesterday and closed at
$1,657.40/oz. Silver climbed to $30.57 in Asia then slipped back to $30.05 by
late morning in New York, but it also rallied back higher in afternoon trade
and finished with a loss of just 0.07%.
Gold, 1 Month Chart
– (Bloomberg)
President Barack Obama will nominate White House Chief of Staff Jack Lew
tomorrow as his choice for Treasury secretary, replacing Timothy F. Geithner.
Lew’s nomination as Treasury secretary is subject to Senate
confirmation.
Gold
inched higher on Thursday, as market watchers await a rate decision by the
European Central Bank at 12.45 GMT. European Bank Chief, Mario Draghi’s news conference is at 1330 GMT. Investors
will also view the Bank of England rate decision at 1200 GMT.
U.S. weekly Initial Jobless Claims are out at 1330 GMT.
Most
economists feel that the ECB will leave rates unchanged and continuing ultra loose monetary policies for gold bullish,
especially in euros.
XAU/EUR,
1 Month – (Bloomberg)
German industrial output figures came in less than forecast and rose less
than forecast which showed contraction in Europe’s largest economy in
Q4.
The
Japanese yen was at a 2 1/2-year low today on expectations that the Bank of
Japan policy will take a new approach to boost inflation later this month.
The U.S. government may default on
its debt in 38 days or as soon as February 15, half a month earlier than
widely expected, according to a new analysis adding urgency to the debate
over how to raise the federal debt ceiling.
The analysis came courtesy of the Bipartisan
Policy Center (BPC), which released a revised
“debt limit analysis.”
"If we reach the X Date and Treasury is
forced to prioritize payments, handling payments for many important and
popular programs will quickly become impossible, causing disruption to an
already fragile economic recovery," said Steve Bell, Senior Director of
the Economic Policy Project at BPC.
The government hit the $16.4 trillion
statutory debt limit on Dec. 31, but the Treasury Department is able to
undertake a number of accounting schemes to delay when the government runs
into funding problems.
The Treasury has said that the accounting
schemes, known as “extraordinary measures,” ordinarily would
forestall default for about the first two months of the year, though officials
were clear that
they could not pinpoint a precise date because
of an unusual amount of uncertainty around federal finances.
If Congress does not raise the debt ceiling by
the deadline, the White House has said that the nation probably will default.
In a previous episode — in the summer of 2011 — officials
determined that the best course would be to withhold all of a given
day’s federal payments until enough money became available to pay them.
XAU/JPY, 1 Month – (Bloomberg)
The consequences of an immediate 40% cut to
government services would be brutal. Practically all government employees
would suddenly see their pay checks go to zero. The government would only
have enough money to pay Social Security checks and Medicaid providers on
certain days. The U.S. defence budget would collapse which could lead to
considerable geopolitical uncertainty.
The risk of a U.S. default next month or in
the coming months and more importantly the appalling U.S. fiscal situation
and indeed the appalling fiscal situation of Japan, the UK and many European
nations shows the importance of having an allocation to gold in a portfolio.
Adrian Ash
Adrian Ash is head of research at BullionVault – the secure, low-cost gold and silver
market for private investors online, where you can buy gold and silver
vaulted in Zurich on just 0.5% dealing fees.
(c) BullionVault 2012
Please
Note: This article is
to inform your thinking, not lead it. Only you can decide the best place for your
money, and any decision you make will put your money at risk. Information or
data included here may have already been overtaken by events – and must
be verified elsewhere – should you choose to act on it.
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