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Gold’s London AM fix this morning was USD
1,652.00, EUR 1,255.51, and GBP 1,035.54 per ounce. Friday's AM fix was USD
1,648.25, EUR 1,266.03 and GBP 1,040.69 per ounce.
Silver is trading at $31.72/oz,
€24.15/oz and £19.88/oz. Platinum is
trading at $1,568.68/oz, palladium at $650.20/oz and rhodium at $1,350/oz.
Cross Currency Table – (Bloomberg)
In volatile trade in New York yesterday, gold rose
sharply prior to falling and ended $4.40 lower or 0.27% and closed at
$1,651.70/oz. Gold initially took a dip in Asia and then recovered losses by
the time European trading opened and has ticked higher.
Gold’s safe haven appeal is gradually rekindling
as concerns deepen about Spain and the other periphery eurozone
economies and a realisation that the eurozone debt crisis is far from over.
With the situation in Europe and globally set to
deteriorate, the lacklustre demand of recent weeks,
particularly in western markets may change to renewed robust physical demand.
There are signs of this already with inflows into
gold-backed exchange traded products the most in five weeks last week, and
silver holdings in the iShares Silver Trust, the
biggest ETF backed by silver, rose 45.3 metric tons yesterday alone to
9,636.69 tons.
Gold 1 Year Chart – (Bloomberg)
This demand should support bullion prices at these
levels and there is support at $1,600/oz. There is extremely strong support
above the $1,500/oz level after prices consolidated
between $1,500/oz and $1,800/oz
since last September.
Spain T-Bill yields jumped at auction, meaning
short-term debt costs surged higher despite strong demand. Spain is to use
the used and abused cliché “too big to bail” and the scale
of the problem is so huge that most realistic observers warn that we remain
in the early stages of this crisis.
The US Fed policy meeting next week may clarify the
Fed’s ostensible position regarding further QE.
The weaker than expected March unemployment report is
leading to further Wall Street demands for more stimulus plans. Wall Street
and its institutions’ addiction to debt is
leading to the continuing debasement of the dollar. Further QE is almost
inevitable which will support gold.
US housing starts for March are released at 12.30 GMT
which may lead to speculative price movements.
"People Have Lost Faith In the 20th Century
Religion Of Government Backed Fiat Money"
Matthew Bishop, the US Editor of The Economist, has
been interviewed by the Wall Street Journal TV about gold and why
“people have lost faith in the 20th century religion of government
backed fiat money."
He says that he has become an agnostic or an atheist
with regard to his belief in government-backed money as he fears that
governments are in a position whereby they are going to debase currencies
such as the “paper dollar and “paper euro” “in a big
way.” Gold becomes one of the “alternative religions” in
that environment.
History shows that a deleveraging downturn takes a long
time and can take 7 or 8 years. Inflationary pressures are building and will
be seen in the second half of the cycle, according to Bishop.
Bishop says he would put some of his money into gold
but is prohibited from this due to the investment policies of The Economist.
He advocates owning gold as a “portfolio of
money” and diversification and advocates having 5% to 10% of
one’s money in gold.
Bishop is reluctant to give price predictions but
believes gold will be higher at the end of the year and higher in 5 years.
The Economist magazine has a strong Keynesian bias and
has been one of the most anti-gold publications in the world with many
simplistic, unbalanced and ill-informed articles.
There have been a few more nuanced and balanced
articles pointing out gold’s safe haven qualities primarily by
“Buttonwood” however most coverage of gold has been negative.
The publication has suggested on many occasions since
2008 that gold is a bubble. Clients of GoldCore have
told us that they were prompted to sell their gold bullion as long ago as
2009 after reading such articles in The Economist.
Indeed, there has often been a suggestion that those
who buy gold are irrational “gold bugs” who
are anti-technology and anti-progress. Indeed, some who have bought gold have
been framed as “doom and gloom” merchants who are hoping for a
collapse of the financial and monetary world so that they can profit from
their dramatically revalued gold.
The Economist’s US Editor’s conversion and
growing belief in gold as money and a superior form of money is an important
development and is another step towards gold moving from the fringe to the
mainstream.
It is another step towards gold being accepted,
respected and trusted as a safe haven asset and safe haven finite currency.
For breaking news and commentary on financial markets
and gold, follow us on Twitter.
OTHER NEWS
(Bloomberg)
-- iShares Silver Holdings Jumped 45.3 Metric Tons
Yesterday
Silver holdings in the iShares Silver Trust, the
biggest exchange-traded fund backed by silver, rose 45.3 metric tons
yesterday to 9,636.69 tons, according to figures on the company’s
website.
(Bloomberg) -- ETF Securities Says Gold ETP Inflows
Were Most in Five Weeks
ETF
Securities Ltd. said inflows into its gold-backed exchange traded products
was the most in five weeks last week.
(Bloomberg) -- Shanghai Futures Exchange Announces
Silver Contract Draft Plan
The
Shanghai Futures Exchange announced a draft plan for a silver contract,
setting daily trading limits at 5 percent and margins at 7 percent, according
to an e-mailed statement from the bourse.
Trading lot size was set at 15 kilograms, according to
the statement. The draft plan was published to solicit public feedback,
according to the statement, without saying when the contract would start
trading.
(Bloomberg) -- Cash Gold, Futures in Shanghai Rebound
from Yesterday’s Drop
Gold for
December delivery on the Shanghai Futures Exchange opened 0.6 percent higher
at 337.64 yuan a gram, rebounding from a 2 percent
decline yesterday. Cash bullion of 99.99 percent purity on the Shanghai Gold
Exchange climbed 0.8 percent to 338 yuan a gram at
9:01 a.m. Singapore time, after dropping 1.6 percent yesterday.
(Bloomberg) -- India's RBI Toughens Rules for Credit to
Gold-Loan Non-Banks
India's central bank increased regulatory rules for bank credit to finance
companies that take gold as collateral.
Banks have been asked to reduce their regulatory
``exposure ceiling'' in a single non-bank finance company having gold loans
to the extent of 50 percent or more of its financial assets to 7.5 percent
from 10 percent, Reserve Bank of India said in a statement in Mumbai today.
The limit will be 12.5 percent if the additional
lending is on account of ``fund on-lent'' by the finance company to build
ports, power plants and roads, according to the statement.
(Bloomberg) -- Peru’s Gold Export Revenue Jumps
46% to $963 Million in February
Peru’s
gold-export revenue jumped 46 percent in February as prices and shipments
rose from a year earlier, the central bank said. Gold sales of 551,700 ounces
rose to $963 million from $659 million a year ago, the bank said today in a statement
posted on its website. Copper sales of 112,100 metric tons fell 5.7 percent
to $909 million in February as prices declined, the bank said. Total metal
exports rose 8 percent to $2.29 billion, it said.
NEWS
Gold edges down with euro; Spain in focus
- Reuters
Gold futures slip in electronic trading
- MarketWatch
Gold Sales Drop in March on Signs of Stability,
Perth Mint Says - Bloomberg
Savers rush for gold as eurozone
debt fears drive up price – This is Money
COMMENTARY
Embry - What’s Happening in China is Wildly
Bullish for Gold – King World News
The Implications Of A Failed Monetary System
– Zero Hedge
Doug Casey on the US Constitution - GoldSeek
“Too big to fail” banks even bigger now
– Hot Air
Golden Eye of Hurricane –
Financial Sense
Mark
O’Byrne
Goldcore
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