2012 Top Trades of BOA – Buy Gold Versus Euro; Iran Warns of Oil at $250

Gold is trading at USD 1,740.10, EUR 1,295.90, GBP 1,114.30, CHF 1,604.5, JPY 135,900 and AUD 1,700.4 per ounce.

Gold’s London AM fix this morning was USD 1,744, GBP 1,114.88, and EUR 1,296.08 per ounce.

Friday’s AM fix was USD 1,751.00, GBP 1,116.50, and EUR 1,298.29 per ounce.


Cross Currency Rates

At the open in Asia, gold spiked from $1,746.75/oz to $1,755/oz before being capped at that level and falling back to its opening price. It remained near the $1745/oz mark overnight and this morning in Europe until soon after the London AM Fix ($1,744/oz) when selling commenced again.

Traders may be hesitant to place positions ahead of the Franco-German summit and there may also be some profit taking after the nearly 4% gains seen last week. 

Gold will likely be supported this week by the intractable eurozone debt crisis and renewed jitters about Iran which has seen oil rise again today (NYMEX/ WTI at $101.80).

Iran warned yesterday that any move to block its exports would lead to oil at $250 a barrel.

Physical buying continues internationally. Indian gold edged higher this morning following a weaker rupee, and premiums in the physical market steadied after a recent lull in buying. Chinese demand is gradually picking up again ahead of Chinese New Year. 

Safe haven demand from Eurozone countries has increased significantly in recent days due to the concerns about euro exposure due to the possible collapse of the single currency.

Speculators, hedge funds and money managers pared their holdings of Comex gold and silver futures and options in the week ended Nov. 29, according to data released Friday by the Commodity Futures Trading Commission (CFTC).

The CFTC data, typically released Friday, were delayed because of the Thanksgiving holiday.

In gold futures and options, 4,207 long positions were cut and 1,249 short positions were cut.

This reduced their net position by 2% to 146,298 long contracts, from 149,256 long contracts a week earlier.

The managed fund net-long position represents around 14.6 million troy ounces of gold.

In Comex silver futures and options, these funds added 110 long contracts and 316 short contracts. This reduced their net long position by 2% to 12,334 contracts, from 12,542 contracts the previous week.

The net silver position represents around 61.6 million troy ounces of silver.

In platinum, 243 long positions were cut and 555 short lots were added, taking the net long position down to 12,952, from 13,750.

In palladium, 64 long lots were cut and 506 short lots were added, reducing the net long position to 5,231 from 5,800.

Volatility in currency markets has increased markedly in recent months and this looks set to continue in the coming weeks as liquidity dries up in the run up to and during Christmas and New Years.

Currency markets have proved even more difficult to predict than usual due to the global debt crisis. News headlines and rumours are causing large swings in the market.

Intervention from governments around the world to weaken their currencies and competitive currency devaluations have surprised markets. Investors can no longer assume that the yen, Swiss franc and the US dollar will be safe havens. 

Foreign exchange trading today normally averages £4 trillion (€4.7 trillion) a day, according to the Bank for International Settlements.

2012 Top Trades of BOA – Buy Gold Versus Euro
Gold and the dollar are Bank of America Merrill Lynch’s top currency trades for 2012. 

BOA, the second-biggest U.S. bank by assets after JPMorgan Chase & Co., said that investors should buy gold versus the euro as the ECB engages in quantitative easing to contain debt turmoil. 

David Woo, global head of rates and currencies in New York at the Bank of America Corp. unit, told clients in research note that “the ECB will be buying more government debt and doing QE, so buy gold against the euro.” 

“The second major theme is U.S. fiscal tightening is about to come, and the U.S. economy will slow, and this will be very good for the U.S. dollar.”

“The general theme for the year ahead is pretty negative for the risk environment,” Woo said.

For breaking news and commentary on financial markets and gold, follow us on Twitter.

SILVER 
Silver is trading at $32.60/oz, €24.24/oz and £20.83/oz 

PLATINUM GROUP METALS 
Platinum is trading at $1,541.70/oz, palladium at $644.75/oz and rhodium at $1,575/oz. 

NEWS
(Reuters)
Gold inches up as key EU summit nears

(Reuters)
Decision time for EU, with euro’s future at stake

(Washington Post)
Oil rises to near $102 a barrel in Asia amid rising Iran tension

(Reuters)
Iran says oil would go over $250 if exports banned

COMMENTARY
(Financial Times)
Are We Heading Back to 1929 – Or the Dark Ages?

(Financial Times)
France and Germany Look Set to Fudge It Yet Again

(Best Bullion)
Laura Gross: Goldbug Defined

(Economic Policy Journal)
Is Your Money Safe at Your Brokerage Firm?

(NY Sun)
Bernanke’s Forgotten Footnote

(ZeroHedge)
No, Dylan Grice Did Not Say Germany’s Unwillingness To Print May Lead To The Rise Of Another Hitler

(Wall Street Journal)
Weighing Loss of Iran’s Oil

 

Mark O'Byrne

Also on news-goldcore-com

Videos

Episode 5 of The M3 Report with Steve St Angelo

What we can Learn from the International Gold Market

Jim Rogers Interview 2022

Blog posts

Ross Geller inspires Bank of England policy

This morning the UK pound slumped as one of the world’s oldest central banks pressed hard on the panic button. The Bank of England was seen to be shouting ‘Pivot! Pivot! Pivaat!’ as they announced they would temporarily suspend their programme to sell gilts and will instead buy long-dated bonds.  In a statement, the bank […]

READ MORE

Episode 5 of The M3 Report with Steve St Angelo

Is the energy crisis something that can be resolved? Was it always inevitable? Will renewable energy make it all OK? Are Western financial policies to blame? All this and more in today’s The M3 Report! If you’re not already subscribed to GoldCoreTV then click here right now to make sure you’re all set to watch the fifth […]

READ MORE

Brace Yourself for the Impact

Fed’s message this week – higher rates, lower economic growth, higher unemployment. The Fed hiked interest rates by 75 basis points for the third straight meeting and the statement said that the committee anticipates further increases. The Summary of Economic Projections (SEP) showed that the median projection is for a further 1.25% increase by yearend. […]

READ MORE

Featured

Rick Rule- Should You Invest In Gold 2022

READ MORE

Jim Rogers- The Worst Bear Market is Coming

READ MORE
Newsletter
Category
Archives
Popular

No posts available

Videos

Episode 5 of The M3 Report with Steve St Angelo

What we can Learn from the International Gold Market

Jim Rogers Interview 2022

Blog posts

Ross Geller inspires Bank of England policy

This morning the UK pound slumped as one of the world’s oldest central banks pressed hard on the panic button. The Bank of England was seen to be shouting ‘Pivot! Pivot! Pivaat!’ as they announced they would temporarily suspend their programme to sell gilts and will instead buy long-dated bonds.  In a statement, the bank […]

READ MORE

Episode 5 of The M3 Report with Steve St Angelo

Is the energy crisis something that can be resolved? Was it always inevitable? Will renewable energy make it all OK? Are Western financial policies to blame? All this and more in today’s The M3 Report! If you’re not already subscribed to GoldCoreTV then click here right now to make sure you’re all set to watch the fifth […]

READ MORE

Brace Yourself for the Impact

Fed’s message this week – higher rates, lower economic growth, higher unemployment. The Fed hiked interest rates by 75 basis points for the third straight meeting and the statement said that the committee anticipates further increases. The Summary of Economic Projections (SEP) showed that the median projection is for a further 1.25% increase by yearend. […]

READ MORE

Featured

Rick Rule- Should You Invest In Gold 2022

READ MORE

Jim Rogers- The Worst Bear Market is Coming

READ MORE