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.
(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.
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
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
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