November Sees Gold Up 3% in USD and 9% in EUR and Silver Surges 14% and 22%

Gold

Concerns of contagion in eurozone debt markets and increasing existential concerns about the actual single currency itself saw gold rise 1% and silver by 3% yesterday (in USD). Gold in euro terms rose by even more as the euro again fell in international markets which saw gold in euros rise to a new record nominal high in euro terms just below €1,070/oz. While risk appetite is on again as seen in the bounce in equity markets, Spanish and Italian bond yields have risen again this morning showing that the risk of contagion remains real. Gold prices have remained robust after yesterday’s gain.

Gold is currently trading at $1,393.99/oz, €1,063.95/oz and £892.88/oz.

November Performance of G10 Currencies and Precious Metals (USD)

Gold and silver rose in all major currencies in November and given the scale of the current sovereign debt crisis and the real risk of an international monetary crisis, these gains look very sustainable. Safe haven demand continues in Europe and much of the western world and demand in Asia and in particular in India and China continues to surprise to the upside. Premiums on bullion bars in Vietnam, Singapore, Hong Kong and in India remain high showing appetite for gold remains strong in Asia. There are also reports that sourcing silver bullion in volume is becoming increasingly difficulty.

November Performance of G10 Currencies and Precious Metals (EUR)

With even strong proponents of the euro beginning to question whether it can survive the present crisis, there is a real risk of an international currency or monetary crisis. This real risk should see gold and silver remain strong and likely target their inflation adjusted ($2,400/oz) and record nominal record highs ($50/oz) in the coming months.

Gold in GBP and USD (31 Day)

Gold rose by 6% in GBP terms in November and the chart above and below show how that gold is correlated in all currencies in the medium and long term. This contradicts those who say that non USD buyers of gold have "currency risk". The largest currency risk investors and savers have today is from their local currency as this is what their homes, salaries, businesses etc are denominated and valued in.

As ever real diversification with a range of international assets – including international equities, short dated international bonds and a healthy allocation to gold and silver remain essential to protect, preserve and grow wealth.

Gold in EUR and USD (1 Year)

Year end profit taking may be weaker than expected given the significant risks continuing in the international financial and monetary system. Should profit taking materialize it will likely be seen in dollar gold and the crisis in the eurozone is unlikely to see euro gold fall significantly. Geopolitical risk in the Korean peninsula and in the Middle East should also be borne in mind.

Silver

 

Silver is up more than 1% again today after yesterday’s 3% gain. Resistance is at $28.55/oz and above this level there is no technical resistance until the nominal high of $50/oz. Thus, traders will likely target the ’round number’ psychological resistance of $30/oz.

Silver is currently trading $28.61/oz, €21.84/oz and £18.33/oz.

Platinum Group Metals

Platinum is currently trading at $1,669.25/oz, palladium at $709.00/oz and rhodium at $2,200/oz. 

Mark OByrne

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