Gold’s London AM fix this morning was USD 1,765.00, EUR 1,316.18, and GBP 1,113.28 per ounce.
Friday’s AM fix was USD 1,778.50, EUR 1,328.23, and GBP 1,125.412 per ounce.
Gold ticked higher initially in Asia before seeing slight price falls and that weakness has continued in European trading with gold lower in most currencies.
G20 nations rebuffed calls from the euro area to boost the IMF’s bailout fund and this may have contributed to the slip which was also seen in Asian and European equities, U.S. index futures, oil and other commodities.
Markets await US home sales which come out at 1500 GMT. Investors expect the ECB to inject another massive half a trillion euros to banks in the 2nd tier of a three year long-term financing operation in the vain hope that this will allow European finance minister’s to solve the debt crisis.
At best it will bide time and it is a sign that debasement of the euro is set to continue with obvious inflationary implications.
Gold bullion prices gained 3% last week as concerns that the Greek bailout is another exercise in kicking the giant beer can down the battered road. Investors rightly expect further loose money policies which will support gold’s appeal as an inflation hedge.
Analysts are still bullish on gold especially with the very tense Middle Eastern situation and the crisis with Iran and Syria showing no signs of being resolved.
The dollar is near a 2 month low and the Japanese yen has fallen sharply in recent weeks which has gold in yen at its highest since September 2011.
For the week of February 21st gold futures and options are at their highest level in 5 months, US Commodity Futures Trading Commission data show.
Spot platinum, which rose to a 5 month high at $1,731.50 and surged 5% last week, has fallen 0.4 percent to $1,701.24.
Reuters noted that South Africa’s Impala Platinum had agreed to rehire thousands of miners sacked for an illegal strike that halted production for more than a month at the world’s biggest platinum mine, a leading union said on Saturday.
There are conflicting reports from the IMF and Sweden’s central bank, the Riksbank, this morning about an increase in Swedish gold reserves.
The IMF data on central bank demand in January showed that Sweden raised its gold reserves by 18.3 metric tons to 144 tons in January.
The data on the International Monetary Fund’s website was gold bullish showing continued demand for gold by central banks internationally. Belarus added 5 tons to reserves, Kazakhstan raised reserves by 7.6 tons and Turkey increased gold reserves by 4.1 tons.
They were two quite odd minor reductions in gold reserves. Mexico reduced bullion reserves by 0.1 ton and Tajikistan cut them by 0.3 ton, according to the IMF.
However soon after the increase in Sweden’s gold reserves was reported by Bloomberg, Sweden’s central bank gold reserves contradicted the IMF data and denied that they had increased their reserves.
Joanna Gerwin, acting head of communication for the Riksbank, told Bloomberg that Swedish gold reserves were unchanged at 125.7 metric tons in January.
Officials at the IMF’s office in Paris said nobody in Europe was able to comment. Alistair Thomson, a spokesman for the IMF in Washington, didn’t immediately reply to a voicemail and e-mail from Bloomberg outside normal business hours.
Interestingly, the Riksbank sold 36.6 tons under the Central Bank Gold Agreement (CBGA) from 2007-2009. An increase in reserves of 18.3 tonnes is exactly half of the amount sold and would mean that the Riksbank had bought back half of the gold sold from 2007 to 2009.
Reuters have contacted the Swedish central bank to see what might be behind the discrepancy in what Bloomberg are quoting them as saying and the IMF figures themselves. We have yet to receive an explanation from the Riksbank about what might have caused the discrepancy in gold reserve data.
However, a Riksbank spokeswoman told Reuters the central bank did not buy gold in January. "We don’t know what has happened," the spokeswoman said, referring to the discrepancy in the figures.
We await clarity from the IMF and it will be interesting to see how the discrepancy is accounted for and explained.
This is an occurrence that we are likely to see occur in the coming months and years as western central banks realise the absolute folly of selling their gold reserves in recent years, including and especially the Bank of England, and begin to diversify their foreign exchange reserves by buying gold bullion again.
Western central bank gold buying is likely to be seen in the coming months and years as western central banks realise the absolute folly of selling their gold reserves in recent years, including and especially the Bank of England, and begin to diversify their foreign exchange reserves by buying gold bullion again.
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(Bloomberg) — Barclays Capital Says its ‘Staying Bullish for Gold’
Barclays Capital said it’s “staying bullish for gold,” adding that its initial target for the precious metal is near $1,800 an ounce.
“We would prefer to buy dips against the recent $1,700 range lows and look for an eventual break above $1,800 to open our next target at $1,836,” the bank said in an e-mailed statement. The bank forecast the metal to average $1,875 an ounce during 2012.
Silver is trading at $35.11/oz, €26.21/oz and £22.15/oz.
PLATINUM GROUP METALS
Platinum is trading at $1,691.75/oz, palladium at $696.08/oz and rhodium at $1,475/oz.
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