Daily Market Update

Silver Rally Due – Seasonally Strong Mid December To End of April

Today’s AM fix was USD 1,709.75, EUR 1,318.23 and GBP 1,063.41 per ounce. 
Yesterday’s AM fix was USD 1,708.50, EUR 1,324.11 and GBP 1,065.42 per ounce.

Silver is trading at $33.15/oz, €25.62/oz and £20.58/oz. Platinum is trading at $1,632.00/oz, palladium at $697.90/oz and rhodium at $1,070/oz.

Gold climbed $7.50 or 0.44% in New York yesterday and closed at $1,711.60/oz. Silver hit a high of $33.415 and finished with a gain of 0.39% at $33.19/oz.

Gold and silver are slightly lower against all fiat currencies today – although the under pressure yen was flat against gold – on what is being attributed to profit taking. There is a belief among many market participants that the Fed will announce further stimulus measures, which will boost the precious metals appeal as an inflation hedge.

The FOMC meeting begins today and the press conference and policy statement is on Wednesday. Most economists are looking for an announcement of $45 billion in monthly bond purchases and the continuation of ultra loose monetary policies that should benefit gold and silver.

Gold ETF holding’s fell from record highs to 76.177 million ounces on December 9th after a run of consecutive record highs every week since the middle of November despite counter intuitive trading and the lull in prices.

Some of the recent weak performance in the precious metals may be due to some large institutions and hedge funds engaged in yearend book balancing and that includes taking profits to cover losses in other areas.

Gold and silver are up 9.3% and 19% respectively so far this year – thereby outperforming many asset classes again in 2012.

In time, 2012 may be seen as a year of correction and consolidation for the precious metals after the sharp gains and record nominal highs seen in 2011.  

As Dimitri Speck’s excellent ‘Silver Seasonal 30 Year Chart’ shows silver over the long term has a clear seasonally strong period from mid December through to the end of April.

Silver Seasonality Chart 

Indeed, Bloomberg’s ‘Seasonality Chart’ for silver shows that in the shorter term there are also seasonal factors to consider. In the last 5 and 10 years, the best month to own silver has been February with gains of 9.5% over the 5 year period and 6.4% over the 10 year period.

The months with the next best performance are November, January and April (see 5 and 10 year average returns in chart). Over the long term March is a good month to own silver and this can be seen in the 3.2% 10 year average return.

This shows that the optimal time periods to own silver are from the end of June through to May.

June is a wicked month to own silver with hefty losses of 5.5% and 5.3% over the 5 year and 10 year period. August is a weak month and September mediocre. 

While silver has clear seasonality, one should not use it as a trading bible – it is merely a guide.

This is clearly seen in the fact that while February is silver’s best month, silver fell 5% in February 2003 which could have wiped out someone trading silver with leverage.

Silver’s seasonality is clear and can help us to decide on when to buy or add to allocations and indeed when to sell or reduce allocations. 

Silver in USD (5 Year) – 100, 200 and 250 Daily Moving Average 

The positive seasonals and silver being close to its long term daily moving averages after the massive period of consolidation of the last 21 months means that the short term cyclical and technical prospects for silver look very positive.

Silver Prices/Fixes/Rates/Vols

(Bloomberg) — Silver Futures in Shanghai Falls for First Time in Three Days
Jan. contract drops as much as 0.8% to 6,692 yuan/kg on the Shanghai Futures Exchange, declining for first time in three days.

Contract trades at 6,699 yuan at 9:03 a.m. Singapore time, after climbing to 1-wk high of 6,759 yuan yesterday.

June-delivery gold 347.32 yuan/gram vs. 347.27 yuan yest.

Cash bullion of 99.99% purity gains for third day, increasing 0.1% to 342.77; vols. for benchmark cash contract were 4,037kg yest. vs. 6,542kg on Dec. 7.

(Bloomberg) — Maple Leaf Gold Coin Sales Top 2012 High, Royal Canada Mint Says 
Sales of 1-ounce Maple Leaf gold coins in November were the highest of any month this year, said a spokesman for the Royal Canadian Mint, without disclosing the figure.

While the mint’s bullion-refinery unit tracks monthly sales, the mint only provides figures quarterly, Alex Reeves, a senior manager of communications, said in a telephone interview from Ottawa. Fourth-quarter sales will be available in January, he said. Sales last year reached almost 1.2 million ounces.

Gold futures in New York are headed for the 12th straight annual gain after central banks from the U.S. to China pledged to bolster their economies. U.S. Mint sales of American Eagle gold coins more than doubled last month to the highest since July 2010, data on the mint’s website showed Nov. 30.

“When investor interest in gold rises, sales of gold Maple Leaf bullion coins rise also,” Reeves said.

Gold futures for February delivery climbed 0.5 percent to $1,714.10 an ounce at 12:39 p.m. on the Comex in New York. A close at that level would be the third straight gain, the longest rise since Aug. 27.

The Royal Canadian Mint refines and produces Maple Leaf bullion coins, gold bars and 1-ounce silver, platinum and palladium coins.

(Bloomberg) — IShares Silver Trust Holdings Unchanged at 9,829 Metric Tons
Silver holdings in the IShares Silver Trust, the biggest exchange-traded fund backed by silver, were unchanged at 9,829.15 metric tons as of Dec. 10, according to figures on the company’s website.


                Dec. 10     Dec. 7     Dec. 6     Dec. 5     Dec. 4     Dec. 3

                   2012       2012       2012       2012       2012       2012


Million Ounces  316.015    316.015    316.015    316.015    314.756    313.723

 Daily change         0          0          0  1,258,182  1,033,794          0


Metric tons    9,829.15   9,829.15   9,829.15   9,829.15   9,790.02   9,757.86

 Daily change      0.00       0.00       0.00      39.13      32.16       0.00


NOTE: Ounces are troy ounces, SOURCE: iShares Silver Trust

Cross Currency Table – (Bloomberg)

Join David Morgan, publisher of the Morgan Report and a recognised expert and global authority on silver and Mark O’Byrne, Head of Research and Founder at GoldCore.

In this 60-minute webinar, discover: 

Outlook for Silver in 2013 and Coming Years

Silver Seasonality – When To Buy 

Safest Way To Own Silver 

Join us for a webinar on 12/12/12 at 1900 GMT.

Register Now

Gold steady above $1,710/oz ahead of Fed meeting – Reuters

Gold Halts Three-Day Advance Before Fed Meeting; ETPs Set Record – Bloomberg

Gold futures decline ahead of Fed – Market Watch

Gold Under Pressure in Asia on Profit-Taking in Precious Metals – Wall Street Journal

B of A: Here’s The Lowest Gold Prices Will Go – Business Insider

Research Shows All Fiat Paper Money Systems Eventually Fail – Market Oracle

Sales of American Eagle gold coins soar – The Financial Times

Latin America central banks look to gold – The Financial Times

Inflationary Deflation: Creating A New Bubble In Money – Zero Hedge

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


Mark OByrne


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