The World Gold Council Publishes Gold’s Q3 Summary

Today’s AM fix was USD 1,748.00, EUR 1,331.71, and GBP 1,081.42 per ounce. 
Yesterday’s AM fix was USD 1,747.75, EUR 1,333.86 and GBP 1,082.33 per ounce.

Silver is trading at $32.96/oz, €25.26/oz and £20.52/oz. Platinum is trading at $1,657.50/oz, palladium at $648.40/oz and rhodium at $1,200/oz.

Gold inched up $1.05 or 0.6% in New York yesterday and closed at $1,748.70. Silver climbed up & down and hit a session high of $33.255 and finished trading with a gain of 0.61%.

Gold hovered on Thursday, maintaining gains from the last two days and watching for new stimulus from a European Union summit after little reaction to news from China that showed the economy’s seventh quarter of GDP contraction.

The 27 member states of the EU will meet in Brussels today and tomorrow.  The agenda includes, Greece’s progress in debt talks with creditors, organizing a common eurozone budget and initial discussions for the proposed EU banking union.


XAU/EUR Currency YTD – (Bloomberg)

The proposed ECB Bank as a single banking supervisor similar to the US Fed was received well by markets but is met with resistance from some of the bloc’s members- the strongest being Germany.

Greece is set to run out of money by the end of November without the €31.5 billion in external funding on offer and in the Sunday edition of Greece’s Kathimerini newspaper, Greek Prime Minister Antonis Samaras said that he expected to reach a deal before the summit.

Investors are still waiting for Spain to seek a formal request for a bailout next month.

China’s economy dropping for its 7th quarter was as expected. However, investors desire more policy clarity from Beijing with the leadership change next month, and speculate that further quantitative easing will be announced.


Cross Currency Table – (Bloomberg)

HSBC trimmed their 2012 gold forecast to $1,700/oz but raised its 2013 to $1,850 and 2014 to $1,775/oz.  The price targets were adjusted based on the views of the Fed’s open-ended commitment to easing until U.S. labor markets improve, will continue support gold well into 2013.

The World Gold Council issued a summary on gold’s price performance in various currencies during the third quarter.  The report looks at influences that monetary policies and central bank actions have on gold.  

Gold’s 11.1% USD/oz return in 3Q was in response to central bank stimulus measures. Volatility decreased and generally correlated with other assets. 

Central banks announced a continuation of their unconventional monetary policy1 programmes in Q3 which mainly are used to lower borrowing costs and supporting financial markets.

Financial assets have responded to central bank policy announcements, but gold’s reaction has been the strongest.

There is a consensus that these policies drive investment into gold purely due to inflation-risk impact. The World Gold Council believes that there are not one but four principal factors that provide further support to the investment case for gold: Inflation risk, Medium-term tail-risk from imbalances, Currency debasement and uncertainty, and Low real rates and emerging market real rate differentials.

To read the full report on the World Gold Council website  click here or access from GoldCore’s Research section.

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NEWS
Gold flat as investors eye China data, euro zone – Reuters

 Gold Set to Decline for First Day in Three Before Chinese Data – Bloomberg

Comex Gold Edges Higher on Euro Rally – Wall Street Journal

COMMENTARY
Quarterly Statistics Commentary Q3 2012 – The World Gold Council

Merkel defiant over euro crisis as general strike hits Greece – The Guardian

Fears grow over EU banking union plan – The Financial Times

 

 

Mark OByrne

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