Daily Market Update

Faber On Gold: “I Buy More Every Month”

U.S. & UK markets are closed today for a national holiday.
Friday’s AM fix was USD 1,292.00, EUR 948.61 and GBP 767.18 per ounce.

Gold fell$1.60 or 0.1% Friday to $1,291.70/oz. Silver slipped $0.18 or 0.5% to $19.388/oz. Gold was flat for the week while silver gained 0.5% for the week. Palladium gained 0.6% last week and platinum climbed nearly 2%.

Gold in U.S. Dollars, Daily, 2014 Year To Date – (Thomson Reuters)

Gold remains in lock down in the unusually tight range seen in recent days between $1,284/oz and $1,306/oz. Overnight, gold in Singapore traded in a very narrow $3 range between $1,291/oz and $1,294/oz and gold remained around the $1,292/oz level in morning trading in London.

The gold market continues to digest the news Friday, that the U.K.’s Financial Conduct Authority fined Barclays £26 million ($43.9 million) after one of its traders manipulated the London gold fix global price benchmark.

The fact that this was done over a long period of time and even on the day after Barclays was fined £290 million for manipulating Libor suggests that there may be more to this manipulation and may be other skeletons in the gold rigging closet.

“The Barclays incident is likely just the tip of the iceberg in respect of today’s gold market,” said Brien Lundin, editor of Gold Newsletter told Dow Jones Marketwatch.

The London Bullion Market Association (LBMA) has extended by one week the deadline for a consultation on the future of the daily silver fixing mechanism to give the industry more time to respond.

Russian Central Bank Gold Reserves, Millions of Troy Ounces  – (Gold Charts R Us)

IMF data on Friday confirmed that Russia increased its gold holdings by a hefty 27.7 tonnes in April taking its total to 1,068 tonnes, while Turkey raised its bullion reserve by 13 tonnes to 497 tonnes. Kazakhstan raised its holdings by 2.7 tonnes to 151 tonnes.

Eurosceptic nationalists saw stunning victories in European Parliament elections in France and Britain on Sunday as critics of the European Union more than doubled their seats in a continent-wide protest vote against austerity, unemployment and the centralisation of power in the EU. Some political analysts have called the elections a political “earthquake”.

Marc Faber told Bloomberg in an interview that he will “never sell his gold” and that “I buy more every month.”

Faber, managing director and founder of Marc Faber Ltd., discussed the state of the Chinese economy, the outlook for the U.S. stock market, gold and bitcoin with Trish Regan on Bloomberg Television’s "Street Smart."

“The momentum sell-off has caused internal market damage” and “every asset in the world is over-inflated right now…” Faber warns.

China worries him the most and he warns that Chinese growth figures are a fallacy.

“If one analyzes the data carefully” it is clear that “China is growing at most 4%.” Given the“gigantic credit bubble” the outlook is not hopeful as the sharp deceleration in growth is likely to continue. Faber also has strong words for Western nations treatment of the rest of the world and “the US will have to back off.. because China is so important.”

“I like the concept of Bitcoin”…  “Bitcoin has its merits since you may not be able to carry gold across borders,” Faber said.

“People think they know what the future holds… and what Central banks are up to.. they don’t… I will never sell my gold and I buy more every month… I would not be short gold,” Faber said.

Faber adopts the prudent strategy of dollar cost averaging or gradually accumulating a position over time rather than investing a large lump sum at once.

Our recent extensive interview with Faber on gold, silver and investment risks and opportunities today can be watched here.


Mark O'Byrne
Executive Director


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