GOLD PRICE gains were extended Tuesday morning in Asia and London, as the metal touched $1250 per ounce for the first time in 7 sessions and major government bonds rose after comments from US Fed officials on the odds of a QE tapering at this month's policy meeting. European stock markets crept higher, but Asian shares closed lower. Silver broke to a 2-week high above $20 per ounce as commodities rose, and the British Pound meantime hit a new 2-year high vs. the Dollar, capping the gold price in Sterling at £760 per ounce. "A recovery may be gaining pace," said Bank of England governor Mark Carney in a speech in New York overnight, "but our economies are a long way from normal." In gold, "We see short-covering and some bargain hunting," Bloomberg quotes David Govett at London metals brokerage Marex Spectron, "coupled with signs of some physical demand in China. But the gold price "is still limited on the upside," Govett adds. "We continue to wait for next week's Fed meeting." Gold price gains this week "[are] no doubt due to a large extent to speculative financial investors covering their short positions," agrees Germany's Commerzbank in a commodities note, "having previously built up record-high bets on falling prices." But again, and looking ahead to the US Federal Reserve vote on Weds 19 December, it says the debate about possible Fed tapering of its $85 billion per month in quantitative easing "hangs like the sword of Damocles over commodity prices in general and gold in particular." "It is time to taper," said Richard Fisher, president of the Dallas Federal Reserve Bank, in a speech in Chicago yesterday, warning of "financial shenanigans" thanks to "a surfeit of excess liquidity sloshing about in the system." Fisher, who has repeatedly called for an end to quantitative easing – and who said in August that "We have artificially suppressed rates...this cannot go on forever" – will become a voting member of the Fed in 2014. But also speaking Monday, "Inflation continues to surprise to the downside," said current voting policy-maker James Bullard, president of the St.Louis Fed. "This is a concern that often gets lost amid other encouraging economic metrics like jobs [which] a small taper might recognize. "Should inflation not return toward target [currently at 2.0% per year], the Committee could [then] pause tapering at subsequent meetings," Bullard added. Pointing to the fact that gold "tends to struggle" when real interest rates rise, "If you have a view on US 10-year rates and US inflation, you can formulate a view on gold prices," says a note from Canadian bank CIBC. "With the latest [US] October inflation reading at 1.2%, we see little room for inflation to fall further without instigating fears of deflation," says the note – a trend likely to boost QE from the Fed, rather than tapering. Because of the US Fed's stated policy of keeping interest rates low to support housing and credit, "We also see limited scope for a material rise in 10-year yields," add the bank's analysts, who said gold's "glorious run" was over in Feb. 2013, eighteen months after the peak but shortly before gold's worst price crash in three decades. On the supply side meantime, and recovering from a series of violent wildcat strikes in late 2012, South Africa's gold mining production jumped 75% in October from a year earlier, the government said today. The former world No.1, but now the fifth largest gold mining nation after annual production more than halved from record levels a decade ago, mined only 170 tonnes of gold last year. China, the current world No.1, mined 347 tonnes of gold in the year to October, new data showed Tuesday, versus 403 tonnes in full-year 2012.
ETFS weekly report said that although fundamental conditions have turned more bearish, gold may be forming a double bottom at US$1200/oz, as the bifurcated market situation continues to pit physical buyers against more tactical product and futures sellers.
GOLD BULLION prices held steady around $1230 per ounce in London trade Monday morning, ticking upwards as Asian stock markets closed higher after strong data from China but European shares slipped. The Euro rose to 6-week highs vs. the Dollar on the FX market, capping gold bullion priced in the single currency beneath €900 per ounce. Silver rose 0.7% as commodities also gained, together with major government bond prices, reaching $19.65 per ounce. "A lot of [gold] selling has now been done," reckons Frances Hudson, co-manager of $271 billion at Standard Life Investments in Edinburgh, quoted by Bloomberg. "So you could see a more stable base for the gold price to build on." Last week the world's biggest gold ETF, the SPDR Gold Trust (ticker: GLD) shed another 0.9% of the gold bullion held to back its exchange-traded shares, taking the total down to a near 5-year low beneath 836 tonnes. Bearish betting by money managers, hedge funds and other speculators meantime rose in the week-to-last-Tuesday to the equivalent of 315 tonnes of gold bullion by value, well above the 250-tonne average of 2013 to date. That compares with the previous 5-year average short position of 96 tonnes. Overall, however, so-called speculative traders remain bullish in aggregate, with their long position in US gold futures and options outweighing those short bets by 151 tonnes – the smallest "net long" since midsummer's multi-year lows. "This could be just the news that the gold bugs wanted to hear," says the Financial Times. "More and more traders have lost faith in bullion. Yet the more that a consensus [for lower 2014 prices] builds, the closer to a possible turn in sentiment." "We could expect a short-term recovery in gold prices," Reuters quotes Hong Kong economist Alexis Garatti at Haitong International Research. "[Because] in our view, the mood of the market is exaggerated regarding the macroeconomic situation in the US." New data from Beijing meantime showed a surge in China's exports for November, taking the overall trade surplus to a sudden 4-year high. The world's largest gold mining producer, China is now also the world's largest end-buyer of gold bullion, overtaking India in 2013, which will likely see a drop in gold imports to 900 tonnes according to comments Monday from market-development group the World Gold Council. Gold bullion prices on the Shanghai Gold Exchange rose Monday in brisk trade, even as the Yuan exchange rate was raised to new highs against the Dollar by the People's Bank. "There's so much room to grow," says World Gold Council investment director for the Far East, Roger Liu, quoted by the Wall Street Journal. Noting China's current gold bullion accumulation of 4.5 grams per head per year, and contrasting it with the global 24-gram average, "I expect more [ETF trust fund] products along the lines of SPDR Trust to pop up in China," Liu concludes.
The Krugerrand is probably the original Gold bullion coin. It was introduced in 1967 as a vehicle for private ownership of Gold whilst also being circulated as currency, hence being minted in a durable alloy. From 1980, further sizes were introduced. See speciﬁcation table overleaf. Details The history of the Krugerrand begins with the South African Chamber of Mines which had the inspired idea to market South African Gold by producing a one Troy ounce bullion coin to be sold at a very low premium over the intrinsic Gold value. It was intended to be circulated as currency, hence it was minted in a more durable alloy and contained 2.826g copper to resist scratching and thus giving the coin its golden hue. At the time of launch, the Krugerrand was the only accessible Gold investment opportunity for the everyday buyer and this thought came through from the inception. It was the ﬁ rst coin to contain exactly 1 Troy ounce of Gold. Despite the coin’s legal tender status, economic sanctions against South Africa made the Krugerrand an illegal import in many Western countries during the 1970s and 1980s. These sanctions ended when South Africa abandoned apartheid in 1994 and the Krugerrand once again regained its status as one of the worlds’ leading bullion coins. In 1967, only the one ounce coin was available. From 1980, the fractions were available, namely, one half ounce, one quarter ounce and one tenth ounce. The name is derived from a combination of Paul Kruger, a well-known Boer leader and later President of the Republic and the Rand, the monetary unit of South Africa. The obverse side features the Otto Schultz image of Kruger along with the name of the country “South Africa” in the two languages, English and Afrikaans. The reverse side, designed by Coert Steynberg features the image of a Springbok Antelope, one of the national symbols of South Africa. By 1980, the Krugerrand accounted for 90% of the Gold investment coin market. For example, it is estimated that between 1974 and 1985, some 22 million coins were imported into the United States alone. Although it is not a beautiful coin, many millions have been sold since its introduction due to the policy of selling with a very low premium. The success of the Krugerrand led to many other Gold-producing nations minting their own bullion coins, such as the Canadian Maple Leaf in 1979, the Australian Nugget in 1981, the Chinese Panda in 1982, the US Eagle in 1987 and the British Britannia in 1987. The Krugerrand is interesting in that the government of South Africa has classed the coin as legal tender although it has no face value. It therefore fulﬁlls VAT-free criteria for investment coins. Investment Advice There are various grading systems in use around the world. However, the British system is as follows: Essentially, the bulk of Krugerrands are produced in a non-proof form although the South African Mint produces limited edition Proof quality Krugerrands as collector’s items. These coins in particular attract a healthy premium and are priced well above the value of the bullion alone. However, non-Proof coins also have a premium above the value of the bullion. The Proof and non-Proof coins can be distinguished by the reeding, that is, the number of serration on the edge of the coin. Proof coins have 220, non-Proof have 180. Krugerrands are made of an alloy of Gold and Copper – this effect also being known as Crown Gold as it has long been used for the British Sovereign coins. Due to the popularity of the Krugerrand, there are also many fakes in existence and the investor should be wary. Copper alloy gives a much more orange appearance than silver alloy. Likewise copper is very durable and coins should be in good condition always. The best marker of authenticity is the weight and this should be checked carefully using the table below since the Gold weight and total weight are known. Check also the reeding. Specs All investment coins sold by LinGOLD.com are EF quality or above. For further information: +44 (0)203 318 5612 email@example.com The Krugerrand 1 once was first posted on December 9, 2013 at 12:45 pm.
The US jobs data were quite positive with unemployment down to 7%, non-farm payrolls rose 203k in November baove consensus expectations of 185k. Forex markets continue to remain bearish for gold with 1 month targest for EUR/USD at 1.32, USD/JPY at 98 and USD/CHF at 0.94.
Monex spot gold prices opened the week at $1,236 . . . traded as high as $1,251 on Wednesday and as low as $1,216 on Friday . . . and the Monex AM settlement price on Friday was $1,230, down $6 for the week
GOLD PRICES steadied Friday morning in London, heading for 1.7% losses for the week around $1230 per ounce but with traders watching closely for new US jobs data, due just before the start of New York business. Commodities ticked higher with European stock markets, which were heading for near-3% weekly losses. The Euro held at 5-week highs to the Dollar, pushing gold prices for Eurozone investors back down through €900 per ounce, a 3-year low when hit earlier this week. Silver steadied with gold, ticking up towards $19.50 for a 2.5% weekly fall. "Gold prices simply weren't able [this week] to withstand the barrage of stronger-than-expected US macro indicators," says a US broker's note. Stronger-than-expected US jobs data Friday would see gold prices "re-test the lower band of the current bear channel at $1207/10," reckons one London market maker's trading desk, "where some physical demand and official sector buying last materialized." Reviewing the "language of economists" however, one Asian gold trading desks says it "has now turned to suggest Fed tapering will hit US bonds most directly." So for gold, "Short covering is now in the air" after Wednesday saw bearish speculators being forced to close their bets by a $25 spike in gold prices. The US central bank, said Dallas Fed president Richard Fisher on Thursday, should now "define a very clear path...once we start tapering...as to when we reach zero" from the current monthly QE of $85 billion. But noting the volatility in UK gilt prices and yields after new Bank of England governor Mark Carney discussed a timeline for raising interest rates here, "It is questionable," says French investment and bullion bank Natixis, "how successful the Fed could be in calming fixed-income markets through its own forward guidance. "Indications of stronger US growth therefore have scope to undermine gold prices further if the US bond market continues to push yields higher." "Rising opportunity costs depress gold," agrees Germany's Commerzbank in a new 2014 outlook, also pointing to higher real US interest rates (after inflation) in 2013 as well as the surging US stock market. Even so, "The gold price is likely to recover from its historic slump this year," Commerzbank's commodity team concludes. Gold investment demand "should gradually revive...in conjunction with robust demand from Asia." "China is absorbing the gold which is becoming available as a result of ETF outflows," the report adds. "Essentially," agreed James Steel at London bullion market-making bank HSBC to the FT this week, "physical gold stocks are migrating from Western investment hands to eastern consumers." "If China," adds mining fund manager Evy Hambro, at Blackrock "starts to move towards similar per-capita gold consumption levels as India, that will be very supportive for the market." Slipping 0.7% this week for Chinese traders, gold prices on the Shanghai Gold Exchange ended Friday equal to $1242 per ounce, almost $10 above London quotes at the time. That premium to London gold prices compares with $7 at the start of the week. Indian premiums meantime hit new all-time records Friday, as the world's former No.1 importer faced ever-tighter domestic supplies following the government's anti-gold rules. "Only Scotia Bank, State Bank of India and some trading agencies like MMTC are importing," Reuters quotes one wholesale gold dealer in Kolkata. "There is no other option for domestic jewellers but to pay high premiums," the dealer, Harshad Ajmera of J.J.Gold House goes on, citing the new record high above London gold prices of $150 per ounce on Friday.
GOLD PRICES continued to tick lower from yesterday's sudden 3.1% jump in London trade Thursday morning, edging below $1230 per ounce as Asian stock markets closed lower but European shares held flat. Silver also halved its gains from Wednesday, trading lower in line with gold prices at $19.40 per ounce. Neither the European Central Bank or Bank of England made any changes to their record-low interest rates, lending or quantitative easing at their December meetings today. UK chancellor George Osborne forecast to Parliament that the government will run a budge surplus as soon as 2019. The Pound fell towards 1-week lows. Gold prices in Sterling slipped to £754 per ounce, 1.8% above Wednesday lunchtime's new 3-and-a-half-year low. "Mixed signals" says technical analysis of Dollar gold prices from French investment bank and London market maker Societe Generale. "Short-term, gold has bounced," but the bank's chart analysts still target a drop below June's low of $1180 within 1 to 3 months. Wednesday's action "formed an outside day reversal warning," says ScotiaBank's technical analysis, with gold prices hitting a new 5-month low but ending US futures trading sharply higher. "However, as the daily trend remains bearish, the signal would have to be confirmed by an up day [on Thursday]." Following what Commerzbank's commodity team calls "a sharp reversal immediately" on the release of yesterday's much-better-than-expected US jobs data from the private ADP payrolls service, "a short covering rally ensued" it says, with bearish traders betting on lower gold prices forced to close their positions as the market rose. Ahead of Friday's official US jobs data, "The markets are still positioned quite short," reckons ANZ Bank analyst Victor Thianpiriya, quoted by Reuters. "There is going to be a bigger reaction to a weaker-than-expected nonfarm payrolls report than to stronger-than-expected numbers." Looking further ahead, "Tighter monetary policy in the US and rising rates are hanging over the market," said a note from Bank of America-Merrill Lynch analysts this week. "[That] could push gold prices towards $1100 per ounce in 2014," it believes. "Yet while the pause in the bull market may continue, we see several encouraging signs, most notably physical demand from emerging markets, that suggest...gold remains a sound medium-term investment." But "we are seeing continued outflow of gold investment holdings," counters one Singapore trading desk in a note, "and the physical demand from Asia seems insufficient to halt gold's decline." Gold prices achieving "a successful hold above $1180 would...be the best case scenario amidst mounting bearish pressure," it adds. Crude oil meantime rose to 5-week highs Thursday morning, with Brent crude touching $112 per barrel, after the US reported a sharper than expected drop in weekly stockpiles. The Opec oil cartel of 12 major producer nations yesterday maintained its 30 million barrels-per-day quota for 2014, but may have to cut output by 2.5% later next year to support prices, reckons Gareth Lewis-Davies, senior energy strategist at French investment bank BNP Paribas. India's DNA news-site says half-a-tonne of gold is being smuggled into the country each day, citing "top officials" at the Directorate of Revenue Intelligence. "Contrast this 15 tonnes per month with finance minister P.Chidambaram's target of 20-25 tonne [of legal] imports," says DNA.