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Market Update: Slippery Slope or Jagged Edge?

Gold tacked left this week, then right as it looked for its footing amid a series of pre-ordered trades. What was the trip wire? Failure of US monetary policy makers to step away from the fiscal cliff’s edge, mingled with very jittery bets. While gold closed Friday at $1726.00, making up much of its slide from Wednesday, it remains to be seen if the bears or bulls have it. Major forecasters are quite bullish as they count the many ways that portfolios must diversify, with gold being a major piece of the program. Silver rose a respectable 2.6%, closing at $34.28. The Euro looks strong next to the weak-kneed dollar, but now Germany is considering bailing on the union while the UK looks like it may be the next domino to fall across the pond. In the midst of all of that, investors are clamoring for physical gold, and India is seeing the highest prices for physical gold ever. So calm those nerves. The bulls appear to have it.

Precious metals on the move

London fix price at week’s end, and change over previous Friday:

  • Gold: $1,726.00, down 0.5%
  • Silver: $34.28, up 2.6%
  • Platinum: $1,612.00, up 1.8%
  • Palladium: $685.00, up 4.3%

In the news

US gold coin sales the highest in 14 years
“Investors have so far this month bought 131,000 ounces of American Eagles produced by the U.S. Mint, more than triple last year’s November sales and the strongest November since 1998.” (link)

Does China have 450 tonnes of gold, or not?
“Like much of the announced gold sector statistics, not only from China, but from the West as well, how much data is manipulated for overtly political ends? Governments, and by association Central Banks, are widely known to manipulate data, so why not gold statistics?  After all, gold is seen as a determinant of true currency values and governments like to present their data in the best possible light. ” — Lawrence Williams, MineWeb GM (link)

In Turkey, gold balances the budget through Iranian transactions
“Deputy Prime Minister Ali Babacan said on Nov. 22 that Iran, which is under international financial sanctions to curb its nuclear program, was buying Turkish gold with liras it obtained for gas sold to Turkey.” (link)

Spotlight on Silver

Silver to see breakout around the $37 mark
“When silver eventually punches through $37.50, it will suggest to us that we have totally broken out and started an up-move that is going to take us back to retest the old all-time highs set in 1980, and similar highs that were set back in April of 2011.” — Tom Fitzpatrick, Citi Analyst (link)

Gold on steroids: silver gets pumped for 2013
“For 2013 I think silver, like gold, will set a new all-time nominal price record, likely reaching as high as $54 an ounce.” — Peter Krauth, Global Resources Specialist, Money Morning (link)

Flash crash for precious metals caused by one sale
“As long the government can’t get its budget under control, gold and silver are solid investments. You can’t continue multitrillion-dollar debts without paying them back.” — Don Vandenbord, portfolio manager at Camarda Wealth Advisory (link)

The week ahead

  • Will the UK collapse next?
  • Germans are exhausted with their deadbeat buddies
  • Feds set to launch a whopping $3B QE3
  • Japan takes precious metals on board, throws paper over the rail
  • Is Brazil in a bubble?

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2012-12-02 17:00

5:00 pm


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