Market Update: Calling Bull on the Bears

November has come and gone with gold not reaching $2000 as some had predicted. Indeed, several large ETF sales and massive automatic sell-offs stymied the progression of the yellow metal during the last week of the month. Gold closed down Friday at $1701.50, with silver closing at $32.85. While some are pulling back on their predictions for gold and silver, Morgan Stanley is remaining bullish and suggests you do, too. China has launched their own gold index, and some mines seem to be indicating that the need to diversify their enterprise is at hand. The European Union is still together, with Draghi twisting some arms to at least get a stay of execution until the US decides that the fiscal cliff is really just its own shadow. Meanwhile on Planet Real World, gold coins are seeing record sales. It’s deja vu all over again.

Precious metals on the move

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

• Gold: $1,701.50, down 1.4%
• Silver: $32.85, down 4.2%
• Platinum: $1,600.00, down 0.7%
• Palladium: $698.00, up  1.9%

In the news

Gold bulls know that taking physical delivery is the only way off the edge 
“The Democrats are complaining that the fiscal cliff imposes too steep demands on those who receive entitlements. Republicans are trying to protect the military budget. What no one seems to want to address is what happens as foreign creditors increasingly decide to stop financing this bonanza.” — Peter Schiff (link)

Shanghai to host China’s new gold market
“Ultimately the gold market will open up to more banks, but it’s not going to be carte blanche. It’s unlikely the floodgates will be opened and every foreign bank will be able to import everything they want.” — Jeremy East, global head of metals trading at Standard Chartered PLC2 (link)

Mystery selling: Just who exactly is making all those gold trades just for the sake of trading?
“We’re actually seeing a fairly mysterious seller in the Asian time zone over the last week. We’ve seen some fairly large sell orders hit the market in the thinly-traded twilight zone between London and Asian business.”  —  Jeffrey Rhodes, CEO of INTL Commodities in Dubai (link)

These thieves smarter than many others, value physical gold over paper; steal $11.5 million in gold bars
“Authorities knew of the shipment because the official procedure was followed. The crew said it was like a movie operation, very fast. There were three crew members and the captain aboard the boat.” — Reggie Huggins, Curação Police Spokesman 3 (link)

Spotlight on Silver

How the greening electrical industry is making silver the next global conflict mineral
“This one use [solar power], by my calculations, will consume an inordinate amount of silver within the next five to seven years. I’m talking about the need for 700 gigs of photovoltaics between now and 2020. The amount of silver that we are going to need just for photovoltaics will amount to 30% of all the world’s yearly supply. In other words we will need 30% of those tons (of world silver production) just for this one use.” — Stephen Leeb (link)

The week ahead

• New stimulus measures to be announced at Federal Reserve’s Federal Open Market Committee?
• Fiscal cliff strip tease continues, audience is bored and sullen
• Will the mysterious trader out East strike again this Wednesday?
• Taxation is imminent for productive mines in ivory Coast; will this give boost to mines in South Africa?