Market Update: Demand for gold coming to a head?

Two weeks ago we saw gold business cards in Hong Kong, and last week brought a lucrative heist in Portland and a mineral museum robbery in California – seems as if the desire for gold is reaching a fevered pitch. Talks of secession from the Euro were joined by screams for secession from the United States, further fueling the currency realists’ call for gold-backed paper. With the yellow metal range bound this week, closing at $1713.50 on Friday, silver continued its saunter towards a predicted breakout, closing at $32.27. With no clear economic policy from any place on the planet, the markets are struggling to find their footing, leaving many to wonder, “How close may we be to a surge from precious metals?”

Precious metals on the move

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

  • Gold: $1713.50, down 1.4%
  • Silver: $32.27, up 0.3%
  • Platinum: $1,554.00, down 0.3%
  • Palladium: $623.00, up 1.8%

In the news

Gold industry facing mine discovery challenge
“There were three discoveries last year, compared with 11 in 1991, and none of those can be described as ‘supergiant,’ or holding more than 20 million ounces.” — Jamie Solkasky, Barrick Gold Corp (link)

Israel’s announcements of future assassinations to lead to hedging in gold?
“Israel’s assassination of the Hamas military leader Wednesday and Israel’s pledge to take out more Hamas leaders has the Middle East region uneasy this week. This situation would turn into a solid underlying Bullish factor for safe-haven gold should military action in that region heat up.” — Paul A. Ebeling, Jr., International Business (link)

Japan investment sector dives headfirst into the precious metals
“I suspect that Japanese pension funds, insurance companies, banks, although they have to buy government bonds as almost a public edict because they can’t place the bonds, but talking to managers, there are switches going into the precious metals market. They are definitely buying up gold. Pension funds are doing that (buying gold). So there will be allocation shifts there.” — Ben Davies, CEO Hinde Capital (link)

Spotlight on Silver

Silver prices forecasted to dramatically outperform gold
“Silver is about to enter a sustained bull market that will take the price from the current level of $32 an ounce to $165 an ounce and we expect this price to be hit at the end of October 2015.” — Ian Williams, mixed asset fund manager (link)

Special – Spotlight on Platinum & Palladium

Platinum and palladium to face shortages not seen in at least a decade
“It’s unlikely that supplies of either platinum or palladium are going to rise. We’re assuming that demand is going to remain robust for both metals. Overall, we’re positive on investment demand, that conditions will remain favorable.” — Jonathan Butler, publications manager at Johnson Matthey (link)

The week ahead

  • Gaza Strip crisis setting up to explode into Middle East meltdown?
  • Eurozone may have new borders by early 2013
  • Peak gold? The mines of the world may be exhausted
  • Thanksgiving – Trade volume likely to decrease; Comex and Nymex closed on Thursday

Enjoy your Thanksgiving holiday! We wish the best to you and your family.

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