Today’s AM fix was USD 1,231.75, EUR 911.60 and GBP 760.57 per ounce.
Friday’s AM fix was USD 1,241.75, EUR 918.59 and GBP 766.75 per ounce
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Gold remained unchanged Friday, closing at $1,243.20/oz. Silver slipped $0.12 or 0.6% closing at $19.87/oz. Platinum fell $5.50 or 0.4% to $1,437.74/oz, while palladium dropped $6.50 or 0.9% to $729.72/oz. Gold and silver both fell on the week at 3.46% and 4.24% respectively.
Gold initially ticked slightly higher in Asia overnight after the U.S., China, Russia, the UK, France and Germany reached an agreement with Iran yesterday to limit Iran’s nuclear programme. The agreement allows for the easing of sanctions on trading gold with Iran. This has prevented Iran from diversifying into gold in recent months.
Two hours into trading and gold was slightly higher at $1,244.50/oz. However, gold prices then came under pressure, with more concentrated, significant sell orders commencing at exactly 0600 GMT. Sharp, concentrated selling took place which pushed gold prices from $1,238/oz to $1,225 or $13 in less than two minutes. Interestingly, a volume buyer then stepped in and gold then bounced higher to $1,233/oz.
The detente with Iran is not as bearish for gold as is thought. While the threat of any imminent conflict with Iran has eased in the short term, the move allows Iran to begin accumulating gold again - another source of significant sovereign demand.
There is also still risks of a military confrontation in the region. Israel and Saudi Arabia were extremely opposed to the deal and significant tensions remain in the powder keg that is the Middle East.
On Friday, gold managed to close with a slight gain, but that didn’t stop prices from suffering their biggest weekly loss in 10 weeks - down 3.4%. Gold’s falls came amid peculiar trading on the COMEX last week which saw COMEX suspend trading twice on Wednesday. The incessant speculative chatter over possible, but unlikely, tapering of the Federal Reserve’s debt monetisation programme continues.
DEMAND IN CHINA remains robust as seen in Shanghai gold premiums. Closing wholesale premiums continue to strengthen, gold closed at a $33 premium at $1,265.69 (see table below) today, up from a $11.25 premium at $1,265.69/oz on Friday.
The Shanghai Gold Exchange saw ‘recorded deliveries’ of 17.950 tonnes bringing November totals to 216.018 tonnes. Gold deliveries on the SGE are headed for another extremely large delivery month once settled as Chinese jewellers and bullion dealers stock up for Chinese New Year.
LATEST CFTC DATA from the U.S. Commodity Futures Trading Commission showed hedge funds got increasingly bearish on gold, with speculators scaling back exposure after the most aggressive pullback in positioning since March 2012 the week prior. Net longs on gold dropped to the lowest level in four months.
COMEX warehouse activity was interesting Friday as physical silver bullion saw very significant movement in COMEX warehouses. 2,554,353 troy ounces were received and 18,335 troy ounces shipped out. HSBC USA was the large recipient of 1.954 million ounces of silver.
JOHN PAULSON, hedge fund billionaire recently told his clients that he won’t invest any more of his own money in his gold fund, owing to an uncertainty over when inflation will accelerate. Paulson’s PFR Gold Fund is reportedly down 63% year-to-date.
It is important to note that Paulson is not selling his gold and is maintaining his very large position in gold which is a vote of confidence by one of the largest investors in the world.
GOLDCORE’S MARK O’BYRNE was interviewed by the SGT Report over the weekend and the video has just been released and can be viewed here .
“We have these huge fundamental factors that should be contributing to higher gold (and silver) prices, and that’s why many people are scratching their heads and asking ‘why isn’t this happening?’”
“We’re down about 25% year to date despite these strong fundamentals.”
Mark explains how for 53 years the Chinese people were banned from owning gold. But that all changed in 2003, and now the enormous demand by 1.3 billion Chinese over the last ten years is causing a paradigm shift, as gold and silver moves from the West to the East.
He says how silver remains very undervalued and will likely reach its inflation adjusted high of $140/oz in the coming years.
Silver remains a tiny market with all above ground refined silver in the world at roughly 1 billion ounces for a total valuation of less than $20 billion at today’s prices.
Therefore, all the silver in the world is worth less than the total market capitalisation of one tech darling, Twitter. It is worth less than the total market capitalisation of Tesla.
All the investment grade silver in the world, is worth roughly what the Federal Reserve prints in one week - $19.6 billion. Incredibly, at $85 billion per month, the Federal Reserve is printing money and buying its own debt to the tune of $19.6 billion a week - “mind boggling”.
As for the race to debase and the manipulation of precious metal prices, Mark says, “They can mess around with the price all they want, ultimately the price of everything in the long term will be dictated by supply and demand, particularly for a physical commodity like gold.”
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