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Gold Safe Haven in November, Rises 1.8% As Central Banks Further Debase Currencies

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From GoldCore

Gold Rises 1.8% As Central Banks Further Debase Currencies – Gold Safe Haven in November

Gold is trading at USD 1,746.90, EUR 1,295.30, GBP 1,111.10, CHF 1,589, JPY 135,700 and AUD 1,706.4 per ounce.
Gold’s London AM fix this morning was USD 1,750.00, GBP 1,113.02, and EUR 1,298.03 per ounce.
Yesterday's AM fix was USD 1,704.00, GBP 1,095.61, and EUR 1,282.46 per ounce.

 

Cross Currency Rates

Gold is marginally higher today in dollars after yesterday’s nearly 2% gain. Yesterdays’ PM fix was not the same as the AM fix after the central bank intervention saw gold surge nearly 2%. The highly coincidental exact AM and PM fixes for 2 consecutive days may have been an unusual anomaly.

Gold is at a 2-week high today as inflation concerns saw gold rise sharply after the Federal Reserve and the world’s major central banks took coordinated action to prevent the euro-zone debt crisis from igniting a global financial meltdown.

 

Gold in November in USD – 30 Days (Tick)

The U.S. Federal Reserve, the European Central Bank and the central banks of Canada, Britain, Japan and Switzerland said they would lower the cost of existing dollar swap lines by 50 basis points from next Monday (December 5) and arrange bilateral swaps to provide liquidity for other currencies.

It was a desperate move to prevent what BOE governor King this morning called a ‘systemic crisis’.

China’s central bank cut reserve requirements for commercial lenders yesterday for the first time in three years, in order to ease liquidity issues in the Chinese financial system.

The joint action by the world's major central banks to boost dollar liquidity and provide cheap dollar funding to European banks facing a ‘Lehman moment’ spurred ‘risk on’ rallies in commodities and equities.

Equity indices in the EU, US and Asia surged after the measures but already nervousness has crept back in and the CAC and DAX are lower this morning. 

The dawning realization that money markets were very close to complete collapse will likely lead to increased risk aversion again and continuing safe haven demand for gold.

The coordinated central bank action will result in a further increase in the global money supply and the consequent debasement of fiat and electronic currencies and inevitable devaluation of the dollar and all major currencies.

Volatile November Sees Gold Protect Again

Despite November being an extremely volatile month which saw sharp losses in many bond markets and all major equity indices internationally, gold was higher in all major currencies in November.


Gold in November in GBP – 30 Days (Tick)

Gold ended November with a 1.9% gain in US dollar terms, the seventh month of the dollar falling against gold so far this year.
The euro fell 5% against gold in November. The British pound fell nearly 4% against gold.

The Aussie dollar fell nearly 6.5% and the South African rand by 5%.

Thus, gold again protected investors and savers internationally from the global financial crisis.

Gold in November in EUR – 30 Days (Tick)

Gold is now more than 20% higher in dollars and 18% higher in euros and pounds in 2011.

It is only 9% below the record nominal high of $1,920/oz reached in September and given the degree of systemic and monetary risk in the world this price level will likely again be reached by early 2012.

Global Allocations to Gold Remain Miniscule

Global ETF holdings of gold topped 70 million oz for a second day in a row, marking not only a new record high, but meaning that ETF holdings of gold are double those held by the Chinese central bank and are just a few metric tonnes behind those of France, the world's 5th largest official holder of bullion (2,435T).

The risk that ETF gold holdings could be sold resulting in a lower gold prices is over stated.

While the figures sound large in tonnage terms, in dollar terms they are very small – especially when compared to the size of global equity, bond and foreign exchange markets.

The very limited supply and rarity of gold means that the increase in allocations to gold from miniscule levels is sustainable and will likely continue for many years given the radically changed nature of the global financial and economic landscape.

Demand has increased in recent months and years but is increasing from a tiny base.

HSBC estimated in December 2010 that gold remains less than 0.14% of global investable assets.

Therefore, most analysts involved in the gold markets believe that this is not a short term blip rather we are seeing a sustainable trend and investment and monetary demand is set to remain very robust in the coming years.

For breaking news and commentary on financial markets and gold, follow us on Twitter

NEWS

(Reuters) -- Gold hits 2-week high on gains in equities, euro
http://www.reuters.com/article/2011/12/01/us-markets-precious-idUSTRE7AK...

(Bloomberg) -- SPDR Gold Trust Holdings Increase 1.21 Metric Tons
http://www.bloomberg.com/news/2011-11-30/spdr-gold-trust-holdings-increa...

(TheStreet.com)  -- Gold Prices Soar as Central Bank Actions Pummel U.S. Dollar
http://www.thestreet.com/story/11327215/1/gold-prices-soar-as-central-ba...

(Bloomberg) -- Billionaire Prokhorov Touts Gold For Perplexing Times
http://www.bloomberg.com/news/2011-11-30/billionaire-prokhorov-touts-gol...

COMMENTARY

(MarketWatch) -- Gold likely to be higher at year’s end
http://www.marketwatch.com/story/gold-likely-to-be-higher-at-years-end-2...

(ZeroHedge) -- Of Imminent Defaults And Self Deception. Kyle Bass Prepares For The Worst
http://www.zerohedge.com/news/imminent-defaults-and-self-deception-kyle-...

(ZeroHedge) -- "China Will Not Hesitate To Protect Iran Even With A Third World War"
http://www.zerohedge.com/news/china-will-not-hesitate-protect-iran-even-...

(SeekingAlpha) -- Currency Wars: Euro Descending But What Of Gold?
http://seekingalpha.com/article/310942-currency-wars-euro-descending-but...

(Yahoo Finance) -- Ron Paul Comments on Fed Actions in Europe
http://finance.yahoo.com/news/case-missed-ron-paul-comments-185000151.ht...

(Bloomberg) -- Safe Havens for Billionaires: Treasuries 30%, Art 30%, Gold 20%, Other 10%
http://www.bloomberg.com/video/81878266/

 

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Thu, 12/01/2011 - 08:48 | 1934445 Overflow-admin
Overflow-admin's picture

First! Gold, Bitchez!

Thu, 12/01/2011 - 08:51 | 1934447 Overflow-admin
Overflow-admin's picture

OK, let's say something useful: here's the Kitco Gold Index (gold against standard basket of currencies)

http://www.kitco.com/kitco-gold-index.html

 

Today gold has +0.28% due to weakening of USD.

Thu, 12/01/2011 - 08:59 | 1934461 bernorange
bernorange's picture

The amazing thing has been the rise in gold price as traders abandon the COMEX (see COT reports).  Scared off by MF Global?  Choosing physical gold instead of paper gold?  I don't know, but I do find it interesting.

www.pmbug.com

Thu, 12/01/2011 - 09:12 | 1934468 TruthInSunshine
TruthInSunshine's picture

Surprise, bitchez!

 

China is going to be the Black Swan that will prompt pundits to ask "who could have seen it coming?"

I'm not speaking about a slowdown, or even a long, contractionary period in China. I'm speaking of a total meltdown.

Yes, that China which put the 'C' in 'BRIC,' and that gave cnBSc morning wood when they were able to sell Sino[insertwhateverendinghere] as the investment theme of the day/month/year.

And the kicker will be that Chinese Pneumonia takes down Japan next, in the cascading series of falling dominos, when here we are today, with everyone and their mother stating that the EU DebtApocalypse is going to do the global economy in.

China. Black Swan. Peking Duck. Total meltdown. No one could see it coming.

Multinational corporate profit models destroyed, bitchez.

It's already here, bitchez. PBOC just hurriedly eased in a desperate attempt to stop what is now their massive property bubble from collapsing (too late, so sorry).

Official time of Chinese Economy Capsizing:  Just to have a reference point, let's call it December 1, 2011 (though it was likely a year or so prior).

Thu, 12/01/2011 - 08:50 | 1934450 LookingWithAmazement
LookingWithAmazement's picture

Only 1.8 and now again down. After a tsunami of dollars. #GoldCrisis.

Thu, 12/01/2011 - 08:55 | 1934454 Overflow-admin
Overflow-admin's picture
(compared to previous close)
Gold price Change due to Weakening of USD +4.40
Gold price Change due to Predominant Sellers -5.40
Gold Price: Total Change -1.00
Thu, 12/01/2011 - 09:27 | 1934466 Youri Carma
Thu, 12/01/2011 - 09:13 | 1934489 Hmm...
Hmm...'s picture

Gold Rises 1.8% As Central Banks Further Debase Currencies – Gold Safe Haven in November

I just want to make sure I understand this. 

Gold going up 1.8% vs the dollar (much of that rise coming yesterday, no?) makes gold a safe haven.

Does this mean that Stocks, too, are  a safe haven since SP500 rocketed up yesterday and is positive compared to early October?

As always, I'll be junked to hell for my comment, but we really have to be careful assigning "safe haven" status to gold based on November alone... especially when Gold is DOWN 10% from just a few months ago.

Gold will be a safe haven.  But for now despite what people want to think the US Dollar (in the form of UST) is the Safe Haven.  All you have to do is look at what happens to Treasury yields every time a crisis manifests itself.

This will change.  Soon most people will not run to UST, they will run to Gold.  But for now it is a minority of people (including me) who are buying Gold as safe haven status.

Thu, 12/01/2011 - 09:42 | 1934554 79
79's picture

sure, stocks and gold will both do well if the dollar gets pummelled, What you're omitting (don't worry, assume it's on purpose) is that unlike gold, when you're buying a stock you're buying liabilities too, not just assets.  It's those liabilities that are scaring the cr@p out of people, hence why the S&P isn't a safe haven.

Agree about the treasuries part though - I still only know a handful of people that have even considered buying the shiny stuff, and of those, most think it's now overbrought.

Thu, 12/01/2011 - 10:49 | 1934775 Deo vindice
Deo vindice's picture

I'll be junked...

+1

I didn't junk you.

Thu, 12/01/2011 - 11:19 | 1934879 Snidley Whipsnae
Snidley Whipsnae's picture

I suppose this article is slanted toward the short term move up in gold because of the comments about gold ETFs and how much gold they have 'bought' or 'hold' or 'have a claim on'.

The article says that world ETFs have as much gold ~ as France. Do they really? Or, do the ETFs have a bunch of paper claims on gold? Some ETFs actually hold gold, some hold paper claims on gold. Not the same thing.

Besides, why not look at what the asset (gold) has done over a long time span, since most holding physical gold are not interested in trading it for fiat, or other paper assets?

BTW, how is Celente making out with his MF Global paper assets?

 

Thu, 12/01/2011 - 10:00 | 1934605 youngman
youngman's picture

What word are we drinking to today?????

Gold has been very quiet I think for all the turmoil going on.....I would have thought it would have gone a lot higher

Thu, 12/01/2011 - 10:34 | 1934610 cranky-old-geezer
cranky-old-geezer's picture

 

 

Gold Safe Haven in November, Rises 1.8% As Central Banks Further Debase Currencies

This is the overall story of the world financial system for the forseeable future.  Out of control government spending requiring more sovereign debt requiring more currency printing gradually debasing currencies down to toilet paper.

Pure Econ 101 textbook inflation as far as the eye can see.

Falling value of every fiat currency and every asset denominated in a fiat currency is a natural result of this chronic ongoing inflation.

Rising prices on every in-demand commodity, product, and service under the sun is a natural result of this chronic ongoing inflation.

In layman's terms, the dollars in your paycheck are gradually losing puchasing power while prices on everything you need are rising, gradually pushing you closer to poverty, all because your government won't control their god damn spending.

Bottom line, your government is stealing your wealth and spending it themselves.

THAT'S why governments love non-redeemable fiat currencies. They can loot their citizens into poverty.

Thu, 12/01/2011 - 10:33 | 1934720 shokdee
shokdee's picture

Meanwhile in Thailand ...

Thailand seems to have taken advantage of the recent correction and consolidation in the gold price to continue its long-term gold buying programme. Having already made three significant purchases in the last year, the Thai government added another 500,000 ounces of gold to its reserves in September, raising its total gold reserves to 4.9 million ounces.

Gold is deeply grounded in Thai culture, commonly given as high-value gifts to friends and family, and many Thais, regardless of income level, routinely allocate a large portion of their savings into gold jewelry, coins, and bars. Thailand’s former name, Siam, even means “gold” in Sanskrit. Old traditions die hard, and despite recent price volatility, the trade is flourishing.

“But almost all of our customers, poor and rich, understand that gold has value that no one else can take from you. This is common sense.”

http://www.24hgold.com/english/news-gold-silver-Thailand%20s-Gold-Rush.a...

Thu, 12/01/2011 - 10:40 | 1934751 Bansters-in-my-...
Bansters-in-my- feces's picture

Gold is more "managed" than Steven Harpers hair.

Thu, 12/01/2011 - 10:55 | 1934767 Deo vindice
Deo vindice's picture

Until 'de base' of 'de currency' is Gold, it will continue to be debased.

Thu, 12/01/2011 - 11:31 | 1934918 Ratscam
Ratscam's picture

interesting that no report ever mentions the gold of the Vatican, since they have robbed, stolen and have been donated gold for centuries.
They must be at least the second largest gold holder in the world.

Wed, 12/14/2011 - 07:08 | 1977917 onebir
onebir's picture

Perhaps it's time for gold loses 5% in first two weeks of December for no apparent reason, leading people to wonder if safe haven and gold should be used in same sentence?

(Disclosure - still nervously long gold, mainly because everything else is so scary)

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