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Iran Oil Flow Slows, Price Fears Rise – Risk of War to Support Gold

Tyler Durden's picture




 

Submitted by GoldCore

Iran Oil Flow Slows, Price Fears Rise – Risk of War to Support Gold

Gold’s London AM fix this morning was USD 1,655.75, EUR 1,245.86, and GBP 1,041.22 per ounce. Yesterday's AM fix was USD 1,677.00, EUR 1,255.62 and GBP 1,052.00 per ounce.

Silver is trading at $31.84/oz, €23.97/oz and £20.05/oz. Platinum is trading at $1,630.20/oz, palladium at $639./oz and rhodium at $1,350/oz. 


Cross Currency Table – (Bloomberg)

Gold fell $18.20 or 1.84% in New York yesterday and closed at $1,663.10/oz. Gold traded sideways in Asia prior to seeing a slight climb to $1,665/oz in late Asian and early European trading prior to price falls in Europe .

Gold continues to struggle due to poor short term technicals and a slight decrease in global physical demand in recent days - particularly from India.

Gold closing below the 200-day and 100-day daily moving averages yesterday further clouded the technical picture and a weekly close below the DMAs would likely result in further price weakness. 

End of the quarter book squaring and selling and profit taking are likely contributing to the weakness. Dollar strength and equity weakness may have also lead to selling on the COMEX as speculators covered losses in equity markets.

The durable goods and future business investment numbers were poor and fell short of expectations, raising the prospect that economic growth in Q1 may be below the Fed’s and the bullish forecasters estimates. 

The poor numbers further clouded the US economic outlook and raised the prospect of continuing ultra loose monetary policies and QE which will be bullish for gold. 

Markets await more clues from US economic data. Negative US GDP and US weekly jobless claims may lead to safe haven gold buying. 

European investors will focus on the outcome of the Italian bond sale as Rome aims to sell up to 8.25 billion euros of debt. 

Clients are reluctant to buy the dip fearing further weakness and March has been poor for physical gold sales to investors and store of wealth buyers.

However, gold's fundamentals of broad based global demand remain sound and mean that this is likely another period of correction and consolidation.

The primary characteristic of all bull markets is that they climb a "wall of worry." Gold is continuing to climb a "wall of worry" with much bearish sentiment and frequent assertions that it is a bubble.

While oil prices came down yesterday partly due to speculation that the US might tap its strategic reserves, the increasing risk of a confrontation between Iran and Israel, the US and many western powers remains real and should support oil and gold prices.


Global Commodity Prices and Data – (Bloomberg)

Iran's oil exports have dropped in March as buyers prepare for sanctions, and shipments are likely to shrink further if Obama determines by Friday that markets can adjust to less Iranian oil and tightens sanctions even further.

Sanctions could eventually leave half of Iran's oil output cut off from international markets, according to analysts and officials.

Iran is also being excluded from global commerce and the global economy by being locked out of the international payment system – SWIFT.

SWIFT, the Brussels based clearing house, announced last week it will cut services to Iranian banks on foot of European sanctions, in order to comply with the EU Council. The service denial includes Iran’s central bank, which processes Iran’s oil revenues. Some 30 Iranian banks will be blocked from doing international business.

History suggests that the trade, economic and currency war with Iran may soon degenerate into an actual war. Increasingly, the regime in Iran has little to lose in engaging in a more aggressive foreign policy – including attempting to close the strategically important Straits of Hormuz.

These tensions should see gold well supported and a military confrontation would see oil and gold rise rapidly in value on inflation hedging and safe haven buying.

OTHER  NEWS

(Bloomberg) -- Gold May Gain 8.5% on Moving Average, Hammer: Technical Analysis 
Gold may gain 8.5 percent to $1,802 an ounce after the metal formed a so-called hammer pattern last week and held above its 55-week moving average, according to technical analysis by Citigroup Inc.

“The low may already be in place” after the metal held above the moving average and developed a hammer pattern, formed on a candlestick chart by a short body at the top of a long lower wick, resembling a hammer, the bank said. Prices may advance to $1,802, near the November high, before climbing to near September’s record of $1,921.15, Citigroup said.

“We continue to believe a platform is being set for a medium-term rally,” Tom Fitzpatrick, chief technical analyst at Citigroup in New York, wrote in a March 27 report with colleagues Shyam Devani and Jim Zhou. “The price action reminds us of 2006, which saw gold stabilize at the 55-week, turn back and ultimately carry on to make new highs.”

Gold for immediate delivery traded at $1,660.82 an ounce by 6:20 a.m. in London today, after climbing for the past 11 years. Prices are up 6.2 percent in 2012 even after sliding 2.1 percent the past month as signs that U.S. growth is accelerating pared investors’ expectations the Federal Reserve will buy more debt.

With the exception of in 2008, bullion hasn’t traded more than 1 percent to 3 percent below its 55-week moving average in the past decade, meaning prices of $1,585 to $1,615 may be a “buy zone,” Citigroup said.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.

(Bloomberg) -- The World Gold Council said it has another draft plan to combat “conflict gold”
The World Gold Council said it has another draft plan to combat “conflict gold”

The proposals to help miners produce metal that is free from fuelling or financing armed conflict were produced after comments from governments, investors and researchers, the producer-funded council said today in a statement on its website. Comments are being requested by June 30.

(Bloomberg) -- UBS Positive on Palladium, Platinum, Iron Ore Over Three Months 
UBS AG has positive outlooks on palladium, platinum and iron ore over the next three months, according to an e-mailed report. There were “subdued price outlooks” for gold, zinc, thermal coal, uranium and alumimum, and “downside risks” for copper and nickel, UBS said.

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

NEWS

Reuters
Gold gives up early gains; tracks equities lower

BusinessWeek
Indian Jewelers Extend Strike

BusinessWeek
Palladium Seen Beating Gold With Record Car Sales

Bloomberg
Goldman Is Bullish on Oil and Gold

Financial Times
Mitsubishi invests in North American platinum

COMMENTARY

FTAdvisor
GoldCore via FT: Uncertain Times Require Certain Diversifications

MarketWatch
The Next Leg of Gold’s Bull Run

GATA
Gold Price Suppression Caught Red-handed

The Street
Gold Is Manipulated -- But That's Okay

 

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Thu, 03/29/2012 - 07:43 | 2300033 PY-129-20
PY-129-20's picture

Spiegel just reported a few minutes ago that Israel will be using an airbase in Azerbaijan and is citing Foreign Policy.

[LINK]

Thu, 03/29/2012 - 07:59 | 2300057 BW
BW's picture

Obama State Department set to cede oil-rich Alaska islands to Russia

 

http://www.dailypaul.com/223616/obama-state-department-set-to-cede-oil-rich-alaska-islands-to-russia

Thu, 03/29/2012 - 08:39 | 2300141 10mm
10mm's picture

We will give this,let us take care of Iran buisness and shut up.

Thu, 03/29/2012 - 10:29 | 2300466 Benjamin Glutton
Benjamin Glutton's picture

Ratified in 1990 and signed by GHW Bush...but hey who needs accuracy?

 

 

http://www.un.org/Depts/los/LEGISLATIONANDTREATIES/PDFFILES/TREATIES/USA...

Thu, 03/29/2012 - 12:29 | 2300932 A Nanny Moose
A Nanny Moose's picture

Does the legal fiction of the USSR still exist? If not, is such a treaty still valid?

Thu, 03/29/2012 - 15:02 | 2301458 RichardP
RichardP's picture

Irrespective of the 1990 agreement, the U.S. has never laid claim to owning those islands - which are off the coast of Siberia, not Alaska.

Thu, 03/29/2012 - 11:13 | 2300650 malikai
malikai's picture

Exactly. Look at the maps and maritime border. Question answered.

Thu, 03/29/2012 - 07:43 | 2300034 LawsofPhysics
LawsofPhysics's picture

In general the ME wants higher oil prices, period.  But after 50 years of pumping seawater into their oil fields I can understand the desire to get as much as they can for what they have left.  Makes sense, I'd do the same thing.  All things physical, bitchez.

Thu, 03/29/2012 - 07:45 | 2300037 CharlesH
CharlesH's picture

This morning, i read some newspapers about giving transparency about oil reserves in western countries.

2 months ago i heard on some radio station that they have reserves for about 3-5 years.

My conclusion is that they really want to attack iran, no matter what in the coming 3-5 years.

Let's wait and see :)

Thu, 03/29/2012 - 07:48 | 2300042 q99x2
q99x2's picture

Banker sanctions are a threat to a free world and the futures of everyone.

Total control is total destruction.

Peace on earth and the angels sing.

Buddhsm changes the sound of the ring.

Thu, 03/29/2012 - 08:04 | 2300064 CharlesH
CharlesH's picture

Also, in politics, Obama will be elected next term. It's simple... Medvedev goes, Putin comes. so Obama follows.

The only diffrence is that Putin has 6 years, while obama got 4. Verry interesting :)

Thu, 03/29/2012 - 08:11 | 2300080 Gunga
Gunga's picture

Iran would be giving the US a reason to attack immediately if they close the Straights of Hormuz. To sustain themselves, I think they would be better off developing non dollar denominated trade relationships with India, China, Russia and other nations not closely aligned with the US and UK.

Thu, 03/29/2012 - 08:54 | 2300168 Element
Element's picture

They could close the strait but that would be, "going full-retard".

They can issue a warning and then sink five of so tankers in one day, then let the US, EU and the rest of the world stew on the resulting market reality-check.

Iran can saturate the Strait with mines, torpedos and missiles for many months if they actually want to or need to close it.

So they will probably go for gradual but expensive a-symmetric phased escalations (sinkings), to get the US and EU to drop the sanctions, before they are forced to actually close the strait.

Unless, that is, a US-Israeli attack forces Iran to destroy anything they can hit.

At this point Iran must escalate, as sanctions bite, and this will probably involve sea mines and torpedos hitting tankers, and/or navy ships.

The reality is that anti-ship missiles are easier to detect and nullify, than sea mines and torpedos.

Long oil-skimmers and booms.

Thu, 03/29/2012 - 10:19 | 2300435 Redneck Hippy
Redneck Hippy's picture

Or they could back down and stop developing nuclear weapons.  Its not like Israel is ever going to give them a chance to use it, anyway.

 

 

Thu, 03/29/2012 - 15:12 | 2301481 RichardP
RichardP's picture

Or they could back down and stop developing nuclear weapons.

There is no proof that Iran is developing nuclear weapons.  The point of the U.S. and Israeli saber-rattling is not to get them to stop producing nuclear weapons.  The point is to get Iran to allow inspectors into all aspects of their nuclear program, in order to verify that the enrichment is indeed for peaceful purposes.

The U.S. and Israel are not trying to stop Iran from using nuclear weapons against Israel.  They are trying to stop the arms race that will ensue in neighboring counties if Iran does succeed in developing nuclear weapons.  It won't do anybody any good to suddenly have another four or five or six countries in the region developing their own nuclear weapons.

Thu, 03/29/2012 - 18:34 | 2302064 MeelionDollerBogus
MeelionDollerBogus's picture

or Iran could continue as-is not developing nuclear weapons. The entire sham that Iran has nuclear weapons OR a nuke weapon program is busted. Mossad, CIA, IAEA have all come out saying Iran has no nuclear weapons program. None. Nada. Zipporooni.

If Israel makes too big a strike on Iran, Russia could strike Israel, at least in the air, possibly Tel Aviv. It's best not to push one's luck in going full retard.

Russia & China have final say here, not Israel, not the USA.

Thu, 03/29/2012 - 08:14 | 2300085 savagegoose
savagegoose's picture

teach banks about bank sanctions, withdraw all your money, and buy gold oand silver.

Thu, 03/29/2012 - 08:16 | 2300089 ivars
ivars's picture

Silver seems to be going down-final leg- till the end of April/early May. That would be the time to go seriously long. Gold may do the same, may start to decouple a bit on the upside during April, GSR increasing for some time.

http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&st=0&sk=t&sd=a&sta...

Thu, 03/29/2012 - 09:15 | 2300237 WmMcK
WmMcK's picture

Thank you!

Thu, 03/29/2012 - 18:32 | 2302057 MeelionDollerBogus
MeelionDollerBogus's picture

Indeed. I say now's the time to stack silver & gold and it wouldn't hurt to get a GLD straddle or for the more daring, debit-spread or straight out GLD call. Might want to watch it's over 90 days... but if that's too daring then stick with the bars & coins.

2012 mar 25 gold vs silver | silver to 50, gold to 1813, 2012 July

Thu, 03/29/2012 - 09:04 | 2300199 Fix It Again Timmy
Fix It Again Timmy's picture

After they killed Kennedy, the military/industrial/congressional/judicial/media complex has become the only show in town, forget rationality and reason - they are no where to be found....

Thu, 03/29/2012 - 11:06 | 2300612 Freddie
Freddie's picture

It was more LBJ than anyone else and his TX cronies.  Search it out on youtube.  The Kennedy clan was stupid to associate with LBJ's TX nest of snakes.  Karma is a bitch and Daddy Joe paid the price.  The Kennedys screwed over and did business with a a lot of unpleasant people.  LBJ and his TX pals made insane money off Vietnam.

I do agree with you but really post Ike things went downhill though FDR was scum.  Ike warned us.  

Thu, 03/29/2012 - 12:24 | 2300853 4horse
4horse's picture

" _ _ _ _ _ they _ _ _  _ _ _ _ _ _, the military/industrial/congressional/judicial/media complex _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _  - they are no where to be found...."

 

certainly not after this near-infinite list

your very own infinite jest  .  .  .

here expressed after 50yrs with the clarity and true courage of an ultimate metaph-ff-ff
-fficist    fi_ _-_n-the-b_ ank_    doing Godswerk

 

 

 

 

yeh. that's the ticketG_D Did It

Thu, 03/29/2012 - 09:32 | 2300294 MeetTozter
MeetTozter's picture

The "work arounds" that Iran will use to counteract US economic bullying will do permanent damage to the US economy and the whole country.

Thu, 03/29/2012 - 14:34 | 2301271 oldman
oldman's picture

@MeetTotzer

I had to ding you for that, sorry.

You had right until you added the first nine words:

 

"---------US economic bullying will do permanent damage to the US economy and the whole country."

Just kidding---you can say anything anyway you want on ZH---the outcome remains the same

thanks                om

 

Thu, 03/29/2012 - 10:18 | 2300429 Redneck Hippy
Redneck Hippy's picture

1) Oil dropped yesterday because of concerns about China (i.e. drop in demand).

2) China is a big buyer of gold.

3) Survey the other day found that Americans like gold over all other investments by a wide margin (Glen Beck commercials and 24/7 ads on CNBC having an effect)

4) Retail investors are always wrong.

5) Gold is now unchanged for the day.  Oil is lower.

6) The cognitive dissonance on Zero Hedge concerning gold is rising. People who are rational on all other subjects are stuck in cult like adherence to precious metals.

7) Sell silver too!

Thu, 03/29/2012 - 10:53 | 2300555 Laddie
Laddie's picture

Not even considering the assassinations of scientists, the attempts to have an "Iranian Spring"  the bombings and other terrorism of Iranian projects by Mossad and CIA assets, just these economic sanctions are Acts of War against Iran.

By law ISRAEL gets FIRST DIBS on the US Strategic Oil Reserves, amazing, but TRUE.

The government does not care about the average American, least of all the paleskin variety, they DO care about their Master's voice.

"I've never seen a President — I don't care who he is — stand up to them. It just boggles the mind. They always get what they want. The Israelis know what is going on all the time. I got to the point where I wasn't writing anything down. If the American people understood what a grip these people have got on our government, they would RISE UP IN ARMS. Our citizens certainly don't have any idea what goes on."
Thomas H. Moorer (1912 - 2004) Admiral, US Navy & Chairman, Joint Chiefs of Staff during interview on 24 August 1983

 

Thu, 03/29/2012 - 12:20 | 2300909 hedgehog9999
hedgehog9999's picture

GOLD IS DONE hopeful goldbug bitchez!!!.......

Paper has won!! for a few more years....

PM  Trend lines violated to the down side icluding the famous $XAU/GOLD ratio that hit a low in October 2008.

GOLD will be lucky if it can sustain 1050.

AS for OIL, that's a different story... if war breaks out, OIL at $250 is not unthinkable and it will break ALL!!! stockmarkets and precious metal stocks over and above the gold dive as energy is a big component of mining costs......

 

Hedgehog.

Thu, 03/29/2012 - 14:22 | 2301318 oldman
oldman's picture

@hedgehog

I don't know about $1050, but I hope so. The shock and awe with which the machine prices gold is incredible because it is so 'in your face' that each break is just another 'Fuck you!' to the street. I guess when you have enough fire power you can do as you please with anyone's mother.

I'm kind of tired of it all---taking a beating on all is not so much fun--but mine is a hedge against the dollar devaluation that is coming---unless we here on ZH have just completely brainwashed ourselves.The abundance of so many recently posted(last six months) rather unsophisticated comments., reminds me of 1980 when gold sold off from $500(?); it cleaned out all of the hicks and sent them packing. $1050 seems unlikely, but with this phony market anything is possible---we are no longer in a real market.

Or maybe, this oldman is as brainwashed as the rest           it really doesn't matter, I'm a hedger       om

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