Gold & Silver Digest: 1/11/13

Adam Taggart
By Adam Taggart on Fri, Jan 11, 2013 - 5:47pm

The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.

If you have articles to submit for the next digest, please email them to me by clicking here.

1/11/13 5:09 PM EST US close metals price quotes from Finviz


Fox Business: U-Turn- Gold Slumps After Rally

Gold prices fell on Friday, with buyers cashing in gains after an earlier rally failed to take the precious metal above the previous session's high, with selling accelerating as it slid below a key chart level at $1,661 an ounce.

The precious metal slid back below its 200-day moving average after breaking above it on Thursday after the European Central Bank gave no indication following a policy meeting it would cut rates, prompting a rally in the euro.

Jesse's Café Américain: Gold Daily and Silver Weekly Charts

Coiling for a move, pretty much as expected.

Watch out for the debt ceiling battle. It could be a wild ride.

Forbes: Uncertainty Still A Hallmark For Gold; Market May Hold Range Bound

(Kitco News) - It seems the only certain thing one can say about the gold market is that uncertainty has been a hallmark of trading.

After climbing on the back of a stronger euro this week, gold prices fell sharply Friday erasing much of the week’s gains in one day, with the market testing the current range within one session. Given the choppy trading action, market participants said they wouldn’t be surprised if next week’s direction was much of the same – range bound.

Despite Friday’s losses, it squeaked out a win for the week. The most-active February gold contract on the Comex division of the Nymex settled at $1,660.60, up 0.71% on the week. March silver settled at $30.408 an ounce, up 1.54% on the week.

NumisMaster: Bullion Delays Get Longer

Since the last time I reported the occurrence of slower deliveries of some bullion-priced gold and silver coins and ingots, supplies have gotten even tighter. As a result, even more premiums are inching upward.

On Monday morning, here is what one major wholesaler was reporting for delayed availability: In gold coins and bars: Half-ounce and tenth-ounce American Eagles, 1-ounce Buffaloes, Canadian Maple Leaves, South African 1 ounce Krugerrands, kilogram-sized gold bars, British sovereigns, Swiss and French 20 francs, Austrian 100 coronas, Mexican 50 pesos and Australian Kangaroos.

Financial Sense: OMFIF Report Advocates the Official Remonetization of Gold

In a report published today, the Official Monetary and Financial Institutions Forum (OMFIF), a global organization of central banks and sovereign wealth funds, recommends that gold be remonetized for use as international money, alongside major currencies. OMFIF gives a number of reasons for this but they boil down it to gold's historical role in establishing and maintaining confidence and stability in international monetary relations. Such confidence and stability have dramatically declined as a result of the global financial crisis that began in 2008, to the detriment of the global economy. Falling back on the solid foundation of gold is the best available way to eventually move forward with healthy and sustainable growth in global trade, to all countries' mutual benefit, and to bring an end to the escalating 'currency wars' that increasingly threaten the global economy.

Bloomberg: Gold Seen Advancing as Much as 14% This Year in LBMA Survey

Gold will climb as much as 14 percent this year and average $1,753 an ounce after posting its longest winning streak in at least nine decades, a London Bullion Market Association poll of traders and analysts showed.

The mean response of 23 participants shows the metal will reach $1,914, trading above $1,529 through December. Prices averaged a record $1,669 in 2012. Silver will rise as much as 29 percent, platinum 13 percent and palladium 23 percent, the LBMA said today in an e-mail.

The Economist: Treasure chest - Love of gold becomes a macroeconomic problem

The wardrobe of Datta Phuge, a businessman in Pune, in west India, has a new addition. Weighing 3.25 kilos and costing a quarter of a million dollars, it is a chain-mail shirt made of gold. “I always move around with bodyguards,” a glittering Mr Phuge reassured the Pune Mirror. Sadly, India’s gold obsession is no laughing matter. India is the world’s largest consumer. Surging gold imports have helped widen the current-account deficit, which was an alarming 5.4% of GDP in the quarter to September (see chart). On January 2nd the finance minister appealed to the nation to buy less gold.

Resource Investor: The Fed is Likely to Remain Gold's Best Friend

Recent announcements from the US Federal Reserve implying a possible end to very loose monetary policy has created upside resistance for the gold price. However, growing desperation among policy makers to bring about sustained economic recovery is likely to be supportive for the yellow metal. 

Last week the Fed's FOMC minutes revealed that a number of its members thought it appropriate to slow or stop asset purchases by the end of 2013. That came as quite a shock to the gold market, which sold off in a knee-jerk reaction. The other black cloud for gold bulls is the Fed's target to help bring the unemployment rate to below 6.5%, compared with 7.8% now without overly stimulating forward inflation expectations. Real Silver Highs 4

Silver bearishness has naturally mushroomed following this metal’s rough December. A growing chorus is declaring silver’s secular bull finished, implying it must have peaked after silver’s dazzling April 2011 surge. But secular bulls climax in popular speculative manias, which dwarf the silver action of a couple springs ago. Looking at silver in real inflation-adjusted terms drives home the point its bull is far from over.

For any multi-decade price comparison, adjusting for inflation is essential. A dollar today is worth a lot less than a dollar in the past. The Federal Reserve keeps conjuring up new fiat dollars out of thin air, inflating the money supply. As it grows faster than the underlying economy, relatively more dollars compete for relatively less goods and services. This monetary inflation bids up the prices of everything.

Mineweb: Public U.S. gold audit petition hits White House website

The Gold Anti-Trust Action Committee (GATA) and other advocates--who argue the quantity of gold held by the world’s central banks, international bullion banks, and future exchanges is overstated--are backing a petition demanding an assayed public audit of the U.S. gold reserve, published Wednesday on the White House petitions website.

The petition reads: “As of 12/31/2012, the US Treasury claims to hold 261 million ounces of gold at Denver, Fort Knox, West Point and at the Federal Reserve Bank of New York. This bullion was last subjected to a full physical audit in 1953.”

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