Gold & Silver Digest: 9/12/13

By jasonw on Thu, Sep 12, 2013 - 11:33pm

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.

9/12/13 9:44 PM EST US close metals price quotes from Finviz

Reuters: Gold falls 3 pct after sudden early drop saps momentum

Gold dropped 3 percent on Thursday, as a sudden price tumble in the futures market shattered investor confidence, sending the metal to its biggest one-day drop in more than two months.

Prices also came under pressure as tensions with Syria eased and U.S. data reinforced expectations that the U.S. Federal Reserve will this month start to unwind its monetary stimulus that has bolstered gold prices for the past four years.

Silver sank over 5 percent and platinum group metals were lower after gold's big jolt lower early in London trading.

Forbes: FOCUS: Gold Prices Supported By 'Three Lines Of Defense'

Although gold prices have struggled to make new highs, strong technical support for spot gold at $1,350 to $1,355 an ounce helps to create a floor, at least for the short-term, say analysts,.

Ole Hansen, head of commodity strategy at Saxo Bank, said three technical factors make $1,350 an important support level, which is why it is drawing so much attention.

Bloomberg: Gold Futures Fall Most in Nine Weeks on Fed Stimulus Bets

Gold futures tumbled the most in nine weeks after a report showed U.S. jobless claims last week dropped to the lowest since April 2006, boosting speculation that the Federal Reserve will scale back fiscal stimulus soon.

First-time claims for unemployment insurance fell to 292,000 in the week ended Sept. 7, government data showed. Analysts forecast 330,000. A Bloomberg survey on Sept. 6 showed that the Fed will reduce bond purchases by $10 billion this month. Gold rose to a three-month high on Aug. 28 on concern that the U.S. would launch an attack against Syria. Prices fell 0.7 percent last week as fears of a strike diminished.

GoldSilverWorlds: Thomson Reuters Expects A Decent Gold Price Recovery In 2013

The first eight months of 2013 saw a major rebalancing in the gold market with an exodus of professional investors countered by an explosion in grass roots demand. From their peak at the start of the year through to early August, Exchange Traded Fund (ETF) holdings fell by 26% and this, coupled with the withdrawal of momentum-driven money, contributed to a 30% intraday price decline from the high of $1,696/oz in January to a low of $1,181/oz at end-June. The price fall triggered a huge leap in physical bar-hoarding and coin demand, while also marking a possible end to the decade-long substitution away from gold in the jewellery market.

The first half of 2013 saw an increase of more than 550 tonnes of gold offtake in jewellery, investment bars, coins and medals. This helped to reverse the price fall, prompting a recovery towards $1,440 by end-August. The rebound in demand was widespread, through the Middle East and South and East Asia, and highlighted the Indian government’s continued concern about the contribution of gold imports to the country’s trade deficit. This year looks set to be the first year in modern times when China will overtake India as the metal’s number one consumer, by as much as 100 tonnes.

MineWeb: Jumping Chinese gold imports on pace to 1,000 tonnes

Even as the Indian government is seeking to restrict gold imports and is coming down hard on gold loan companies across the country, China could well be on its way to import 1,000 tonnes of gold for the whole year if recent buying trends continue. 

China has imported through Hong Kong 129 tonnes of physical gold in July, from the 113 tonnes it imported in June, according to the Hong Kong Census and Statistics Department.

King World News: This Is Why The Price Of Gold & Silver Was Crushed Today

Today one of the savviest and most well-connected hedge fund managers in the world spoke with King World News about the takedown in gold and silver.  Outspoken Hong Kong hedge fund manager William Kaye, who 25 years ago worked for Goldman Sachs in mergers and acquisitions, had this to say in his powerful interview.

Kaye:  “The capping strategy is in place.  There is no evidence as of yet that the Fed and the BIS, who I am certain are behind all of this, have the capability, even if they wanted to, to push things much lower because they don’t have the physical gold that would be necessary to be delivered.

But they do have the ability in markets, that still aren’t quite as liquid as they are normally, to push prices around a bit and create some downside volatility....

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