Precious Metals Set For Higher Weekly Close And Seasonal Year End Rally

Published in Market Update  Precious Metals  on 9 November 2012

By Michael O’Brien


Today’s AM fix was USD 1,732.75, EUR 1,362.23, and GBP 1,085.55 per ounce. 
Yesterday’s AM fix was USD 1,715.00, EUR 1,347.42, and GBP 1,075.84 per ounce.

 

Silver is trading at $32.19/oz, €25.42/oz and £20.27/oz. Platinum is trading at $1,560.50/oz, palladium at $613.00/oz and rhodium at $1,100/oz.

Gold rose $14.50 or 0.84% in New York yesterday and closed at $1,732.80. Silver dropped to $31.62 in London, then hit a high of $32.412/oz in New York and finished with a gain of 1.76%.

 


Global Commodities – Prices and Data (5 Day)

Gold is 3.35% higher and silver 4.53% higher this week in US dollars in the aftermath of Obama's re-election. 

Gold in euros looks set to break out above €1,400/oz and is 4.1% higher and in sterling gold has risen 3.7% so far this week. Silver is 5.25% higher in euros and 4.8% higher in pounds.

Gold and silver are set for higher weekly closes in all fiat currencies which may negate the recent bearish short term technical picture and set the precious metals up for the traditional yearend rally. 


Gold in USD – 4 Weeks (Bloomberg)

The data clearly shows that November is gold's strongest month and one of silver's strongest months. December, January and February are also strong months - prior to a period of weakness is often seen in March.

Gold edged up on Friday heading for its first weekly gain in five weeks as Obama was re-elected with the highest jobless rate since US President FDR in 1936.

The ECB and BOE left interests unchanged as expected.  However, Mario Draghi commented that the euro zone economy shows negligible signs of recovering before the year-end despite easing financial market conditions. 

The Fed’s ‘QE to infinity’ policy remains and it continues its programme from October 24th to purchase $40 billion per month of mortgage debt and is committed to hold interest rates near zero until mid-2015.


Gold in GBP – 4 Weeks (Bloomberg)


Gold in EUR – 4 Weeks (Bloomberg)

The Bank of Japan on October 30th widened its asset-purchase program for the 2nd time in two months, increasing it by 11 trillion yen to $128 billion.

The US fiscal cliff and geopolitical tensions with Iran (Iranian warplanes fired on US drones last week) only heighten the risk and uncertainty in the markets and are driving safe haven money into gold.

China releases various economic data today starting at 0130 GMT with CPI & PPI for October.

NEWSWIRE
(Bloomberg) -- China Starting Gold ETPs Would Mean Demand Gain, WGC’s Liu Says
ETPs would give domestic institutions, including pension funds, more opportunities to invest in the precious metal, Roger Liu, the director of Far East investments at the World Gold Council, said today at a conference in New York.

China currently has no domestic exchange-traded products backed by gold

(Bloomberg) – Gold Should Be Thought of as Insurance Policy, Wickwire Says
Investors should look at gold as an insurance policy for other financial assets, Joseph Wickwire, who manages $4.5 billion at Fidelity Investments, said today at the Bloomberg Portfolio Manager conference in New York.

Macroeconomic imbalances, reflationary policies and geopolitical tensions will drive prices higher in the long term, Wickwire said. Investors with risk-tolerant portfolios should hold the metal to hedge against volatility in other markets, he said.

“Gold pays off when stocks, bonds and currencies disappoint,” Wickwire said. “A little goes a long way.”

(Bloomberg) -- Pension Funds in Japan Increasing Investment in Gold, WGC Says
Jason Toussaint, managing director at the producer-funded World Gold council, said in an interview in New York.

Seeing increased dialogues among U.S. pension funds to look at commodities, including gold, as an investment, Toussaint said.


Cross Currency Table – (Bloomberg)

NEWS
Gold Traders More Bullish After Obama's Re-Election - Bloomberg

Gold heads for biggest weekly rise since late-Aug - Reuters

Wall Street falls as "fiscal cliff" concern outweighs data - Reuters

Gold jumps over $10 on Iran fears – Fin 24

COMMENTARY
Video: Bouroudjian Says Gold Could Double In 3 to 4 Years - CNBC

Fearful Investors Should Stock Up On Gold – The Financial Times

$100 Silver! Yes, But When? – Silver Seek

For Third Year In A Row, Gold Outperfoming Stocks – Zero Hedge

Video: DOW to Collapse to 6,000 – CNBC

Video: Max Keiser with Ned Naylor-Leyland about Germany’s gold, JP Morgan’s shorts & Chilton’s ‘investigation' – Max Keiser


0 Comments