UK Royal Mint Plans To Offer Gold Bullion Storage

Published in Market Update  Precious Metals  on 6 November 2012

By Michael O’Brien

Today’s AM fix was USD 1,691.75, EUR 1,321.58, and GBP 1,058.80 per ounce. 
Yesterday’s AM fix was USD 1,679.00, EUR 1,313.05, and GBP 1,050.82 per ounce.

Silver is trading at $31.39/oz, €24.60/oz and £19.71/oz. Platinum is trading at $1,549.75/oz, palladium at $611.80/oz and rhodium at $1,070/oz.

Gold climbed $6.10 or 0.36% in New York yesterday and closed at $1,684.10. Silver hit a low of $30.64 in Asia, but it ran up to $31.24 in New York and finished with a gain of 0.78%.

Gold is relatively unchanged on Tuesday as investors await the US presidential election results, and remain cautious with news of Greece’s 2 day general strike against the new austerity package plus the upcoming Chinese leadership transition.

Gold $/oz Daily 2007-2012 – (Bloomberg)

A Romney victory would weigh on gold bullion with a potential for a tighter stance on monetary policy. 

The Chinese 18th Communist Party Congress is set to open on Thursday.

The French government received a written warning from the International Monetary Fund to reform its economy or it may follow other crisis hit EU nations.  The IMF’s economic growth figures for France were 0.4% which is half of what Paris is predicting for next year.

The Royal Mint of Britain is going to offer a vaulting service to high net worth clients.

“We will offer a vaulting service to our larger customers,” Shane Bissett, director of bullion and commemorative coin at the Royal Mint, said in a telephone interview today. “At some stage in the future we may look at offering that to individuals.”

Britain’s Royal Mint’s announcement is on the heels of Barclays Plc expansion into opening a precious metals vault for its customers in September and Deutsche Bank will follow suit in March.

In 1968, The Royal Mint of Britain relocated from London’s Tower Hill to Llantrisant, Wales. Here it makes and distributes The British Gold Britannia coins. Britannia coin sales doubled in Q1, and grew “slightly less” in the subsequent months, Bissett said. The mint plans to change gold Britannia coins from 92% pure gold to 99.99%, which will allow it to be more competitive in the international markets, including the Far East and Australasia, he said.

Silver $/oz, 2008-2012 – (Bloomberg)

Gold has seen 11 continuous years of annual gains as QE from the US Fed, Europe, China, and Japan have all committed to programmes to help their fledging economies. The World Gold Council estimates that central banks bought 254.2 tons of gold bullion in the first six months of 2012.

Metal held in bullion-backed exchange traded funds have soared to a record 2,589.516 metric tons on Nov. 2, notes Bloomberg.

(Bloomberg) -- Gold May Extend Drop to $1,631 an Ounce: Technical Analysis
Gold, trading 6.2 percent below this year’s high reached on Oct. 5, may slip further to $1,631 an ounce, according to technical analysis by Commerzbank AG.

“Not only has gold broken a number of support levels, but it has also now broken down from a bear flag,” analysts Karen Jones and Axel Rudolph said in a Nov. 5 report. A bear flag formation, named for its resemblance to an inverted flag on a pole, occurs when a security is declining, pauses and consolidates, and then continues its drop.

The metal broke the support levels of $1,697.30 and $1,693.42, which are the late-March high and 38.2 percent Fibonacci retracement, and may slip further to the 200-day moving average and the 50 percent retracement at $1,663.70 and $1,661.64, the report said. Initial support is the 55-week moving average at $1,671, it said, without giving a timeframe.

Bullion can have further support between the late-August low of $1,646.22 and the early-July peak of $1,625.21 and the 2008-2012 uptrend at $1,631, the report said. The price was little changed at $1,684.60 an ounce at 11:53 a.m. in Seoul.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Fibonacci analysis is based on a theory that prices tend to drop or rise by certain percentages after reaching a high or low. A support level indicates a price at which buy orders may accumulate when a security is falling.

Cross Currency Table – (Bloomberg)

(Bloomberg) -- Gold Imports by China From Hong Kong Gain on Haven Demand
Gold imports by China from Hong Kong climbed 30 percent in September from a month earlier as central banks from the U.S. to Europe and China took steps to prop up their economies, boosting demand for bullion as a haven.

Mainland China bought 69,712 kilograms (69.71 metric tons), including scrap and coins, compared with 53,508 kilograms in August. Shipments were 23 percent more than the 56,896 kilograms a year earlier, data from the Census and Statistics Department of the Hong Kong government show.

Gold is in the 12th year of a bull run as investors seek to hedge against weaker currencies and the threat of rising consumer prices. The metal climbed 4.7 percent in September, gaining for a fourth month, as the Federal Reserve announced a third round of so-called quantitative easing, the Bank of Japan expanded its asset-purchase program, the European Central Bank said it is ready to buy bonds of indebted nations and China approved a $158 billion subways-to-roads construction plan.

“If you look at the jump in the year-to-date imports then it becomes clear that there’s also increasing asset allocation into the bullion by institutions” to preserve wealth, Liu Xu, vice manager for research at Capital Futures Co., said by phone from Beijing today.

Shipments almost tripled to 581,848.5 kilograms in the first nine months from 203,646.4 kilograms a year earlier, Bloomberg calculations show. China doesn’t publish such data.

Exports of gold to Hong Kong from China were 28,152.5 kilograms in September, up from 26,497 kilograms in August, according to a separate statistics department statement. Shipments were more than the 6,811 kilograms a year ago. They were 228,544 kilograms in the first nine months from 68,354 kilograms a year earlier, according to Bloomberg calculations.

Gold for immediate delivery fell 0.2 percent to $1,674.20 an ounce at 4:54 p.m. in Singapore, paring gains this year to 7.1 percent. Holdings in gold-backed exchange-traded products expanded to an all-time high on Nov. 2, data compiled by Bloomberg show.

(Bloomberg) -- Gold Seen Falling to $1,647 by UBS if Romney Wins U.S. Election
Gold may initially drop to $1,647 an ounce, “with the potential for a deeper follow-through,” if the Republican candidate Mitt Romney wins the U.S. presidential election, according to UBS AG.

President Barack Obama’s victory would be “the best case scenario for gold” and may see prices initially rally to $1,725 an ounce, Edel Tully, a London-based analyst at UBS said in a report e-mailed today.

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