Market Update GoldCore 7 June 2013

Market Update GoldCore

India Should Monetise 20,000 Metric Tonnes Of Gold

Today’s AM fix was USD 1,399.50, EUR 1,066.69 and GBP 906.12 per ounce.
Yesterday’s AM fix was USD 1,396.50, EUR 1,068.89 and GBP 909.42 per ounce.

Gold gained $3.90 or 0.28% yesterday to $1,402.10/oz and silver finished down 0.09%.

Gold initially traded down over uncertainty on whether the U.S. Fed will decrease its QE and adjusted to the news of India's hike on import duties for the yellow metal.

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India should monetise their huge gold stockpiles of over 20,000 metric tonnes according to the World Gold Council (WGC) as reported by Bloomberg this morning.

Exactly how the considerable store of wealth that is the gold of Indian people could be monetised was not said.

The move comes close on the heels of a desperate series of steps taken by the Indian government as well as the central bank, aimed at reining in gold imports which is contributing to the rising current account deficit.

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Gold In Euros, 5 Year - (Bloomberg)

The World Gold Council said that they recognise the need for the recent government measures to contain gold imports, but warned that if such a strategy remains in place for long, it may lead to proliferation of the grey market, like it was before India liberalized gold imports about 15 years ago.
Indeed, there already reports of gold being traded in the black market in India. India's consumer inflation remained high at 9.39% in April while deposit rates in banks are between 6% and 8.5%.
Governments, in India and internationally, need to manage their economies better and rein in inflation and make their currencies a store of value that people will trust.
People who own gold will be seen as prudent in time ... much more prudent than those who discourage gold ownership or those who do not own any gold whatsoever.

News From Around The World

U.S. bullion coin demand still at ‘unprecedented’ levels - US Mint    Reuters
Physical Gold Demand Substantial   FN Arena
The Roubini - Faber Gold Debate   Market Oracle

Insight: Cyprus, Energy & Gold: Wealth Protection In A Lawless World
April's edition of Insight takes a close look at the recent banking crisis in Cyprus and how it is causing other states to consider the imposition of taxes on depositors' savings. The reasoning behind these 'taxes' is to part cover the colossal levels of  indebtedness that most nations find themselves in.

Chris Sanders, our Insight April contributor, maintains that it is only capital accumulation enabled by real economic growth that can alleviate the massive levels of indebtedness. Unfortunately, Sanders finds that this is nigh on impossible given the excessive energy costs required, or as he puts it, 'the marginal energy to power such growth is not there to do so.'

On April 15th, a small number of traders executed a suspicious sale of futures on the COMEX in New York which resulted in an 18% fall in the price of gold. Sanders points out that on the one hand we have this level of indebtedness that isn't going to go away, and on the other, we have a financial system that appears to operate outside the general rule of law. When you take everything into account, Sanders surmises that it's all a great advertisement for holding gold or silver in secure storage on an allocated basis.

ENDS

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