Market Update GoldCore 11 June 2013

Market Update GoldCore

Today’s AM fix was USD 1,376.75, EUR 1,041.89 and GBP 887.37 per ounce.
Friday’s AM fix was USD 1,410.00, EUR 1,065.12 and GBP 905.53 per ounce.

Gold fell $33.30 or 2.36% on Friday to $1,378.70/oz and silver slid to a low of $21.56 and finished down 4.89%. Gold was down 0.45% and silver fell 2.75% last week.

Gold is marginally lower in dollars today but has eked out gains in Japanese yen and Australian dollars both of which have fallen. The slightly lower close last week (-0.45%) was bearish technically and could weigh on prices this week.

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Sentiment towards gold remains as bearish as we have seen it in many years which is bullish from a contrarian perspective. The weak hands and speculative froth has been taken out of the market as seen in the decline in ETF holdings and COT data.

However, physical demand remains robust internationally as seen in the demand figures coming from refineries and government mints.

Mints from the Perth Mint in Australia to the U.S. Mint, to the Austrian Mint and the Royal Mint in the U.K. continue to report a surge in sales after gold’s recent price falls led to a marked increase in physical demand.

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Gold in British Pounds, 5 Year – (Bloomberg)

Britain’s Royal Mint, which saw its gold coin sales triple in April, said the surge in demand has continued into June. British people are diversifying into gold due to concerns about the UK property market and the risk of inflation.

As a result of a zero interest-rate environment, many investors and savers in the UK have shown increased interest in gold coins in recent years in order to preserve wealth.

British sovereign and Britannia gold coins are especially attractive given their capital gains tax free status which makes them far more attractive than ETFs and all other forms of gold ownership in the UK.

Sterling has lost 50.07% of its value versus gold in the last 5 years of the global debt crisis. The euro has lost 46.3% of its value versus gold during the same period.

News From Around The World

Deutsche Bank Opens Singapore Gold Vault That Can Hold 200 Tons - Bloomberg
The Demographics of Doom - GoldSeek
Don’t Dismiss The Possibility Of Gold Confiscation  - Zero Hedge

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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