Market Update GoldCore 12 June 2013

Market Update GoldCore

Royal Mint: Demand Surge Continuing In June After Demand Trebled In April

Today’s AM fix was USD 1,369.50, EUR 1,031.09 and GBP 880.93 per ounce.
Yesterday's AM fix was USD 1,376.75, EUR 1,041.89 and GBP 887.37 per ounce. 

Gold rose $6.70 or 0.49% yesterday to $1,385.40/oz and silver surged to a high of $22.083 and finished with a gain of 1.58%.

Gold has fallen another 1% today despite weakness in Asian and European stock markets prior to an important decision by the German constitutional court about the legality of the ECB’s debt monetisation.
Technically, gold looks vulnerable of a fall back to test support at $1,343/oz and a breach of these levels could see gold test support at the $1,300/oz level.

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Global financial markets have been under pressure since Fed Chairman Ben Bernanke said last month that the Fed could decide to scale back buying at the next few meetings if the U.S. economy showed continued signs of strengthening.

However, much of the data and the fundamentals suggest that the U.S. is on the verge of a sharp recession. Therefore the Federal Reserve is unlikely to revert to conventional monetary policies anytime soon.

Rising interest rates will be negative for most markets but not for gold which is correlated with interest rates as was seen in the 1970’s. During that decade, gold prices rose as interest rates rose and peaked as interest rates peaked.

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Gold in USD, 90 Days – (Bloomberg)

Gold is vulnerable to rising interest rates towards the end of the interest rate tightening cycle when positive real interest rates are evident.

The surge in physical demand in Asia, seen in April after the unusual price plunge, has cooled off.

The drop set off a mad rush for bullion in India, China and Asia that pushed premiums higher amid a supply crunch. Dealers in Singapore confirmed to Reuters that demand for gold bars had eased and gold bars and coins were easier to obtain.

News From Around The World

National Geographic: FEDERAL RESERVE ... "Cash, Gold & Digital Bits ...   You Tube
Silver Investment Demand: The Ticking Time Bomb   Silver Seek
Former White House Official - Expect More Government Theft   King World News

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