Gold ‘Storm’ - Price Could Rise Sharply Next Week On Fed Say UBS and NomuraCommodities / Gold and Silver 2012 Dec 07, 2012 - 08:08 AM GMT
Today’s AM fix was USD 1,697.00, EUR 1,312.55, and GBP 1,058.71 per ounce. Yesterday’s AM fix was USD 1,693.00, EUR 1,295.14, and GBP 1,050.77 per ounce.
Silver is trading at $32.89/oz, €25.54/oz and £20.62/oz. Platinum is trading at $1,599.50/oz, palladium at $684.00/oz and rhodium at $1,045/oz.
Gold rose $4.40 or 0.26% in New York yesterday and closed at $1,698.00/oz. Silver surged to a high of $33.259 and finished with a gain of 0.4%.
Gold $/oz, 5 Days – (Bloomberg)
Gold crept higher in Asia overnight prior to selling, then saw initial gains lost. Gold and silver are headed for their second week of declines.
For the week gold is down 1% and silver is down 1.4% in dollar and sterling terms but the losses in euros and Swiss francs are more muted (euro gold and silver is down 0.5% and 0.9% respectively) due to weakness in the euro and Swiss franc.
XAU/GBP, 5 Days – (Bloomberg)
As expected the ECB kept rates on hold at 0.75% yesterday. The ECB confirmed what more realistic commentators have been warning - that the eurozone economy would contract further in 2013. This is leading to hopes for rate cuts by debtors and concerns of currency debasement by creditors.
The US non-farm payrolls data is released at 1330 GMT and this will be critical ahead of the US Fed’s gathering next week. Yesterday’s US unemployment rate at 7.9% shows that jobless claims have fallen back to a pre-Hurricane Sandy range.
UBS and Nomura have suggested that gold could rise next week as the Federal Reserve may announce further easing at the FOMC meeting – on Tuesday (11/12/12) and Wednesday (12/12/12).
Nomura said it is worth considering whether the FOMC will announce further easing to replace so called ‘Operation Twist’. The research house noted that gold remains at the same level as during the October meeting, which suggests gold has not yet priced in any move by the FOMC – creating an opportunity for gold bullion buyers.
Regardless of whether the FOMC actually eases at this point – Nomura thinks there is a non-negligible probability – gold is likely to rise. Therefore, Nomura expects gold to rise and prices in this probability as the December meeting approaches, just as gold rose when the September meeting was approaching.
XAU/EUR, 5 Days – (Bloomberg)
In a daily note entitled ‘Gold: Calm Before A Storm?’, UBS said today that expectation of additional quantitative easing next week by the Federal Reserve is not priced into the gold market, so any aggressive move by the Fed would prompt a “sizeable response.”
Index rebalancing will also cause gold to be bought, UBS said in its daily precious metals report today.
The rebalancing action this year should be interesting according to UBS as gold is to “be bought this time around as opposed to being sold in previous years”.
The expected conclusion of the ongoing US fiscal cliff negotiations should also elicit a “considerable” reaction from the gold market.
“The UBS house view, which is in line with consensus, is that a deal will likely be reached in Washington by year-end. Much of gold’s response will depend on the details, and the price move could be quite powerful.”
For the latest news and commentary on financial markets and gold please follow us on Twitter.
GOLDNOMICS - CASH OR GOLD BULLION?
This update can be found on the GoldCore blog here.
IRL +353 (0)1 632 5010
WINNERS MoneyMate and Investor Magazine Financial Analysts 2006
Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.
GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'
© 2005-2013 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.