QE Fears Grow & ETFs Up 56% – World Gold Council

Today’s AM fix was USD 1,723.50, EUR 1,351.45, and GBP 1,087.66 per ounce. Yesterday’s AM fix was USD 1,724.50, EUR 1,353.08, and GBP 1,085.21 per ounce.

Silver is trading at $32.53/oz., €25.60/oz. and £20.52/oz. Platinum is trading at $1,573.50/oz., palladium at $627.75/oz. and rhodium at $1,100/oz.

Gold was relatively unchanged up $0.50 or 0.03% in New York yesterday and closed at $1,725.00. Silver fell to a low of $32.36 and recovered to $32.908, but slipped downward and finished with a gain of 0.65%.

XAU/USD Currency 1 Year – (Bloomberg)

Gold edged down on Thursday, but the looming US fiscal cliff, Eurozone debt problems and rising Middle East tensions continue to enhance the yellow metal’s safe haven appeal.

Yesterday, Israel launched its most ferocious assault on Gaza in four years after persistent Palestinian rocket fire, hitting at least 20 targets in aerial attacks and killing the top military commander of Hamas. The UN Security Council held a private(closed door) emergency meeting on Wednesday evening to discuss Israeli strikes against the Gaza Strip, since Israel threatened a wider offensive. Brent oil prices were holding above $109 per barrel.

Minutes released from the US Fed’s Oct. 24 meeting showed that “a number of participants indicated that additional asset purchases would likely be appropriate next year after the conclusion of the maturity-extension program.”

Today, the US weekly jobless claims report is published at 1330 GMT.

The London Bullion Metal Association said that it expects gold bullion to reach $1,843/oz. by September 2013, and forecast silver to reach $38.40.

The World Gold Council issued a report “Global gold demand reflects challenging global economic climate: ETFs up 56% and India up 9% in Q3 2012” which showed that global gold demand fell 11% in the three months to September from record levels seen during the same period last year, which was curbed by a sluggish Chinese economy and stronger Indian demand limited the drop.

In Q3 2012, gold investment demand (total bar and coin demand plus ETFs and similar products) was 429.9 tonnes down 16% from Q3 2011. Although the year-on-year snapshot for investment demand suggests falling interest, this is not the case. Rather, it highlights the strong demand seen in Q3 2011.

Interestingly, demand for ETFs rose 56% to 136t, compared to Q3 2011. Demand for gold-backed ETFs in Q3 grew significantly in the quarter partially due to institutions responding to the additional QE measures in the US and Europe.

XAU/EUR Currency 1 Year – (Bloomberg)

At 87 tonnes, Q3 2012 investment demand for gold surged from 78 tonnes in Q2, a rise of 12%. Examining this over the longer term, Q3 represents the first quarter-on-quarter increase in Indian investment demand since Q2 2011.

This ramp up in Indian demand has been driven, in part, by investors moving into the medals and imitation coin market, which was up 59% and the build-up to the wedding and festival season. The stabilization of the market, an increase in the retail outlet network and a gradual recovery of the rupee has helped cement this demand to result in India being the strongest performing market overall in the quarter.

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