'Gold from the ATM' In Turkey as Deposits Surge

Today’s AM fix was USD 1,747.25, EUR 1,347.56, and GBP 1,090.87 per ounce. Friday’s AM fix was USD 1,734.75, EUR 1,345.39, and GBP 1,088.37 per ounce.

Silver is trading at $34.12/oz., €26.43/oz. and £21.40/oz. Platinum is trading at $1,616.00/oz., palladium at $660.50/oz. and rhodium at $1,060/oz.

Gold rose $21.80 or 1.26% in New York on Friday and closed at $1,751.20. Silver hit a high of $34.16 and finished with a gain of 2.19%. Gold was up 2.28% for the week and silver soared 5.61% for the week.

Gold edged down on a Monday as speculators took their profits as prices rallied on thin volumes on Friday to their highest in a month on technical buying. A strong fall in the greenback triggered rapid gains in commodities and options-related buying on Friday.

XAU/USD 1 Year – (Bloomberg)

Tonight US Congress will meet to attempt to devise a plan to avert the US fiscal cliff which will throw the US into a spiral of tax hikes and budgetary cuts that will lead the US economy deeper into a recession this January.

Another short term ‘resolution’ will almost certainly be achieved which will allow the US to keep spending like a broke drunken sailor and which will again store up far greater fiscal and monetary problems. The scale of these deep rooted structural challenges is so great that they are likely to affect the US sooner rather than later.

The euro racked up a seven month high against the yen and is holding near a one month high against the US dollar as the meetings amongst Greek creditors continue and hope to reach an outcome today.

Greece’s goal is reducing the 190% debt to GDP ratio to a more manageable 120% in eight to ten years. The dilemma is that the IMF and euro-zone finance ministers want to cease payments until a new deal is agreed because they have no guarantee that the financing won’t continue indefinitely.

Can Greek debt become manageable without creditors writing off some of the loans? France and Italy would vote to reduce interest repayments on already granted loans while other countries like Germany would not.

A consensus was reached when German central bank governor Jens Weidmann suggested that Greece could "earn" a reduction in debt it owes to euro zone governments in a few years if it diligently implements all the agreed reforms. The European Commission also supports this view.

Global investment demand for gold remains robust with the amount in exchange-traded products backed by the metal rising 0.1% to 2,606.3 metric tons.

Meanwhile reports of the death of the Indian gold buyer have again been greatly exaggerated as India's net gold import for domestic consumption is likely to be about 800 tonnes this year following a pick-up in demand during the festive season, according to the World Gold Council (WGC).

Last year, the net import for domestic consumption was 969 tonnes. This is a significant fall but not surprising considering the sharply rising price. It shows that the Indian cultural attachment to gold will continue and India may be becoming acclimatized to higher gold prices.

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