Prices again crept gradually higher in Asian trading prior to some retrenchment in early European trading but dollar weakness was supporting gold and silver. Both bottomed near year end last year on December 29th prior to strong gains in January.
Following last week’s losses of 0.50% and 2.5% respectively, gold and silver started the final full trading week of the year on a muted note. Thinning participation and year-end book-squaring have begun playing a more significant role.
The silver does not exist to cover these short positions, and it will take very little further buying to set off a crisis in this important market. On this evidence, and assuming the trend continues, there will shortly be a declaration of force majeure.
Gold is marginally higher today, after finishing its second monthly decline in a row, despite safe haven demand due to US “fiscal cliff” and currency debasement concerns. Interest in the yellow metal as diversification remains robust.
Gold rose on Monday as the dollar fell and oil prices rose as the Israeli Palestinian conflict escalates and the US fiscal cliff discussions support the yellow metal.
Gold ETF funds climbed to a record high of 75.421 million ounces on Nov. 16.
The US Commodity Futures Trading Commission should shortly conclude its four-year-old investigation of the silver market but has gone beyond the schedule that was the wish of Bart Chilton, the commissioner who originally called for the probe.
Gold was off its seven-month high on Monday but the recent wave of central banks who started printing money and bond buying again is very supportive for the yellow metal and euro gold remains close to record highs.
Gold has risen to new record highs in euro terms overnight in Asia. Significant consolidation has been seen in the last year between €1,200/oz. and the previous record high at €1,359.01/oz. This record high was seen almost exactly a year ago on Sept. 9, 2011.
Gold hit a high not seen since mid-April on Monday, continuing the momentum from last week’s gains as investors expect further monetary stimulus from central banks and become increasingly concerned about inflation.
Libor, Bernie Madoff, MF Global, Peregrine Financial, zero-percent interest rates, the Social Security and Medicare entitlement funds, quote stuffing and high frequency trading (HFT), and debt-based money. What do all of these things have in common?