CENTRAL BANKS CONTINUE TO BUY GOLD; SPAIN BRINGS DOWN EURO
Gold’s unpredictable market price this year has not stopped many of the world’s largest central banks from buying in massive numbers. The Bank of Korea was the latest to add to their Gold holdings by adding 14 metric tons in November. Central banks make these moves to protect themselves weaker assets and inflation risk. “Central-bank buying is a solid pillar for gold,” Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd., said by phone from Singapore. “It’s not a story that will go away soon.”
The euro had a big upswing yesterday due to positive news out of Greece, but some of those gains have been taken back due to negative news out of Spain. The euro had reached a seven week high yesterday, however, due to current economic issues in the area, it was not expected to last. Camilla Sutton, chief currency strategist at Scotia Capital in Toronto said, “There is still too much uncertainty to drive euro back to its year-to-date highs (near) $1.35; accordingly we would expect the current rally to top out.” The European Central Bank has a meeting this week to discuss future plans, which could include the possibility of further monetary easing.
The economic news coming out of the United States has been a mixed bag of good and bad, and today was no different. While the employment numbers missed expectations today, the service sector expanded and factory orders beat expectations. One main factor in the report is the new orders index, which hit its highest level in nine months. While the overall effect may not be great, it is a positive sign that the economic outlook could be improving.
At 1 pm (EDT), the APMEX Precious Metals spot prices were:
- Gold, $1694.30, Down $1.50.
- Silver, $32.83, Up $0.04.
- Platinum, $1585.00, Up $1.10.
- Palladium, $685.70, Up $3.00.
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