Here are the most important headlines with impact on god and other precious metals prices:
Europe: The Spanish 10-year bond yield closed the week 25 basis points lower at 5.62per cent. The Italian 10-year bond yield closed the week at 4.75 per cent.
Germany: The IFO-Institute released the November reading of the Business Climate Index at 101.4, against a reading of 100 in October 2012. The median expectation from economists was a drop to 99.5.
The EU leaders’ long-term budget meeting for the years 2014 – 2020 ended without a deal. The talks are expected to continue in early 2013.
Cyprus is the latest member state of the EU that is very close to agreeing to a bail-out package with its international lenders, the EU and the IMF. The amount in question is Euro 17.5 billion, and final details are still being agreed. Luxembourg’s Yves Mersch has been elected to the board of the European Central Bank (ECB). Yves Mersch is known for his anti-inflationary stance, but he has also supported Mario Draghi for the Bond purchasing program of the ECB.
India: The Indian Rupee finished the week at 55.51 to the US dollar.
Gold: US$1751 – up US$37 from last week
Gold overcame the strong resistance level at US$1739 last Friday, in thinner–than-usual market conditions, due to the US Thanksgiving holiday. Nevertheless, the move was impressive and gold reached a high of US$1755 before settling just above US$1750 level for the week.Gold traded all of last week in a relatively tight range, but all the time with a certain amount of strength and perspective towards the upside. So far, Gold has registered gains of 12 per cent over the course of the year, and this is a very good number, considering other potentially correlated commodities. Oil prices for WTI, for example, are down 11 per cent over the year, and that clearly demonstrates the versatility of gold in the eye of the beholder.
Gold is viewed as insurance policy, asset class, risk on as well as risk off asset, at certain times. I think it is remarkable to see Friday’s gold move in Euro terms, as it elevated the gold price in Euro back towards the Euro 1350 level, not too far away from the highs of Euro 1395.
The premium from Gold over Platinum fell last week to US$135. The release of the latest Commitment of Traders Report (COTR) has been delayed until November 26, 2012, due to the Thanksgiving holiday in the US.
Option volatilities midrates: Gold atm (at the money)
1 month 11.50% down 0.50%
3 month 13.25% down 0.25%
6 month 15.25% down 0.50%
1 year 18.00% down 0.50%
Premium 1kg Gold bars loco Dubai (DGD 995 fine) against loco London: US$0.30
EFP Spot Gold to February Comex: US$2.10
ETF: Holdings are at 2728 tons
Support: 1718 and 1698 Resistance: 1772 and 1796
Silver: US$34.10 – up US$1.78 from last week
Silver prices rallied last Friday to reach US$34.25 during thin trading conditions, and settled at US$34.10 for the week. So far, Silver has gained 23 per cent since the beginning of the year, and this has happened in a so called “orderly fashion.” The amounts of speculative long positions in the futures markets are still very much within the “sustainable” bracket and no overbought situation is visible at this moment in time. This makes the gain of 23 per cent this year even more interesting, as it indicates a much stronger support basis in the high US$20 levels than anticipated earlier in the year. The very large holdings of silver in the various ETF’s are also an indication of the future potential of Silver prices, as these high level of holdings have been accumulated over a longer period of time. This gives a certain degree of stability to the market.
Silver holdings in ETF’s at random dates during 2012:
- 1st April: 15210 tons
- 1st July: 15310 tons
- 2nd September: 15500 tons
- 28 th October: 15875 tons
The release of the latest Commitment of Traders Report (COTR) has been delayed until the November 26, 2012, due to the Thanksgiving holiday in the US.
Option volatilities midrates: Silver atm (at the money)
1 month 20.25% down 2.50%
3 month 22.75% down 2.25%
6 month 25.25% down 1.25%
1 year 27.00% down 1.50%
EFP Spot Silver to December Comex: Minus US$2.00 cents
ETF: Holdings are at 16080 tons
Support: 33.10 and 32.85 Resistance: 34.25 and 35.00
Platinum: US$1616 – up US$57 from last week
The discount to gold has decreased to US$135. Platinum prices breached last week’s highs of around US$1600 on Friday, and managed to close very strongly above that resistance level. The high on Friday was
US$1625 before settling at US$1616.
Last week’s performance was more about potentially changed fundamentals, instead of news headline trading. The Swiss import and export figures showing improved exports, especially into London (Location swaps for Loco London trading??) and also, more importantly, into Hong Kong.It appears that “negative news” has been exhausted and that the market is in the phase of consolidation with a bias towards the upside. The investment community has rekindled its interest into the metal, as most of the weaker longs have bailed out in recent weeks. The longer term outlook for 2013 is also a lot less pessimistic, due to an expected structural supply overhang, as these oversupply estimates have shrunk significantly.
The release of the latest Commitment of Traders Report (COTR) has been delayed until the November 26, 2012, due to the Thanksgiving holiday in the US.
Option volatilities midrates: Platinum atm (at the money)
1 month 17.75% up 0.75%
3 month 20.00% up 1.00%
6 month 21.00% up 0.50%
1 year 22.50% up 0.50%
EFP Spot Platinum loco London to January NYMEX: US$1.25
ETF: Holdings are at 50 tons.
Support: 1570 and 1545 Resistance: 1630 and 1657
Palladium: US$663 – up US$36 from last week
Palladium had another excellent week and is trying to catch up, after lagging behind for most of the year.
The fundamentals for Palladium are looking good and the imports of Palladium from Russia into Switzerland and London are getting smaller and smaller. This is another indication that the stockpile in Russia, which supplied the market for decades, is already depleted or near depletion. There are still decent stocks of Palladium held over ground, but a positive economic development would see them melting away like ice in the sun.
Recent data, especially from the US and also from China indicate that a recovery of the automotive industry is already on its way. The release of the latest Commitment of Traders Report (COTR) has been delayed until the November 26, 2012, due to the Thanksgiving holiday in the US.
Option volatilities midrates: Palladium atm (at the money)
1 month 25.50% up 0.50%
3 month 26.00% unchanged
6 month 26.50% unchanged
1 year 27.00% unchanged
EFP Spot Palladium loco Zurich to December NYMEX: Minus US$0.50
ETF: Holdings are at 61 tons
Support: 633 and 617 Resistance: 678 and 700
