Gold
leads four other types of investments in Americans' perceptions of which is
"the best long-term investment," although the 28% choosing it today
is down slightly from 34% in August. Traditional savings accounts or CDs have
gained in support over this time, rising to tie stocks/mutual funds and real
estate as the next-most-valued investments. Bonds rank a distant fifth.
Gold’s
London AM fix this morning was USD 1,652.50, EUR 1,257.71, and GBP 1,020.44 per
ounce.
Yesterday's
AM fix was USD 1,661.25, EUR 1,253.02 and GBP 1,024.70 per ounce.
Gold
fell $4.40 or 0.26% in New York yesterday and closed at $1,661.70/oz. Goldrose to over $1,670/oz in early US trading prior to
selling capped price gains and the price then fell back to the $1,660/oz level.
Gold
gradually fell during trading in Asia and this weakness has continued in
European trading where gold looks set to test the $1,650/oz level or $1,646/oz, the price low after the $1.24
billion sell trade on Monday.
Cross Currency Table – Bloomberg
Gold’s
weakness yesterday may have been due to the positive manufacturing data in
China and the US leading to traders being hesitant to commit to the long side.
The
slowdown in demand from India and data showing holdings in ETFs dropped to the
lowest level in 3 months and US Mint monthly gold coin sales fell in April
falling to the lowest level since June 2008 may have may have also tempered
enthusiasm.
However,
central bank demand is likely to be continuing at these levels and central
banks are almost certainly still buying on the dips. Bullion coin and bar
demand and ETF demand is likely to pick up in the coming weeks when the global
debt crisis deteriorates again.
Data
from Europe this morning was very negative with Italian industrial production
(PMI) falling off a cliff, German manufacturing shrinking, Irish exports faltering
on slower global growth, the Greek economy still floundering and Spanish
unemployment figures appalling.
The
Chairman of the White House Council of Economic Advisers, Alan Krueger, said
yesterday that the European crisis poses “some risk” to the US and global
economy. Four US central bankers said that more stimuli probably won’t be
needed. The Fed bought $2.3 trillion of bonds in two rounds of so-called
quantitative easing from December 2008 to June 2011 thereby debasing the
dollar.
HSBC
Securities on April 29 downgraded its forecast for average gold prices this
year to $1,760/oz from $1,850/oz, with analyst James Steel citing
“a steep reduction in market expectations of further quantitative easing or
other monetary stimulus.”
America's
“Safest Long Term Investment” Is Gold - Gallup
Americans
feel “gold is the safest long term investment” today, a Gallup survey has
found.
Gold
was favoured over four other types of
investments perceived as the best long term choice for American investors
today.
28%
of the American public choose gold as their favoured investment of choice today.
Gold in USD – 3 Days (3 Minute) – Bloomberg
Real
estate followed in second place, with 20% seeing it as the best long term
investment.
Paper
assets were less popular with savings accounts and certificates of deposits
(CDs) tied with stocks and mutual funds at 19%.
Bonds
came last at 8%.
This
suggests that the American public may not be as uninformed when it comes to
investing as is often suggested.
According
to Gallup, "investing in gold has gained in popularity in recent years as
low interest rates have made traditional savings instruments less attractive,
and instability in the stock and real estate markets has undermined the mass
appeal of those options."
"Meanwhile,
the rising trajectory of the price of gold over the past several years
apparently offers more of the returns and stability investors seek."
While
some may find the Gallup poll findings worrisome from a contrarian perspective,
it is not.
Gold
ownership remains very low amongst the public in most of the western world.
The
poll’s findings suggest that this may change in the coming months and years.
While
surveys often show that people are favourably disposed towards and
instinctually trust gold, there remains a massive lack of knowledge about how
to “invest in” or buy gold for financial insurance reasons. This lack of
knowledge and awareness leads to the low levels of gold ownership in the
western world today.
Gold in USD (White), EUR (Orange) and GBP (Yellow) YTD
– Bloomberg
The
non-specialist financial media continues to rarely, if ever, cover gold. When
it does cover gold it is often in a negative light – with frequent suggestions
that it is a “bad investment” and a “bubble”. Also, gurus or experts are often
allowed to voice their negative opinions on gold without seeking plurality of
opinion and getting the other side of the argument.
There
are rarely comprehensive articles looking at the best, most cost-effective and
safest ways to own gold as there are with other asset classes such as bank
deposits, bonds and equities.
This
will change in the coming years when there is less of a bias against gold and arealisation of the importance of gold as a
diversification, and gold is treated and covered in the same way that equities,
bonds and cash are covered today.
OTHER
NEWS
(Reuters
Global Gold Forum)
It
looks like some appetite for gold coins has returned in the United States, with
10,000 ounces of American Eagle gold coins sold on May 1, according to the U.S.
Mint. That's already half the total amount recorded for the whole of April
(though that was the weakest month in nearly four years).
(Bloomberg)
-- India’s April Gold Imports Plunge to 30-35 Tons, Group Says
Gold
imports by India, the world’s biggest bullion buyer, plunged to 30 metric tons
to 35 tons in April from 90 tons a year earlier after higher import taxes
weakened demand, an industry group said.
Demand
remains dull in India as prices trade near record levels due to a decline in
the local currency, Prithviraj Kothari, president of the Bombay
Bullion Association, said in a phone interview today. Imports in 2012 are
expected to be 700 tons to 750 tons, he said.
(Bloomberg)
-- Comex Suspended Gold Trading in N.Y.
Yesterday After Price Drop
CME
Group Inc.’s Comex halted trading in gold futures
for about 10 seconds yesterday at 8:31 a.m. after prices declined, said Damon Leavell, a spokesman in New York. The
so-called Stop Logic halt, engineered by the exchange, is designed prevent
excessive price movements, according to the Comex website. Gold futures for June
delivery, which settled 60 cents lower at $1,664.20 an ounce yesterday, dropped
about $14.50 shortly before 8:30 a.m. local time, data compiled by Bloomberg
show.
The
market was given a short period of time to regain its equilibrium, Leavell said in a telephone interview.
CME declined to comment on the size of the trade that led to the halt.
“The
stop-logic functionality happens across all markets at different times and can
even happen several times in a day,” he said.
Comex halted trading after Comex recorded a transaction of 7,500
gold futures during one minute of trading, Dow Jones reported earlier.
(Bloomberg)
-- BNP Paribas Lowers 2012 Gold Forecast to $1,715 an Ounce
BNP
Paribas SA lowered its 2012 gold forecast by $140 an ounce to $1,715, according
to an e-mailed report from the bank today. It cut its silver estimate for this
year by $4.40 an ounce to $33.10.
