Daily Bullion Market Update 11/17/11
By Barry Stuppler – MintStateGold.com
Gold sold off today with the entire precious metal group as the PIIGS countries debt problems worsened. German Chancellor Angela Merkel rejected French calls to deploy the European Central Bank as a crisis backstop, defying global leaders and investors calling for more urgent action to halt the Eurozone debt turmoil. At 11am PDT, Gold was down $52.20, trading at $1,724.40 per ounce in heavy trading.
The World Gold Council (WGC) reported today Global Gold demand rose 6 percent in the third quarter from a year earlier. Europe’s debt crisis spurred investors to accumulate the metal as a protection of wealth and push demand to a record high. Global demand rose to 1,053.9 metric tons, worth a record $57.7 billion, the London-based industry group said today in a report. Investor purchases of exchange-traded funds and products, bars and coins outpaced a drop in jewelry demand and increase in recycled supplies. WGC also stated that during 2011 the World’s Central banks’ gold buying set a 40-year high. The WGC declined to identify the central banks behind the majority of the buying citing “confidentiality restrictions”, saying only that “a slew of new entrants emerged wishing to bolster gold holdings”.
Gold imports to India, the world’s biggest consumer of bullion, are likely to increase the last quarter of 2011 as demand emerges from traders, The World Gold Council’s (WGC) India head said. The country’s imports in the Oct-Dec quarter will be higher than last year’s 281 tonnes, Ajay Mitra, managing director with the WGC for India and the Middle East, told reporters on Thursday.
According to the World Gold Council’s Gold Demand Trends report for Q3 2011 released today, this increase was driven by investment demand which rose by 33% year-on-year to 468.1 tonnes, generating record quarterly demand of US$25.6bn. Read the complete WGC report at: www.gold.org/media/press_releases/archive/2011/11/gold_demand_trends_q3_2011_pr/
Silver is down $2.52 at 11am PDT, trading at $31.54 per ounce on heavy volume. Silver, Platinum, and Palladium are all trading lower today on continued concern over the European debt crisis causing a serious recession in Europe. Silver prices will average $35.66 an ounce in 2011 and will extend the rally to $45 in 2012, according to a Silver Interim Report Media Advisory, released by GFMS Thomson Reuters.
More Quantitative Easing on the way
The Bank of England signaled late Wednesday it was likely to pump billions more into the economy, after slashing its forecasts for inflation and saying output was likely to stagnate until next summer. The Bank is forecasting no growth until next summer and has downgraded its 2012 central forecast from 2.2 per cent in August to 0.9 per cent. It expected inflation to fall rapidly from 5 per cent to well below its 2 per cent target by the end of 2012. Despite the Bank urging caution in the face of huge uncertainty, economists and investors jumped on the low inflation forecasts as a signal the Bank was planning to increase its money printing operations above the target for £275bn of quantitative easing it is on course to achieve by February.