PRECIOUS-Gold rises with equities, U.S. 'fiscal cliff' eyed

Thu Nov 29, 2012 3:42pm EST

* U.S. 'fiscal cliff' uncertain outcome boosts gold
    * SPDR Gold Trust at record high for second day
    * Palladium prices hit highest since mid September
    * Coming up: U.S. personal income, Chicago PMI Friday

 (Updates throughout, changes byline, dateline, previously
    By Frank Tang
    NEW YORK, Nov 29 (Reuters) - Gold rose on Thursday,
recovering in part from the previous session's slide, as better
performance in equity markets and underlying uncertainties
surrounding the U.S. fiscal crisis increased bullion's
investment appeal.
    Silver and platinum group metals also climbed on hopes of
better demand related to a U.S. budget deal. Palladium rose 1.5
percent to its highest in over two months as ongoing supply
worries and technical buying extended the auto catalyst metal's
rise to a third consecutive day.
    Bullion tracked the S&P equities index and crude oil
 higher, but trading was choppy after House of
Representatives Speaker John Boehner said there was no progress
in "fiscal cliff" talks. 
    "Gold is getting a boost because of the safety element due
to the fiscal cliff. With gold's sell-off yesterday, it reached
an attractive level for people to move a small amount of capital
into gold," said Phillip Streible, senior commodities broker at
futures brokerage R.J. O'Brien.
    Spot gold was up 0.5 percent at $1,727.51 an ounce by
2:51 p.m. EST (2051 GMT), after it traded as low as $1,705.64 an
ounce on Wednesday.
    U.S. COMEX futures for December delivery settled up
$10.70 at $1,727.20 an ounce, with volume about 30 percent above
its 250-day average.
    The implications of the $600 billion tax hikes and spending
cuts known as the "fiscal cliff" are unclear for gold, analysts
    Protracted talks, which could heighten risk aversion, may
lift gold prices if they trigger safe-haven buying amid economic
uncertainty. In the short term, however, hopes for a quick
resolution are benefiting gold as it keeps pace with stocks.
    On chart, gold is not trading below its key resistance of
50-day moving average at $1,738 an ounce, while recent lows
between $1,703 and $1,705 should offer support, analysts said. 
    Despite Wednesday's pullback, holdings of the SPDR Gold
Trust, the world's biggest gold-backed exchange-traded
fund, hit a record high for a second consecutive day, underlying
buoyant investment interest. 
    Quarterly results from a major U.S. jewellery retailer
suggests demand for silver jewellery could come under pressure
due to a slow global economic recovery.
    Jewellery retailer Tiffany & Co said on Thursday
that in its third quarter it sold fewer silver jewellery items
costing less than $500, its most profitable merchandise in the
Americas market. The company also blamed high costs of precious
metals and diamonds for weaker gross margins. 
    Silver rose 1.6 percent to $34.27 an ounce.
    Among platinum group metals, platinum was up 0.4
percent to $1,609.49, while palladium climbed to its highest
since mid September at $689 an ounce. It was last traded up 1.7
percent at $684.22 an ounce.
    Traders said that strong technical buying lifted palladium,
which is used mostly in making automotive catalytic converters
that clean exhaust fumes in cars. Supply worries due to mine
violence in South Africa and dwindling Russian state stocks also
boosted the metal, analysts said.
 2:50 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1727.20  10.70   0.6  1717.70 1729.00   58,891
 US Silver DEC  34.348  0.664   2.0   33.535  34.395   14,775
 US Plat JAN   1619.50   7.80   0.5  1605.00 1625.80    7,894
 US Pall DEC    685.20  12.05   1.8   666.75  689.80    2,759
 Gold          1727.51   8.20   0.5  1718.55 1728.10         
 Silver         34.270  0.540   1.6   33.560  34.380
 Platinum      1609.49   6.24   0.4  1605.25 1621.75
 Palladium      684.22  11.72   1.7   670.75  689.00
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        229,559   181,149   173,882     12.73   -0.50
 US Silver       72,627    57,012    52,416     21.19    0.16
 US Platinum      8,415     8,677     8,885     17.91   -0.03
 US Palladium     9,384     5,273     4,663                  
 (Additional reporting by Jan Harvey and David Brough)
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Comments (1)
Duffminster wrote:
These headlines correlating the price of gold to this or that political event are completely erroneous. Yesterdays sell of in gold was a blatant manipulation. A massive concentrated wave of sell orders hit the trading pits in the first minute of trading, over 13,000. This was designed to push the price down to a key point and trigger sell stops. It did. If you don’t think there is official manipulation in the market Google GATA. There are plenty of other smoke signals indicating that there are physical shortages in the metals markets and particularly in silver. Independent data such as that from Sandeep Jaitly’s “Bullion Basis Service” has indicated backwardization in silver the London Bullion Market Association stopped publishing its Silver Forwarding Rate (SIFO) data in November of last year.

It is clear to me that the decreasing transparency being provided by the exchanges and prospectus on some of the Gold and Silver ETF’s coupled with a close look at who the custodians of the metals for these ETF’s are and how large and concentrated their short positions of these custodians in the metals futures markets are, begin to show an increasing level of desperation as the ultimate conditions of the physical reality of backwardization begin to beyond the reach of manipulation and obfuscation. As the traders and hedge funds begin to deduce the actual situation on the playing field and the tactics being employed, the game will be up. For now, it remains a defensive game by the official long shorts that seek to hide the decaying basis for fiat currency through gold and silver price suppression but the physics of economic reality can only be manipulated so long in my opinion.

Nov 29, 2012 1:13pm EST  --  Report as abuse
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