The Daily Nugget – gold quiet below $1,700
Well today Obama begins his first full day in office in his second-term as President of the United States. As many of you will know from our previous gold investment research, Barack Obama was the best choice for the gold price when it came to the election last year. We found that gold saw the largest increases when a Democrat president was serving his second term.
In research released yesterday, we also found that in the months surrounding an inauguration, January was the best month to invest in gold. You can read more about our findings here.
One of the highlights of today has already happened – the Bank of Japan concluded their latest interest rate setting meeting. As expected the US’s guinea pig has taken its biggest step to fight stagflation, raising its inflation target to 2% and confirmed open-ended asset-buying into next year.
As a result of the BOJ’s moves, gold reacted as expected, inching closer to its one month high of $1,695.56. Once again TOCOM’s gold futures contract reached a new high of 4,913 yen.
Later on today look out for the release of Us Existing Home sales which are expected to have increased somewhat. This evening Mario Draghi will also be speaking.
Despite Japan’s ease with money printing and the forthcoming Lunar New Year, gold has still failed to solidly break through the $1,700 mark. Until this happens, we are cautiously bullish on the yellow metal’s price movements. Whilst buying remains steady we normally expect to see an uptake in gold buying this time of year. Many are looking for a late surge.
Despite concerns, cash gold did not appear to suffer yesterday as India raised its import duty on bullion. Many analysts believe the tax had already been priced in earlier in the month. However some expect buying to slow down later in the year despite strong gold investment figures earlier this month.
Whilst the Indian government complain that 80% of the country’s current account deficit is down to gold imports,
Citi, like me last week, are particularly bullish on platinum and palladium in their latest forecast. Yesterday they revised its forecast on gold for 2013 but raised its platinum outlook by 1.5% to $1,700/oz, compared to gold which is forecast to have an average price of $1,675/oz. The reason for the bullish outlook on platinum is thanks to supply, which Citi expects to outstrip demand by 94,000 ounces.
Despite gaining a premium on gold last week, platinum is back to trading below the yellow metal for the 3rd session running.
We’re looking to silver advancing for the seventh day in a row today; if it succeeds then this would be its longest rally since August 2011. As The Real Asset Company’s CEO just said ‘it’s time for a pullback’ so get ready to grab a bargain later on in the week.
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