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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Please Note: Information published here is provided to aid your thinking and investment decisions, not lead them. You should independently decide the best place for your money, and any investment decision you make is done so at your own risk. Data included here within may already be out of date.

About the Author

Jan SkoylesJan Skoyles is Head of Research at The Real Asset Company, a platform for secure and efficient gold investment. Jan first became interested in precious metals and sound money when she met Ned Naylor-Leyland whilst working alongside him in the summer of 2010. Jan then went on to write her undergraduate dissertation on the use of precious metals in the monetary system. After graduating from Aston University in 2011 Jan joined The Real Asset Co research desk. Her work and views are now featured on a range of media including BBC, Reuters, Wall Street Journal, Mail on Sunday, Forbes and The Telegraph. She has appeared on news channels including Russia Today to discuss the gold price and gold investing. You can keep up with Jan's commentary by subscribing to our RSS feed Gold Investment News.View all posts by Jan Skoyles