By: Ben Traynor, BullionVault
-- Posted Thursday, 22 November 2012 | | Source: GoldSeek.com
London Gold Market Report
THE U.S. DOLLAR gold
price traded close to $1730 an ounce during Thursday morning's London
session, holding onto gains made a day earlier, as European stock
markets edged higher, with US markets closed today for Thanksgiving.
"We
believe that the German Bundesbank's sale of 4.2 tonnes of gold was
intended solely for producing commemorative coins," says today's
commodities note from Commerzbank, referring to International Monetary
Fund figures published Wednesday showing October's buying and selling of
gold by central banks.
"By
its own account, the Bundesbank keeps 7 tonnes of gold ready each year
for the production of coins, gold which it sells to Germany's Federal
Ministry of Finance. In October 2011, the Bundesbank had sold 4.7 tonnes
of gold for this purpose."
Silver
hovered below $33.50 an ounce this morning, like gold holding gains
from Wednesday, as oil prices ticked lower and copped gained.
Industrial
demand for silver is forecast to rebound next year following an
estimated 6% drop in 2012, according to a report by precious metals
consultancy Thomson Reuters GFMS published by the Silver Institute.
"This
will owe much to a new peak in China," the report says, "while a jump
in the Indian market will see the country post its second highest total
on record."
Industrial
demand accounted for more than half of total silver demand last year,
with that share projected to grow to around 60% in 2014, according to
GFMS.
China's
manufacturing sector has shown improved activity this month, according
to the provisional release of HSBC's purchasing managers index published
Thursday. HSBC's flash PMI rose 50.4, up from 49.5 a month earlier,
with a figure above 50 indicating an expanding sector.
In
Europe meantime, flash PMI data published by Markit show improved
manufacturing conditions in both Germany and the Eurozone as a whole
this month, although the sector PMIs remains below 50.
Increasing
the European Union's budget would be "quite wrong" said British prime
minister David Cameron this morning as he arrived in Brussels ahead of a
summit that will see discussions of the EU's budget over the rest of
this decade.
Cameron's
coalition government lost a parliamentary vote at the end of last month
when members of his Conservative party joined opposition Labour in
backing calls for an outright cut in the EU's budget rather than just a
freeze.
"[Cameron's] people expect the impossible," says Tim Bale, professor of politics at Queen Mary University of London.
"That's
the problem, they want him to fail. They don't want him to bring back
the deal that can possibly be done, because that will prove [Britain]
can't deal with the EU and the only solution is to get out of it."
The
Euro extended yesterday's gains this morning following reports that
Euro members could contribute an additional €10 billion to temporary
bailout fund the European Financial Stability Facility in order to fund
Greece while it waits for international lenders to agree payment of its
latest tranche of bailout funding.
Argentina
meantime must $1.3 billion to hedge funds that did not agree to the
country's sovereign debt restructuring in 2001, a US court ruled
Wednesday.
Judge
Thomas Griesa has issued an injunction against Argentina, adding that
this extends to "other persons who are in active concert or
participation with the parties or their agents."
This
includes Bank of New York Mellon, which is trustee for Argentina's
restructured debt, and extends to the US payments system, the Financial
Times reports.
A
ship from Argentina's navy was seized in Ghana last month following an
application by a subsidiary of US hedge fund Elliot Capital Management,
one of the holdouts from the 2001 default.
India's government is examining the creation of financial investments linked to gold, such as gold-backed bonds, the Hindustan Times reports.
"Recent
[central bank] data showed a declining trend of savings by Indian
households including bank deposits," an official from India's finance
ministry said, "[so] in order to attract household savings, paper
products that are linked to gold [should] be developed."
Ben Traynor
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