Gold & Silver Daily Market Recap: December 5th, 2012

Spot gold has traded back below $1700 as strong U.S data and the standoff between Democrats and Republicans over the fiscal cliff has traders shedding positions ahead of year end.

Yesterday saw gold tight rope walk the $1700 level only to finally break through and turn sharply lower to $1692. The weakness continued Wednesday's session as gold touched a 7 week low of $1685 despite the green back weakness. The fiscal cliff deadlock negotiations have worn down the yellow metal in the past few sessions. The persistent rumour of a large scale sell order on the NY comex has left traders slightly nervous.  Disappointing data was also a driver of the metals. Among the releases were Australia’s third quarter GDP, the eurozone retail sales figure for October and the latest US ADP payroll number.

With the turmoil surrounding the metal Goldman Sachs released its outlook for the shiny metal today.  They expect a 3 month gold price of $1825.

"We expect gold prices to peak in 2013 as US growth recovery takes hold. Near term, the combination of more easing and weaker growth should prove supportive to gold prices and our 3-mo forecast is $1,825/toz"

Central bank buying continues to be supportive of the gold price as it was reported that the South Korean Central Bank bought 14 tons of gold in November to add to their reserves. Central banks have been expanding their gold reserves at a record pace at a time when investors increased holdings in exchange-traded products to a record to protect against weaker currencies and the potential for faster inflation.

Spot silver has recorded a similar fate to its bigger brother gold. The dual role metal has slipped and traded sharply under $33.00 to its own 7 week low of $32.52. The metal has found dip buying on the lower levels. The gold silver ratio found support at 50.25 and now seems to be retracing the earlier gains currently at 51.45.

Despite the recent drop in metals prices the outlook remains rosy for metals across the board. Still intact in gold's 200 day moving average which now sits around $1660. Ultimately it is long term investor interest that will keep and push metal prices higher. India remains big buyer as the price drops, this according to Bloomberg's published report.  We remain stead fast on higher gold and silver prices in the coming months due to the fact of numerous issues surrounding the Fiscal Cliff and the Eurozone remains downbeat.
 

 December 5th Closing Prices