Gold Prices Jump 3.2% from Swiss 'No' Vote Drop But Analysts Bearish as Silver Whips 13%
Monday, 12/01/2014 14:34
GOLD PRICES rallied hard Monday morning in London, bouncing from an early drop near 5-year lows after the Swiss gold referendum failed to meet voter approval yesterday.
Trading back above $1180 per ounce by lunchtime, and reversing all of Friday's late drop as well, gold prices stood 3.5% above the "gap down" seen at the start of Asian trade today.
Silver extended the plunge and rally in gold prices, bouncing 13% from fresh 5-year lows at $14.40 per ounce.
Some 76% of Switzerland's citizens voting Sunday said "no" to the gold initiative, which would have forced the Swiss National Bank to gold one-fifth of its assets in gold and never sell metal again.
That Swiss "no", however, came on fewer votes than were cast in the other two proposals on Sunday's ballot – both of which were also strongly rejected.
"One more reason for investors to be bearish on gold," says a report at Bloomberg.
"Gold looks poised," says a technical analysis of prices from French bank Societe Generale, "to re-test November lows near $1135 and even drift lower towards the [downtrend] channel support at $1100/1085."
"Gold is likely to be on the defensive again this week," adds a note from Japan's Mitsubishi, "with a raft of likely positive US economic and employment data."
Consensus forecasts for November's non-farm payrolls data, due Friday, are the largest since at least 2007, with the 232,000 net new jobs expected being achieved only 7 times in the last decade.
The US Dollar slipped on the FX market Monday however, falling against all major currencies except the Chinese Yuan, which was hit by weaker-than-expected manufacturing data.
Commodity prices fell faster meantime, hitting new 5-year lows as copper and crude oil sank once again and world stock markets also dropped.
Weak manufacturing PMI data across the Eurozone saw investors buy government bonds, pushing yields on Italian debt down to new record lows.
Ratings agency Moody's today cut Japan's debt one notch to A1, because according to one analyst "the country's fiscal situation is terrible."
Further ahead, "We do not expect gold to remain for any length of time at its current level," says Germany's Commerzbank, "but envisage higher prices in the medium to long term."
In particular, Commerzbank notes the
sudden end of 80:20 gold import controls in India – the world's No.1 consumer nation until those rules were imposed in mid-2013.
Gold trading volumes in China – the No.1 consumer nation during 2013 – were meantime very strong at the Shanghai Gold Exchange on Monday, rising near mid-November's 18-month peak.
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