Good Monday morning! We’re one day away from getting the election behind us, and perhaps we’ll finally see the long-term market outlook be a little less muddy. Of course, the January “fiscal cliff” still looms, unless a miracle happens and Congress actually works together for once to avoid it.
Over the weekend, spot gold seems to have found a new floor between $1,675 and $1,680/oz. We’ll see how that plays out over the day now that U.S. markets are having their say. Although the stronger dollar is depressing precious metals a bit, the euro is not feeling so well. It’s still uncertain if Spain and Greece are going to be the millstone around the EU’s economic neck. This week’s big EU meeting will provide more information.
China’s ruling party has a big meeting this week as well, as new leadership takes the helm. We don’t see this as changing China’s policy of grabbing as much gold reserves as possible, while buying as many mining interests as possible in Australia and Africa. As the Chinese famously take the long view on almost everything, their actions make you wonder what they see ahead.
Turkey’s lira is rebounding on an upgrade by Fitch bringing the nation’s debt up to investment grade, as the nation seems to have gotten their economic woes under control. This is partially from the massive exports of gold to Iran, supplied by getting citizens to turn in privately held gold for cash (see our October 30 article:” Turkish Banks Coax Gold From Under Nation’s Mattresses“)
At 10am EST, spot gold is trading at $1.684.61 an ounce, six dollars above the opening price.
– by David Peterson