REPORT GOLD
Mild gains were noted in precious metals for a fourth session this morning and they were primarily driven by currency market gyrations and the uncertainties engendered by the on-going Japanese post-quake woes and by the allied campaign taking place in Libya.
Spot goldprices opened the New York midweek session with a gain of $3.80 per ounce and were quoted at $1,432.60 as of 8:20 local time. The advance in the yellow metal appeared to have run out of speculative steam during the early morning hours at near the $1,435 resistance zone and players were searching for fresh impactful news based upon which they might make a case for further gains.
Gold market
talk offered some conflicting opinion on the topic of Japanese gold market activity, with some traders citing possible bargain-hunting purchases by local investors in the wake of recent, extraordinary yen strength, while others offered the prospect that the Japanese central bank might have to come to market with some gold in order to fund reconstruction efforts in the near future. The Japanese government was considering the setting up of a reconstruction office that harks back to the days following World War II. More on the staggering costs of the quake will follow below.
Meanwhile, stay on alert for those ubiquitous Internet offers of “gold for sale” coming from various African spam “boiler rooms.” They might just be substantive offers, this time around. The BBC reports that Libya possesses
gold reserves that might be worth more than $6 billion. These are not insubstantial gold reserves, as they rank the country in the global “Top 25” of holders, according IMF data. The gold stash could potentially be used to finance Col. Gaddafi's fast-fading government at a time when it has become subjected to international financial sanctions. The BBC speculates that it might be possible to transport the gold to other African countries and sell it. Our bet: not at current market prices, or anywhere near them. Thus, when your e-mail inbox swells with “gold below spot” messages, you might have just landed on Gaddafi-sourced bullion.