Analysts talk gold at NYSE

Fritz Folts – Windward Investment Management

“We have always looked at gold more in terms of an alternative currency than as a commodity and have thus looked at it as a strategic asset, and have been over-weighted in it (at the 9% strategic allocation level) since about 2003.”

Jason Tousssaint – World Gold Council

“Is the marginal buyer of the GLD ETF setting” the global gold price? Probably not. Is this a gold bubble? Not when we look at past bubbles (housing, etc.). As a matter of policy, we as an organization don’t predict the gold price. But we do look at the fundamentals supporting both today’s gold price and where it may go in the future. So we can absolutely talk about trajectory.

Shayne McGuire – Teacher Retirement System of Texas

“Central bank selling pushed gold out of the financial picture and brought it down to the 0.6% level of total global wealth, where it is today. [Recently] gold stopped behaving like a commodity, yet many financial managers at pension funds still have very little exposure to it.”

Jeff Kahn –

“The gold-to-silver ratio has lost much of its value as an analytic tool since the financial meltdown of 2008. The problem with all these ratios is that they can be useful at times, and the correlations hold for certain periods. But all correlations are based on regression to the mean theories, and regression to the mean theories have proven to be essentially worthless in the last three years.”

· Friday AM opening summary. Gold fluctuated in a fairly broad range of from $1,377 to $1,391 after having touched $1,395 on the hours following the New York close on Thursday. A 0.47 rebound in the US dollar (back up to 76.30 on the index) was largely responsible for the pullback in values, as were mini-waves of profit-taking oriented selling overnight. Irish debt-related apprehension and a 4% drop in German industrial output helped push the euro lower and the greenback higher in early trading.

· Gold bullion spot dealings opened with a $12.70 per ounce loss and a bid quoted at $1,380.20 as against the aforementioned rising US dollar. Silver started Friday’s session with a 27-cent decline, quoted at $26.10 per ounce. In the noble metals complex, platinum prices shed $30 on the open, with an opening bid at $1,751.00 while palladium pulled back by $8 per ounce and was last bid at $673.00 per troy ounce. Friday morning’s main focus among traders quickly turned to the US nonfarm payroll figures.

· October’s payroll gains were much larger than anticipated. While expectations were for some 70,000 positions to have been added to the US labor force, the nonfarm payroll number came in way ahead of that figure, at the rather robust 151,000 jobs-added level. The US unemployment rate remained steady at 9.6% even as some economists had expected a 0.10% gain in the figure. The US dollar spiked to near 76.50 on the index in the immediate aftermath of the statistical release by the US Labor Department and gold prices sank by more than $18 to touch levels under $1,375.00 per ounce, at last check. Book-squaring and volatility will dominate the action later today. Also at last check, platinum was down by $43 erasing most of Thursday’s gain. Not for the faint of heart, these markets, at this juncture.

We will return on Monday with our regularly scheduled ‘programming.’

Have a pleasant weekend.

Jon Nadler is a Senior Analyst at Kitco Metals Inc. North America

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About the Author
Jon Nadler Jon Nadler is a Senior Analyst at Kitco Metals Inc. North America
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