The gold price has fallen nearly three percent in the last two days, however it has recovered some ground this morning. Concerns over tapering continue to impact market sentiment. US retail sales data for November showed a climb of 0.7%, the most since June, which gave a boost to both the dollar and the tapering debate.
The drop in the gold price helped to drag silver down too, which fell by 4.4%. The drop was its biggest since the end of October.
What are the chances of a dectaper happening? Well, they seem to be growing by the day if you believe the results of a survey carried out by Nomura. 37% of respondents believe tapering will go ahead following the FOMC meeting next week, a significantly higher percentage than had been seen in earlier surveys carried out by both Reuters and Bloomberg.
Yesterday the SPDR Gold Trust, the biggest gold ETF fell the most in two months. Since the beginning of the year the trust has fallen by 39%. According to Reuters the fund has not seen inflows in over a month. ETF outflows have affected much of the sentiment surrounding gold. For the mainstream, the ongoing outflows coupled with minimum inflows means there is little chance of a substantial upside in prices happening any time soon.
Gold fix investigations
In the last few months there have been some interesting developments in the area of gold price manipulation. Most recently rumours of investigations into the London Gold Fix have been circulating. Today, the FT reports that German banking regulator Bafin has ‘demanded’ documents from Deutsche Bank in light of the investigation into the price fix. Further to this, regulators have been visiting the bank to ‘interrogate’ staff over the twice-daily gold fix process.
Occasionally we have mentioned the ongoing disputes between mining companies and workers’ unions in South Africa. South Africa’s National Union of Mineworkers said yesterday that it had agreed a two-year wage deal for pay increases with Anglo American Platinum, the world’s top producer of the precious metal.
The second largest producer of platinum, Impala Platinum, has not had as much luck and said yesterday that it had reached a ‘deadlock’ with the unions and that negotiations will begin again in 2014.