Heading In To 2013
The fiscal cliff negotiations came down to a thirteenth hour compromise in which the US tax debate was temporarily resolved but spending issues were swept under the carpet to be resolved another day (a simple game of kick the can). The market reacted euphorically with US equities flying higher. The follow through reaction today seems decidedly more muted though, as markets analyze the reality of the situation… global economic news remains mixed and the US Congress and the President still have many unresolved dilemmas to overcome.
Gold rallied nicely up to $1,700 yesterday but with Japan and China still on holiday, it was unable to attract further bids to break through the key level. While physical demand in those two countries was almost non-existent, we have been hearing about good physical demand coming out of India. There are rumors that the Indian government is looking to increase the import duty yet again on gold. Indian locals, as such, are trying to beat the rush and loading up on inventory now instead of when they will be subjected to a potentially higher tax down the road.
For now, the yellow metal is capped at $1,700 while support is coming in at the 200 day moving average at $1,661 and then below there at a more important level at $1,647.
All Things Considered – John’s Commentary:
The Good News: For those who track yearly performance figures, while not official, records for 2012 are as follows:
Gold rose 7.03%, silver rose 8.91%, platinum rose 9.67% and palladium rose 7.23%.
Action to take: Hold and continue to add in modest amounts on a regular basis. Take advantage of the price dips.
