MAX KEISER -vs- GOLD SKEPTIC on the PRICE of GOLD & why you should OWN PHYSICAL GOLD
Gold rose on Wednesday after a slide to two-year lows this week attracted Asian interest in buying the physical metal, but sentiment was still severely shaken by the biggest two-day loss in 30 years.
Investors continued to exit gold-backed exchange-traded funds, concerned that the metal has lost its shine as a safe haven and inflation hedge.
Gold rose 0.7 percent to $1,383.15 an ounce by 0755 EDT (1155 GMT), having tumbled to its lowest since January 2011 at $1,321.35 on Tuesday. The market fell by a combined $225 on Friday and Monday, which compares with a total trading range of $260 in 2012.
It is down about 18 percent so far this year after 12 years of gains.
"We bounced a little bit in the past two sessions, and I suspect there was quite good buying coming out of Asia from places like China and potentially India," Natixis analyst Nic Brown said.
"I think that at this point a new range will be established. We can't go back to the old $1,500-$1,580 range because investor sentiment has fallen, but it still early days to understand at which levels people will feel they can sell again."
Asian physical buying pushed up premiums for gold bars in Singapore to their highest in 18 months at $1.70 an ounce to spot London prices, but demand from top consumer India was surprisingly low despite the wedding season, traders said.
India celebrates major gold-buying festival Akshaya Tritiya next month, and the wedding season will continue until early June. Indian parents typically give gold jewellery to their daughters when they marry. European shares sank by over 1 percent as investors positioned for sluggish growth in the euro area, outweighing monetary policy easing in the United States and Japan.
U.S. GOLD FUTURES FALL
"The market is absorbing the negative impact of the Cyprus gold sale news, it is a disproportionate response to what is a relatively small amount of gold, but is more to do with setting a precedent and if selling gold becomes part of any European bailout you have to look at how much metal other countries' central banks hold," Natixis' Brown said.
Tokyo gold futures regained strength as the yen weakened, the Nikkei rebounded and physical gold buying picked up. The most active contract, currently February 2014, sank to its lowest since August on Tuesday.
Spot platinum fell 1.2 percent to $1,425.75 an ounce, having touched its lowest since last August in the previous session. Palladium was down 1 percent to $670.97.
Silver fell 0.9 percent to $23.15 an ounce after dropping 12.6 percent on Monday.
But that was really a meaningless statement designed to to scare people out of ETFs and free up a lot of physical gold so certain entities who are short of physical gold could get assistance. That's what has happened here.
The situation is bad all the way around in the West, and the fact that the Germans have given the Americans 7 years to return a small portion of their gold reserves back to the Bundesbank is incredible. It is especially revealing when it comes to the desperation that is really going on behind the scenes.
It is going to take the United States 7 years to unwind the leases on just that 300 tons of gold, never mind the other 1,100+ tons of gold the US supposedly has stored for Germany. But it will take that long just to get that little bit of physical gold back to Germany.
I would also like to point out two very important developments taking place in Switzerland. A movement inside Switzerland has already acquired 100,000 signatures for two things to be put on the ballot. The first one would eliminate any future sales by the Swiss National Bank,