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MARKETS Gold Finishes 2012 Higher than it Started By Steve Fiscor, Editor-in-Chief As this edition of E&MJ; was going to press, gold prices had fallen for the sixth consecutive week. Analysts were speculating that investors were worried that the U.S. Federal Reserve may tighten its monetary policies. After the Fed released the minutes from its last meeting (January 3, 2013), gold contracts for February delivery declined to $1,648.90/oz. Several officials discussed discontinuing a bond-buying program sooner than the end of 2013. During intraday trading gold fell as low as $1,626/oz. Be that as it may, gold finished higher than it did one year ago. Quantitative easing has helped boost gold prices since the 2008-2009 global financial crisis. Investors sought gold as a safe haven to shelter wealth from currency weakness. Gold exchange traded funds (ETFs) have made it easier for investors to buy bullion. With the global economy regaining steam, bearish sentiments have entered the gold market, which has been on a 12-year bull run. The World Gold Council recently reported global gold demand figures for the third quarter of 2012. Demand for the quarter was 1,084.6 metric tons (mt), down 11% from the record third quarter 2011 figure of 1,223.5 mt. The value measure of gold demand was 14% lower year-on-year at $57.6 billion. The average gold price of $1,652/oz was down 3% on the record average third quarter 2011 price. Investment demand (the sum of ETFs and total bar and coin demand) was 429.9 mt, down 16% compared to the same quarter last year, but was 23% above the five year average. Demand for ETFs and similar products in the third quarter was up by 56% on the previous year to 136 mt. Demand in the jewelry sector was down 2% to 448.8 mt compared to 458 mt in the same quarter in 2011. The ongoing slowdown in China continued to dampen demand in the second largest regional jewelry market. Third quarter demand for gold in the technology sector was down on Q3 2011 by 6% at 108 mt though it remains stable. Use of gold in electronics has shown a steady level of incremental growth since the fourth quarter of 2011, driven by demand for tablet devices and mobile phones among others. Both the supply of gold and recycling were down 2% in the third quarter compared to year earlier levels, with mine production down 1% for third quarter 2012. On January 4, 2012, spot gold opened the day at $1,603.60/oz. One year later, the spot gold price stood at $1,656.80/oz , a 3.3% increase in value. (January 4, 2013) Precious Metals ($/oz) Gold $1,656.80 Silver Platinum Palladium Rhodium Ruthenium $30.18 $1,559.00 $687.00 $1,080.00 $85.00 Base Metals ($/mt) Minor Metals ($/mt) Exchange Rates (U.S.$ Equivalent) Aluminum $2,056.00 Molybdenum $26,000 Euro (€) 1.3070 Copper $8,026.00 Cobalt $25,500 U.K. (£) 1.6072 Lead $2,343.00 Canada ($) 1.0131 Nickel $17,325.00 Australia ($) 1.0484 Tin $24,000.00 South Africa (Rand) 0.1169 Zinc $2,027.00 China (¥) 0.1589 Iron Ore ($/dmt) Fe CFR China $150.75 Gold and silver prices provided by KITCO Bullion dealers (http://www.kitco.com). Platinum group metals prices provided by Johnson Matthey (http://www.platinum.matthey.com). Non-ferrous base and minor metal prices provided by London Metal Exchange (http://www.lme.co.uk). Iron ore prices provided by Metal Bulletin Iron Ore Index. Currency exchange rates were provided by the GoCurrency.com. 96 E&MJ; • JANUARY 2013 www.e-mj.com