Gold holdings in exchange-traded products rose to a record 2,360.685 metric tons on December 13

Gold holdings in exchange-traded products rose to a record 2,360.685 metric tons on December 13, data compiled by Bloomberg show. That’s equal to more than 10 months of global mine supply and greater than the reserves of all but four of the world’s central banks, which are expanding holdings for the first time in a generation.

Gold has been “temporarily dragged down” by US dollar strength and lower prices in other commodities, Standard Chartered Plc said in a report today. The weakness in gold is likely to be short-lived as problems in the global economy remain supportive, HanPin Hsi, an analyst at the bank, wrote in the report. The bank said consumers should “buy the dips.”

Silver for immediate delivery fell 6.8% to $28.675 an ounce. Spot platinum fell 4.3% to $1,411 an ounce and palladium slid 6.8% to $601 an ounce.

Meanwhile, US stocks fell for a third day, the euro slid below $1.30 for the first time since January and commodities sank as growing funding stress in Europe fueled concern the region is struggling to contain the debt crisis.

The Standard & Poor’s 500 Index fell 1.1% to 1,211.95 in New York and the Stoxx Europe 600 Index retreated 1.9%. The euro depreciated as much as 0.7% to $1.2946. Oil dropped the most since September and gold slid below $1,600 an ounce for the first time since October. Ten-year US Treasury yields lost five basis points to 1.92%, while the rate on the the 30-year German bund reached a euro-era record low of 2.38%.

Italy’s five-year yield increased at an auction today, default swaps protecting European sovereign debt traded near a record high and borrowing costs climbed for banks in the region as plans hashed out last week to create a closer fiscal union in the euro zone fail to alleviate concern about the crisis. “We’re not seeing the developments unfold that show they want to put an end to the crisis now,” said David Watt, senior currency strategist at Royal Bank of Canada’s RBC Capital unit in Toronto. – Bloomberg

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Posted by admin on Dec 15 2011. Filed under Gold ETFs, Gold stocks. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry