Week ending 25th January 2013

Gold and Silver closed lower for the week with continuing short term pressure while some announcements confirm strong medium term prospects.

Gold and Silver continued to be under pressure, somewhat due to recent weak chart patterns resulting in some technical selling.

HSBC announced midweek that it had halved its exposure to Gold on the back of a decline in risks within the Eurozone (their opinion) and positive signs of progress in US budget talks. This announcement plus the general stronger tone to global equity markets has led to continued short term pressure on Gold.

On Thursdsay Gold had its biggest one day drop in 3 months (US$16 per oz).

Meanwhile there have been some interesting international news that supports a strong medium term outlook and continued support for Gold.

Germany's bank Bundesbank announced on 16/1 that it is planning a phased relocation of 300 tonnes of Gold from New York to Frankfurt and a further 374 tonnes of Gold from Paris to Frankfurt, by 2020. If nothing else, this demonstrates the German bank's long term positive view to Gold.

Bank of Russia stated that it will continue to buy Gold as it seeks to diversify its foreign reserves away from paper assets (they have US$530 Billion in foreign reserve assets). Last year they bought 80 tonnes of Gold and have indicated that they expect to buy a similar volume in 2013.

US Economists interviewed by Reuters overwhelmingly expect the US Fed to continue its current round of bond purchases until at least the end of 2013. In the past this has led to strong support for Gold.

Whilst the week that passed is an interesting assessment for determining your short term strategy we encourage you to review longer term charts by logging onto www.ausmint.com. The following is the 3 Month Chart for Gold.