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April 1, 2013

Release Date: 
Monday, April 1, 2013

Gold began the month effectively unchanged during morning trading on the New York Spot Market while silver prices fell more than 1%. You can see the most current spot prices here.

The managing director of GoldSilver Central Pte Ltd. told Reuters, “[w]e see physical buying by the retail investors during price dips and this helped to support prices, which should go up above$1,600. If everything goes well, it seems like gold could move on to a higher trading range. Gold should test $1,620." (“Gold rises on China PMI data; flirts with $1,600,” Reuters, 4/1/13.)

Gold prices may rise based upon growing tension on the Korean peninsula. North Korea reaffirmed its “state of war” with South Korea this weekend. “Geopolitical concerns are likely to push up demand for gold bin the coming week, Gold prices are likely to inch up in the coming week as safe haven demand for the yellow metal is seen improving amid mounting geo-political tensions. North Korea has threatened military action against South Korea and the US, which could push up demand for assets such as gold, and create supply bottlenecks for commodities such as crude oil.” (“Gold Fundamental Analysis April 2, 2013 Forecast,” FXEmpire, 4/1/13.)

Manufacturing slowed in March, falling 2.9% from February, according to the Institute for Supply Management. “[T]he drop in February was bigger than economists expected, suggesting some companies may have been wary of steep government spending cuts that began on March 1.” (Survey: Manufacturing pace slows in March,” USA Today, 4/1/13.)

Bank of America Merrill Lynch adjusted its forecast for the remainder of 2013, stating gold will average $1,670 an ounce this year. This represents a 4% increase from current prices. (“Bullish Bets Rebound at Fastest Pace in Four Years: Commodities,” Bloomberg, 4/1/13.)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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