Euro-gold hit a new all-time high today

Euro-gold hit a new all-time high today. We expect it to move higher. Many parallels have been drawn between the current EMU debt problems and the problems seen with Greece Apr'10 to
Jul'10. As a result we look at the how commodities reacted between April and July to euro weakness (against the USD) On average, commodity prices have fallen much more on euro weakness than they have rallied higher on euro strength between April and July this year. The only exception was gold - gold increased on euro weakness, confirming gold's status as hedge
against credit risk — we believe gold is set to do so again.

In the gold physical market we believe buying interest will remain on dips in the physical market, while it is likely to slow somewhat when gold approached $1,375, but on balance we believe the interest will be buying, not selling. The IMF indicated they sold 19.5 tonnes of gold in October. This is part of the 403.3 tonnes the IMF in 2009 indicated they would sell and as a result we view this announcement as market neutral.

Gold support is at $1,356 and $1,346. Resistance is at $1,379 and $1,395.

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