Today's AM fix was USD 1,567.50, EUR 1,255.31, and GBP 1,003.39 per ounce.Yesterday's AM fix was USD 1,583.25, EUR 1,267.41, and GBP 1,013.73 per ounce.

Silver is trading at $26.85/oz, €21.59/oz and £17.87/oz. Platinum is trading at $1,416.00/oz, palladium at $580.00/oz and rhodium at $1,190/oz.

Gold fell $11.90 or 0.9% and closed at $1,573.75/oz yesterday. Gold initially rose prior to gradual easing and that selling pressure increased soon after the open in Europe. Long term support is at $1,530/oz and resistance is at $1,640/oz.

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Gold will likely be supported again at these levels due to the near certainty that European leaders will fail to come up with concrete measures to solve the region's debt crisis at this week's summit.

Geopolitical risk from the Middle East and the growing Turkey and Syria tensions may also support gold. Hawkish and bellicose words from Turkish leaders continue and Turkey has warned of possible military retaliation against any threat by Syrian forces near its border. Reuters reported yesterday that Turkey was mobilising its forces on the Syrian border.

Periphery debt markets have seen a meagre relief rally today but the Spanish and Italian 10 year remain near 7% and over 6%.

Gold is higher in most major currencies year to date but has surged against the rupee as the Indian rupee hit a record low against major currencies last week.

Indian gold prices are soaring despite official attempts to curtail demand.  In March the Indian government doubled the import duty on gold to 4% in attempts to rectify significant trade deficits and thereby help protect the currency.

There are now reports that the Reserve Bank of India (RBI) is likely to clamp down on gold bullion coin sales by banks as the rising bullion imports are adding pressure to the current account deficit and weakening the rupee.  

Western central banks and mints will not be clamping down on gold bullion coin sales in the near future as demand for gold and silver bullion coins fell in Q1 2012.

Demand for gold coins fell in key markets in the early part of this year as the strong demand for 1 ounce coins and bars fell due to less safe haven demand. 

The United States, Canadian and Austrian Mints, which between them produce three of the world's top five bullion investment coins, all reported lower sales in the first quarter of 2012 versus a year ago.

Combined sales of U.S. American Eagle, Canadian Maple Leaf and Vienna Philharmonic gold coins fell by more than a third to 451,113 ounces in the three months to March.

While demand has indeed fallen, the scale of the far from resolved Eurozone and wider debt crisis means that this decline in demand is likely to reverse again in the coming months. The decline is part of the peak and trough of demand seen in recent years.

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Gold's safe haven status will soon again be realized and universally accepted.  Repeated simplistic assertions that gold is a bubble will be seen as misguided and imprudent.

This is assured as we live in an era where assets previously considered risk free, such as U.S. treasuries and German bunds, are increasingly being questioned.

Egan-Jones Ratings yesterday lowered Germany's sovereign rating on expectations that the country will be left with significant uncollectable receivables due to its exposure to the euro zone.

Egan-Jones has often been ahead of the curve in terms of sovereign credit downgrades and the other rating agencies are likely to follow.

Whether or not Greece and other EMU members exit, Germany will be left with massive, additional, uncollectible receivables, the agency said.

It put the potential direct and indirect exposure at 2.9 trillion euros, which would raise the country's ratio of debt to GDP to a high 114 percent.

It said investors are worried about the burden that could be foisted upon Germany by greater deterioration of the eurozone at-large.

Our major fear is Germany will be expected to provide indirect financial support to weaker EU banks over the next couple of years to ameliorate asset quality problems and replace fleeing deposits.

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Cross Currency Table - (Bloomberg)

If 'risk free' European debt and even German bunds are no longer without risk, it will reverberate throughout all markets (bonds, equities, currencies, gold etc) globally, creating an increase in relative risk levels and a consequent adjustment of investment values.

It means that the record low interest rates of recent years will be no more.

Paper assets and fiat currencies look set to continue to fall against the finite and immutable currency that is gold. Especially as the risks of a global currency war and global competitive currency devaluations remains real. 

Continual short term panaceas by misguided policy makers doing the bidding of powerful banks has delayed the day of reckoning. 

However, there is no such thing as a free lunch and the failure to tackle the root cause of the problem, which is insolvency through too much debt, means that the day of reckoning will be of orders of magnitude greater had more rational policies been implemented.

Gold buying remains steady but surprisingly subdued given the scale of the crisis. 

There remains a fundamental failure to comprehend the scale of the crisis and a blind belief that the world will return to its pre crisis state soon.

This fails to appreciate that the pre crisis state of the world, with massive and unprecedented levels of debt in the U.S., the U.K. and most western economies was anything but normal.