Gold added 0.6% ahead of Christmas Week Rally ECB Member vows Duty of Action, hints at Quantitative Easing

Gold's price was flat in London Friday, ending the short pre-Christmas session + 0.6% from last week's finish after setting an AM Gold Fix of 1607.50 oz.

Silver's price also finished flat, moving in a tight range below 29.50 and recording a London Fix almost 1.9% down on the week.

Global stock markets ticked higher overall in light trade, and Crude Oil prices extended their strongest rally since October.

Gold's price has gone up during the period between Christmas and New Year in 8 of the past 9 years, Y2004 was the exception) rising by just over 2% on the average. So, if this trend continues, Gold would stand at 1,650 by years end.

The 200-Day Moving Average, currently at 1624, the Key support turned Key resistance

European Central Bank (ECB) member Lorenzo Bin Smaghi says in an interview Saturday that he sees no reason not to use quantitative easing (QE) if the economic outlook deteriorated and deflation becomes a risk.

Spanish and Italian government bonds ticked lower Friday, pushing the interest rate on 10-yr debt above 5.4% and 7.0% respectively.

The ECB should use as much constructive ambiguity as possible Bin Smaghi says, adding that the ECB has a duty of action to help struggling governments where the issue is liquidity, not solvency.

India, the World's #1 physical Gold consumer is looking for sharp drop in the Gold price to boost the demand.

Across in Tehran, Iranians are rushing to buy Gold and USDs according to reports, and that is driving the National currency South

The Rial has lost some 15% vs. the USD this month, and bureau de change are charging 15,300 Rials per Dollar, almost 39% above Tehran's official exchange rate.

Iran state television this week showed lines of people camped out overnight in front of state banks, with sleeping bags and blankets, saying they were waiting to buy Gold coins according to the report.

Faced with new US and EU sanctions, + inflation running near 20% per year, the Central Bank of Iran suspended deliveries of Gold coins on 20 December, imposing what it calls a just distribution system by delaying settlement of new purchases by 4 months. Stay tuned...

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.