Crude is down about 1%, gold is up roughly $5, and silver is today’s standout, gaining around $1.00 after being hit hard recently. The implied December gold EFP on WatchGold.org is around $27.50 (4.37% annualized yield to December), down approximately $1.75 from Friday. It remains at a slight premium to OTC, but with only about 10 bps of premium, the economics no longer appear particularly attractive for moving physical metal across the Atlantic.

From the LBMA Conference: Speaking today in Sorrento, Bundesbank President Joachim Nagel highlighted the continuing case for diversification into gold amid geopolitical uncertainty and rising sovereign debt. When one of the world’s largest gold-holding central banks discusses gold’s strategic role, it’s worth paying attention. At WatchGold.org, we certainly are!

Gold’s importance on central-bank balance sheets is another reminder of how the role of the metal has evolved in the global reserve system.

My longer-term view: continued central-bank demand should remain supportive for gold and, indirectly, silver. The bigger question is what happens to U.S. rates as geopolitical risks evolve, particularly the Iran crisis, where a resolution could still be 6–12 months away. The U.S. midterm elections are another key event to watch, particularly which party controls the House and what that could mean for fiscal policy, rates and the dollar. Plenty to watch, even on a quiet day.

For educational and informational purposes only. Nothing here constitutes investment advice or a recommendation to buy or sell any security, commodity or financial instrument.