Gold Failed Breakout but Support Under 1650
Daily Bars
Prepared by Jamie Saettele, CMT
Gold has returned to its range but support comes in from the 20 day average and 1644 low. Last week’s hold above the 4/4 low suggests that gold has been forming a bullish base since mid-March. Exceeding the April high would put bulls in control towards the trendline above 1700 (that line extends off of the September 2011 and February 2012 highs).
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By Brandi BrundidgeMay 2, 2012MARKET NOT SURE HOW TO REACT GOOD NEWS FOR GREECE As active members of the Federal Open Market Committee shared their thoughts about the American economy and Gold demand decreased in India, the yellow metal took a step back in price this week. India has imported 90 tons less in April than it had the same time last year. The number of jobs that were created by American employers was less than expected. Frank McGhee at Integrated Brokerage Services, LLC, voiced his opinion. McGhee said, “The market is clearly worried. The physical demand has also been very weak.”
Standard & Poor’s rating agency has decided to upgrade Greece's long-term credit rating from selective default to sub-investment grade triple-C today, based on the success the eurozone nation experienced with its dreadful bond swap. “The CCC rating on Greece reflects our view of the recent reduction in government debt following the restructuring, the reduction in debt servicing costs as a result of the exchange, and the increased average maturity of the central government debt stock,” S& P wrote in a release.
At 5:19 p.m. (EDT), the APMEX precious metals spot prices were:
• Gold - $1654.70 - Down $8.70
• Silver - $30.67 - Down $0.29
Gold slips as U.S. data lifts the dollar
Wed May 2, 2012 10:22am EDT
* U.S. manufacturing data outstrips soft euro zonenumber
* U.S. economy adds fewer jobs that expected in April
* Gold still held in range by weak physical demand (Updates prices)
By Jan Harvey
LONDON, May 2 (Reuters) - Gold prices fell on Wednesday along with the euro as U.S. factory orders data helped the dollar extend early gains and as speculation faded that the Federal Reserve is set for another round of monetary easing.
Comments from several Fed officials on Tuesday reinforced the notion that the bank is happy to stand pat on policy. Talk of further easing, which could hurt the dollar and keep interest rates low, has added significant support to gold this year.
Spot gold was down 0.8 percent at $1,648.15 an ounce at 1401 GMT, while U.S. gold futures for June delivery were down $13.50 an ounce at $1,648.90.
The metal briefly came off lows after a report showed U.S. private employers added the fewest jobs to the economy since September 2011 in April, denting the dollar's gains. The data is seen as an important precursor to a major jobs report on Friday.
" ADP private sector employment (data) in the U.S. (is) usually seen as a good proxy to non-farm payrolls on Friday," VTB Capital analyst Andrey Kryuchenkov said. A weak payrolls report could reignite talk about more monetary stimulus, weighing on the dollar, he said.
A spate of more positive readings on the U.S. economy recently has cut speculation the United States will extend quantitative easing to stimulate growth, which helped lift gold prices earlier in the year.
BNP Paribas cited waning expectations that quantitative easing is imminent in cutting its gold and silver forecasts for this year, by $140 to $1,715 an ounce and by $4.40 to $33.10 an ounce, respectively.
" (Our economists') central scenario is now for further Fed monetary accommodation to be implemented only in the fourth quarter instead of June," it said.
" This change has significant implications for our gold price forecasts (and by extension for our silver price forecasts), given gold's tight positive relation with the level of market liquidity."
PHYSICAL DEMAND SOFT
Gold prices have been held in check in the last month by a dearth of physical demand, with buyers in key jewellery consumer India deterred by high prices and a weak rupee, exchange-traded funds reporting outflows and coin sales easing.
Some appetite returned for gold coins in May, with the U.S. Mint reporting sales of 10,000 ounces on the first day of the month, half the total sold in the whole of April. That was its worst month for gold coin sales since June 2008.
Holdings of gold-backed, exchange-traded funds monitored by Reuters, which issue securities backed by physical gold and proved a popular investment during the financial crisis, fell by 194,000 ounces in April and edged below 70 million ounces on Tuesday for the first time since Feb. 2.
" As much as the remarkable resilience of gold ETF investment is testament to the ongoing positive sentiment among longer-term players, in our view there's no doubt that the buying has dried up," UBS said in a note on Wednesday.
" In the current lacklustre environment, the market needs more than just resilience. Significant ETF buying will have to resume in order to breathe some life back into gold," it added. " Absent that resuscitating factor, we think gold is likely to continue its aimless wander."
Silver was down 1.4 percent at $30.50 an ounce. Its underperformance lifted the gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, to 3-1/2 month highs.
Spot platinum was down 0.6 percent at $1,557.69 an ounce, while palladium was down 1.2 percent at $667.47. (Editing by William Hardy and Jane Baird)
By Timothy OakesMay 2, 2012JOB CREATION WEAKER THAN EXPECTED CHINA DEMANDS APOLOGY Precious metals have remained relatively steady in overnight trading. Stock markets are down on less-than-stellar jobs data. A popular topic among investors is the steadiness that precious metals prices have had over the past few days and weeks. One metals strategist said, “Gold will probably be sitting in limbo for a few more days. … It is rather inversely sensitive to positive numbers, as evidenced by the ISM number overnight.” A metals dealer in Hong Kong said, “Investors are standing on the sidelines of the market, waiting for the uncertainty around the U.S. economy, eurozone and QE3 (third round of quantitative easing by the Fed) to clear up.”
China is clearly upset about the United States’ handling of a Chinese dissident, having allowed him to stay in the American Embassy for at least six days. How this plays out during meetings over the next couple of days is anyone’s guess. While Secretary of State Hillary Clinton said, “I am pleased that we were able to facilitate Chen Guangcheng’s stay and departure from the U.S. Embassy in a way that reflected his choices and our values.” But the Chinese government was quite angry, saying, “The U.S. method was interference in Chinese domestic affairs, and this is totally unacceptable to China. China demands that the United States apologize over this, thoroughly investigate this incident, punish those who are responsible, and give assurances that such incidents will not recur.”
Most economists had expected 170,000 new jobs would be reported for April, but according to ADP data released this morning, only 119,000 jobs actually were added. Many economists said the warmer winter affected job additions during the last few months. Economic adviser Joel Prakken said, “There is some evidence that unusually warm weather boosted employment during the winter months, with a ‘payback’ now coming due.”
At 9 a.m. (EDT), the APMEX precious metals spot prices were:
- Gold - $1,655.30 – Down $8.10.
- Silver - $30.56 – Down $0.38.
Last Updated : 02 May 2012 at 09:00 IST
Source :Commodity Online
Gold technical charts suggest slight downward trend
LONDON (Commodity Online): Gold’s drifting, consolidative action in a narrow trading range suggests that it might be forming a triangle/wedge pattern on technical charts, said Rob Kurzatkowski, senior commodity analyst at optionsXpress.
He continued that, “This suggests that a potential breakout may be on the horizon. Given the preceding move lower, there is a slight downward bias. However, if prices are able to cross the 50-day moving average and $1,700 level on the upside, the market may gain traction. The oscillators are currently at neutral readings, as evidenced by the RSI (relative strength index) hovering near 50 and momentum sitting near zero.”
Possible triggers for a trend change include Thursday’s meeting of the European Central Bank and Friday’s nonfarm payrolls data.
“The fact that ETF/ETN holdings of the metal have slipped can be seen as a negative if the trend continues, as funds have been a major catalyst of metal demand. If we see strong central-bank buying of the metal, it may offset some of the negative effects of lower fund holdings,” Kurzatkowski concluded.
Gold Short Term Bullish Base?
Daily Bars
Prepared by Jamie Saettele, CMT
Last week’s hold above the 4/4 low suggests that gold has been forming a bullish base since mid-March. Exceeding the April high would put bulls in control towards the trendline above 1700 (that line extends off of the September 2011 and February 2012 highs).
Bottom Line (next 5 days) – higher? 
By Brandi BrundidgeMay 1, 2012METALS SHOW LITTLE MOVEMENT FED OFFICIALS RAISE CONCERNS Precious metals prices have remained steady in afternoon trading, as the majority of world markets are closed in observance of May Day. United States manufacturing data released today is still a plus in the eyes of investors stock markets were up, but metals remained relatively flat. Year to date, the Gold price is up 6 percent after the Federal Reserve in January said that interest rates would remain near zero until 2014 to encourage economic development.
Pimco Chief Executive Mohamed El-Erian said, “The U.S. economy is on the right path but it’s not moving fast enough.” El-Erian said he thinks the Federal Reserve should not implement another round of quantitative easing at this time.
Two Federal Reserve officials advised that America could be heading toward a fiscal cliff by the end of the year if mandated tax increases and spending cuts are implemented. Atlanta Fed President Dennis Lockhart said there could be a “financial shock” if markets begin to anticipate that lawmakers in Washington will not address the situation. The goal here is to build a stronger foundation for America to be able to control the budget deficit.
At 5:26 p.m. (EDT), the APMEX precious metals spot prices were:
- Gold - $1,663.60– Down $1.60.
- Silver - $30.97 – Down $0.06.
By Timothy OakesMay 1, 2012PRECIOUS METALS PRICES STABLE MANUFACTURING INDEX HIGHER Precious metals prices remained relatively stable through morning trading. The dollar rallied on better-than-expected manufacturing data. The inverse relationship between the dollar and Gold continues. The better results dampen any expectations of further quantitative easing measures in the near term, which stabilizes Gold prices. HSBC analyst James Steel said, “The bullion markets have been on the defensive since U.S. Federal Reserve Chairman Ben Bernanke began distancing the Fed from a third round of quantitative easing in testimony to Congress on 29 February.” Other analysts said that Gold really just “needs another catalyst” besides quantitative easing.
Meanwhile, a blind Chinese dissident has holed himself up in the United States Embassy in China ahead of a rather important meeting between the United States and China in Beijing to discuss human rights, foreign trade and other topics. The Chinese dissident, Chen Guangcheng, escaped from house arrest and wants to stay in China. The talks this week are likely to cover China’s role in foreign relations, including any involvement in the nuclear programs in Iran and North Korea, the Syrian situation, and some other territorial issues. Secretary of State Hillary Clinton said she is not shy about pressing the issue of human rights. In a news conference, she said, “A constructive relationship includes talking very frankly about those areas where we do not agree, including human rights.” In regards to Chen, the prevailing thought is that he might have to leave China.
Manufacturing index numbers beat initial estimates in a report this morning, climbing to 54.8 percent for the month of April. This exceeded even the most optimistic estimates. Manufacturing “continues to be a bright spot in the recovery,” said Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York. “We have yet to see a drop-off in foreign demand for U.S. manufactured goods, and that comes despite all the concerns of a slowdown in the global economy.”
At 12:53 p.m. (EDT), the APMEX precious metals spot prices were:
- Gold - $1,664.80 – Down $0.40.
- Silver - $31.17 – Up $0.15.
Gold hits 2-week high as US data weighs on dollar
SINGAPORE, May 1 (Reuters) - Spot gold hit a two-week high
on Tuesday, extending gains from the previous session, as the
dollar remained under pressure from U.S. data that suggests
slower momentum in economic recovery.
FUNDAMENTALS
* Spot gold rose to $1,667.45 in early Asian hours,
its highest since April 13, before easing to $1,665.70 an ounce
by 0038 GMT.
* U.S. gold gained 0.1 percent to $1,666.60.
* The U.S. economy appeared to downshift as it entered the
second quarter, with consumers increasing their spending only
modestly last month and a gauge of business activity in the
Midwest falling sharply in April.
* The dollar index hovered near a two-month low hit
in the previous session.
* Spain sank into recession in the first quarter and
economists said spending cuts aimed at meeting strict EU deficit
limits, together with a reeling bank sector, would delay any
return to growth until late this year or beyond.
* Spanish government bond yields fell on Monday after data
showed the country's economy contracted less sharply than
forecast, but they were expected to pick up again before debt
sales on Thursday, the first for Madrid since last week's
ratings downgrade.
* Investors are keeping an watchful on the weekend elections
in France and Greece, as well as a European Central Bank meeting
on Thursday.
* SPDR Gold Trust, the world's biggest gold-backed
exchange-traded fund, said its holdings fell 0.47 percent from
the previous session to 1,278.32 tonnes by April 30, the lowest
since mid-February.
* A number of markets in Asia, including China, Hong Kong,
India, Malaysia, Philippines, Singapore, South Korea, Thailand,
Taiwan and Vietnam, are closed on Tuesday for a public holiday.
MARKET NEWS
* The S& P 500 posted its first monthly decline since
November on Monday, as stocks slipped on signs the U.S. economy
may be slowing and as a recession in Spain highlighted risks in
the euro zone.
* The yen held at two-month highs against the dollar on
Tuesday, having rallied across the board overnight as investors
snapped up the safe-haven currency after disappointing economic
news from Canada to Spain tempered risk sentiment.
DATA/EVENTS
0100 China NBS Manufacturing PMI Apr
1145 U.S. ICSC chain stores yy Weekly
1400 U.S. ISM Manufacturing PMI Apr 1400 U.S. Construction spending Mar
By Brandi BrundidgeApril 30, 2012SPAIN URGED TO RESTRUCTURE NOW AMERICA IN ‘LATE GREAT DEPRESSION’
Gold’s price recovered from early losses today as the focus in the eurozone debt crisis shifted to Spain. The financial circumstances surrounding Europe and the United States are looking optimistic for the Gold price, analysts said. “Investors will continue to seek refuge in its safe-haven status. Standard and Poor's cut the top-notch credit rating for the U.S. The debt crisis appears aggravated in Europe. We are not doing very well in India. Given the uncertainties about the fate of the global economy and closer at home, the yellow metal will continue to soar to new heights,” one analyst said.
News of Spain’s monetary crisis ultimately pushed the euro down and strengthened the American dollar this morning. With last week’s credit downgrade of two notches to BBB+ with a negative outlook for Spain’s credit rating by Standard & Poor’s, along with rising borrowing costs for the economy, it is no wonder why this is happening so quickly. Carl Weinberg at High Frequency Economics had some interesting advice for the country in order to prevent another Greece ordeal. Weinberg said, “The time to restructure Spain’s debt burden is now, before the market declines to fund its cash needs, and before billions are squandered unfixing its finances.”
Economist and author Robert Shiller said he believes the United States is in a state of “late Great Depression” as consumer confidence shows a shortage of trust in the economy. “Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now,” Shiller said.
At 5 p.m. (EDT), the APMEX precious metals spot prices were:
- Gold - $1,666.60 - Up $0.80.
- Silver - $31.07 - Down $0.36.
By Nicholas WilseyApril 30, 2012GOLD PRICE BACK NEAR EVEN COMMERCE DEPARTMENT SHARES MIXED VIEW The Gold price stayed mostly steady for the first half of Monday. The price lowered this morning based on the strength of the American dollar. Later in the morning, information was released that softened Gold’s price drop. With less growth in the United States and a higher expectation for quantitative easing, Gold has been able to remain steady. “Gold’s ability to hold above $1,620 an ounce this month, despite several tests of that level, is cheering investors that the longer-term bull trend is intact,” analysts said.
The financial issues in Europe have been well-documented. Germany has yet to follow the pack toward instability. Germany’s sales, employment, and overall economic growth have bucked the trend of European failures. Bob Parker, a senior adviser for Credit Suisse, said, “What we’re now seeing is a modest improvement in retail spending, and with the low unemployment, the German economy should grow at a minimum of 0.7 percent — I’m assuming spending will slowly improve.”
American consumer spending reports are worse than expected. Higher gasoline prices and lack of consumer confidence are major factors in the disappointing numbers. Surveys show small-business hiring slowed in April, which adds to the pressures on the consumer market. However, on a bright side, the manufacturing reports have shown improvements. “Personal spending rose 0.2 percent in March, in the 12 months through March the PCE index was up 2.1 percent, the lowest in a year but still just above the U.S. Federal Reserve's target of 2 percent,” the Commerce Department said.
At 1:07 p.m. (EDT), the APMEX precious metals spot prices were:
- Gold - $1,664.80 - Down $1.00
- Silver - $31.03 - Down $0.39
Last Updated : 30 April 2012 at 19:05 IST
Gold's bullishness depends on its safe-haven appeal: Barclays
NEW YORK (Commodity Online): Gold prices have drifted lower as the return of jewellers in India, following the 20-day strike, has not boosted demand sufficiently. Volume traded on the Shanghai Gold Exchange also remains below the monthly average.
However, gold appetite, expressed through physically backed ETPs, has remained resilient, but the upside potential rests with gold's ability to reinstate its safe-haven appeal in the near term as market focus returns to the European peripheral countries.
Exchange and Holdings
Gold held ETPs saw some slight attrition this week (ending April 28, 2012) with holdings down by almost 5 tonnes. Overall, month-to-date outflow has grown to 10 tonnes. Comex gold's speculative net length dropped 7k lots. This was mainly due to a large reduction in long positions by 3.7k lots and an addition of 3.3k lots of short positions
Physical demand
As the festival of Akshaya Tritiya was celebrated, the second largest gold-buying event in India, buying in India was lacklustre ahead of the festival as consumers bought smaller pieces in light of relatively high prices.
The latest IMF statistics revealed among the net purchasers, Mexico added 16.8 tonnes to take reserves to 122.6 tonnes, Russia bought 16.6 tonnes to take holdings to 895.8 tonnes (following selling of 3.8 tonnes in February), Argentina bought 7 tonnes to take reserves to 61.7 tonnes and Kazakhstan bought 4.3 tonnes in March taking its purchases over Q1 12 to 14.2 tonnes.
In supply news, GoldCorp, the fifth largest gold producer, reported its gold production fell 18% y/y and 24% q/q to 524.7koz in Q1 12 following delays at its Red Lake operation in Canada and completion of its open pit mining operations in Guatemala
Technical
Gold looks bullish for gold. A break above $1665 will confirm a move higher in range toward the $1700/$1717 area.
Source: Barclays Capital Commodities report
By Timothy OakesApril 30, 2012Gold & Silver Prices are Down Sharply in Morning TradingStock futures are unchanged, while the precious metals markets turned sharply lower in the last hour. The news that the Spanish economy is officially in a recession certainly puts a damper on the markets. Austerity programs and spending cuts make it unclear when the economy might ever begin to turn around. Spain is the euro zone’s 4th largest economy and it is under pressure to reduce its public debt. This is having a negative effect on the euro, this boosting the USA dollar.
Another key element to keep an eye on a potentially testy trip to Beijing this week by Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner revolving around trade talks and global issues. What makes things testy are the human rights issues that have been prevalent and issues involving China’s allies Iran and North Korea. The other underlying factor is the upcoming elections in the U.S. and change in leadership in China. Kenneth Lieberthal said, “It is feasible that this will become a very big deal with major negative impact on U.S.-China relations, but it is also feasible and far preferable that this be able to be negotiated quickly and quietly.”
The outlook of gold is still tied in quite heavily to pro quantitative easing sentiment. According to LGT Capital’s Bayram Dancer, “We had the GDP data from the United States, which (fuelled) higher hopes of quantitative easing. Analysts have really decreased (their expectations for QE), but I feel if the conditions are right, we can still see some sort of quantitative easing.” However, the fact that gold has remained over $1,620 an ounce is making investors pretty happy.
At 9:05 a.m. (EDT) – the APMEX precious metals spot prices were:
- Gold - $1,653.50 – Down $12.30.
- Silver - $30.82 – Down $0.61.
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