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Gold rises as dollar falls
* Gold rallies as dollar turns lower
* Correlation with dollar turns more negative
Gold eases after 4-day rally, palladium off
* Doubt over a Fed QE3 undermines gold
* GFMS annual price outlook limits losses
* Palladium dented by cooler Chinese car sales
By Carole Vaporean
NEW YORK, April 11 (Reuters) - Gold dipped on Wednesday as a buying spree paused after four straight sessions of gains, but the stronger euro and a bullish price outlook from metals consultancy GFMS provided support.
" The market tone is a bit better, but we have had a bit of risk-back-on in the last day or two. So, I think that is hurting gold somewhat," said Peter Buchanan, senior economist at CIBC World Markets in Toronto.
He said gold should draw more support from investor expectatoins that the Federal Reserve will refrain from trying to stimulate the U.S. economy with a third round of government bond buying, or quantitative easing, known as QE3.
" We're still doubtful the Fed is going to pull the trigger on QE3, even with the soft U.S. payrolls," he said, noting last week's weaker-than-expected jobs data.
Buchanan said he saw " some hints" that the European Central Bank may take measures to stimulate the euro zone, " so, that's probably supporting sentiment" among gold investors also.
The euro climbed against the dollar and yen, as prospects for more rounds of ECB bond buying calmed jitters over heavily indebted Italy and Spain.
Spot gold was off 0.2 percent at $1,657.16 an ounce by 3:09 EDT (1909 GMT). U.S. June gold futures finished 40 cents lower at $1,660.30 per ounce.
On technical charts, gold's losses held well above long-term channel support, steadying above the $1,611 per ounce low of last week. (Graphic: link.reuters.com/wax57s )
" The broader macro environment still remains positive. In the near term, the floor will be set by a combination of how strong investment demand is and how responsive the physical market is," said Suki Cooper, a precious metals analyst at Barclays Capital.
Speculators have cut ownership of U.S. gold futures by more than a quarter since late February, although holdings of the metal in exchange-traded funds remained near the record high above 70 million ounces.
" Gold has found more support recently, but it doesn't have all of the catalysts in place to be driven substantially higher yet," Cooper said.
EURO TIES STRENGTHEN
The correlation between gold and the euro/dollar exchange rate strengthened on Wednesday to its most positive since early January, above 65 percent. That means the gold price is more likely to move in tandem with the single European currency than it was just six weeks ago.
" We think gold will be in a range of $1,600 to around $1,690 or $1,700, which is a fairly wide range. But I think it will be difficult for gold to break out of that range," Standard Bank analyst Walter de Wet said.
" What we are seeing is growing interest to buy in the physical market below $1,630. Should we drop below $1,600 the demand will be pretty strong," he said.
Metals consultancy GFMS, a unit of Thomson Reuters, said in its annual outlook for the gold market that a record high price above $2,000 an ounce next year could mark the peak of the precious metal's bull run of more than decade, as monetary policy in major economies starts to tighten.
For now, gold could drive above $2,000 on concerns over the euro zone debt crisis and the idea of more U.S. monetary easing, GFMS Chairman Philip Klapwijk told Reuters.
On the demand side, Hong Kong's gold exports to China rose 20 percent in February, as appetite for the precious metal remained strong there.
" On the public level, China's central bank will continue to accumulate gold, which is easier than liberalising their capital account and currency," said Jeremy Friesen, a commodity strategist at Societe Generale.
Accommodative monetary policy will remain an incentive for private investors to buy gold, he added.
Silver fell 0.8 percent to $31.51 an ounce, pushing the number of ounces of the white metal needed to buy one ounce of gold up to 52.5 from 50 just one week ago, reflecting gold's relative out performance.
Platinum and palladium were lower, with platinum down 1.0 percent at $1,576.30 an ounce and palladium off 0.7 percent at $632.28 an ounce.
Earlier, data showed car sales in China cooled in March, following sharp gains in February. That weighed on palladium in particular.
Palladium is used mainly in catalytic converters in the exhaust systems of gasoline powered vehicles. China is now the
world's largest car market and is chiefly gasoline-driven.
Closing Gold & Silver Report 4/11/2012
By John FosterApril 11, 2012U.S. BUDGET DEFICIT WIDENS N. KOREA PRESSES TOWARD ROCKET LAUNCH
Gold prices are still trading below opening levels and may snap a four-session streak of price gains. Investment in Gold has dropped off since late-February highs as investors appear to be looking for more definitive reasons to keep buying. “The broader macro environment still remains positive. In the near term, the floor will be set by a combination of how strong investment demand is, and how responsive the physical market is,” said Suki Cooper at Barclays Capital.
The U.S. government’s budget deficit widened by 5.3 percent in March, with the shortfall expanding to $198.2 billion. While a gap of $196 billion had been projected, the increase was due to increases in subsidies to TARP and recurring benefit payments. “The government budget deficit is still bursting at the seams, with little chance that either side of the aisle is willing to shake hands and get a deal done,” said Chris Rupkey of Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, before the report was released. “The economy is growing again, but we can’t grow our way out of these trillion-dollar deficits,” he said. During last year’s debt-ceiling debate, precious metals prices set record highs.
Despite international protests, North Korea continues toward its planned long-range rocket launch. The rocket, which began fueling Wednesday, could lift off as early as Thursday and complete a three-stage flight over the water near the Philippines. U.S. Secretary of State Hillary Clinton warned that history alludes to “additional provocations” from North Korea likely to follow after the launch, an apparent reference to the possibility of a nuclear test.
At 4 p.m. (CDT), the APMEX precious metals spot prices were:
- Gold - $1,660.50 – Down $0.70.
- Silver - $31.63 – Down $0.11.
April 11, 2012 • 06:03:49 PDT
Gold 'To Hit $2,000' On Spain Fears
looming flare-up in the eurozone crisis over Spain will drive the price of gold towards $2,000 an ounce this year, leadi... Read More
Gold may fall below $1550 soon, rebound to $2000 by end-2012: Thomson Reuters GFMS
LONDON (Commodity Online): Gold prices may fall below $1550 an ounce in the next month or two but the medium term outlook is bullish and the yellow metal would climb back to $2000/Oz by 2012-end, according to Gold Survey 2012 published by Thomson Reuters GFMS and released here on Wednesday.
According to Philip Klapwijk, Global Head of Metals Analytics at Thomson Reuters GFMS, the low of $1600 came a s a little surprise but it could even go lower in the short run. Short-term caution was advised due to such factors as the Eurozone crisis seeming to have abated and lower expectations of QE3 in the US.
Breach of $2000 levels is expected by first half of 2013, one of the main drivers of this reversal during the year was expected to be the resumption of acute fears over Eurozone sovereign debt, with Spain set to be the new principal area of concern. Moreover, it was thought that over the next few months the US recovery will begin to falter and that this will force the Federal Reserve into taking additional monetary policy measures. Both developments were expected to lead to a period of further monetary easing and not just in the industrialised world, with China, India and Brazil becoming obliged to adopt additional loosening strategies. Klapwijk noted, “a corollary of all this monetary largesse is fears about resurgent inflation, and that becomes all the more likely if oil prices motor higher should tensions get any worse between Iran and the US.”
Many of the factors expected to fuel investor interest this year were present in 2011, with the Gold Survey giving great attention to low or negative real interest rates and shaky equity markets, which respectively lowered the opportunity cost of holding gold and burnished its safe haven credentials. Despite that, total investment actually dipped last year in tonnage terms as selling centred on the futures and OTC markets, which stemmed from liquidity squeezes, profit taking and technical selling, outweighed a bumper year for physical investment. Such buying, however, actually meant that, in approximate value terms, net World Investment rose by a healthy 15% to a record level of just over $80 billion.
Investors were also inspired by the turnaround in central bank activity as official sector purchases last year shot up to just over 450 tonnes. This growth was mainly ascribed to a further year of trivial sales by signatories to the Central Bank Gold Agreement and heavy purchases elsewhere by those keen to diversify dollar reserves, a development also felt likely to feed through to sizable acquisitions this year.
The Gold Survey feels that was perhaps the most obvious bright point on the fundamental side, although the fact that jewellery fabrication only fell by 2% in 2011 was said to demonstrate marked resilience in the face of soaring prices, with Klapwijk adding, “gold was clearly dependent on emerging markets’ economic strength as China’s jewellery demand grew to a record level, while India’s fell by less than 3%.” Heavy western losses in jewellery were replicated in their inverse by a major rise in these countries’ jewellery scrap, as sellers were motivated by high prices, economic problems and the ease of recycling. In contrast, the report notes that, due to such factors as price acclimatisation and bullish sentiment, scrap from traditionally price sensitive areas fell, in doing so dragging down the global total by 3%. The above drop all but countered the rise in mine production, which the report shows to have grown by 3%, representing the third year of gains.
Klapwijk commented, “it seems evident that the mining sector is deriving clear benefits from a decade of rising prices, as this has given us a healthy pipeline of new projects coming on stream, and high absolute prices, as that means several mature operations are staying productive for longer than would otherwise have been the case.” There was a larger change in tonnage terms for producer hedging as this swung from net de-hedging of 108 tonnes in 2010 to a small positive last year. However, the consultancy cautioned that this does not represent a sea change in attitudes towards hedging and instead ongoing project hedging and the small scale these days of the legacy position.
Gold pauses after rally, focus on euro zone
* Correlation tightens with euro
* Safe-haven bid could reenter the market
* Palladium dented by cooler Chinese car sales
LONDON, April 11 (Reuters) - Gold steadied on Wednesday, after rising for four days straight, as the intensifying euro zone debt crisis threatened to undermine the euro and offset any potential safe-haven demand for the metal.
The euro rose on Wednesday but has come under pressure in the past week as the debt crisis has reignited. The focus is now on Spain, where the head of the central bank said on Tuesday commercial banks would need more capital if the economy continues to deteriorate.
Benchmark 10-year Spanish yields touched 6 percent for the first time since early December on Wednesday, having risen by more than two-thirds of a percentage point in the past week alone, while peripheral banking stocks have been pummelled.
Spot gold was last down 0.1 percent on the day at $1,659.00 an ounce by 1525 GMT, while U.S. June futures were down 0.1 percent at $1,659.90 an ounce.
Gold in euros was last down 0.5 percent at 1,261.72 euros an ounce, having touched two-week highs the previous day above 1,271.00 euros.
" The broader macro environment still remains positive. In the near term, the floor will be set by a combination of how strong investment demand is and how responsive the physical market is" Suki Cooper, an analyst at Barclays Capital, said.
Investment in gold has cooled somewhat. Speculators have cut their ownership of U.S. gold futures by more than a quarter since late February, although holdings of the metal in exchange-traded funds remain near record highs above 70 million ounces.
" Gold has found more support recently, but it doesn't have all of the catalysts in place to be driven substantially higher yet," Cooper said.
EURO TIES STRENGTHEN
The correlation between gold and the euro/dollar exchange rate strengthened on Wednesday to reach its most positive since early January, above 65 percent. That means the gold price is more likely to move in tandem with the single European currency than it was just six weeks ago.
" We think gold will be in a range of $1,600 to around $1,690 or $1,700, which is a fairly wide range. But I think it will be difficult for gold to break out of that range," Standard Bank analyst Walter de Wet said.
" What we are seeing is growing interest to buy in the physical market below $1,630. Should we drop below $1,600, the demand will be pretty strong," he said.
Metals consultancy GFMS, a unit of Thomson Reuters, said in its annual outlook for the gold market that a record high price above $2,000 an ounce next year could mark the peak of the precious metal's bull run of more than decade as monetary policy in major economies starts to tighten.
Gold prices for now are likely to drive above $2,000 as concerns over the euro zone debt crisis persist and the idea of more U.S. monetary easing gains support, GFMS Chairman Philip Klapwijk told Reuters.
In Europe, Italian one-year borrowing costs rose for the first time since November at a sale of short-dated paper on Wednesday, reflecting fresh doubts in the market about the more indebted euro zone nations and nerves ahead of a larger three-year sale on Thursday.
On the demand side, Hong Kong's gold exports to China rose 20 percent in February on the month as appetite for the precious metal remains strong in China, which is expected to overtake India as the world's top gold consumer this year.
Some suspected the number could include purchases from the public sector, as the market was largely quiet during a post-Lunar New Year holiday slump in February.
" On the public level, China's central bank will continue to accumulate gold, which is easier than liberalising their capital account and currency," said Jeremy Friesen, a commodity strategist at Societe Generale, adding that building gold reserves would help China's push to turn the renminbi into a global currency.
Accommodative monetary policy will remain an incentive for private investors to buy into gold, he added.
Silver fell 0.3 percent to $31.69 an ounce, pushing the number of ounces of the metal needed to buy one ounce of gold up to 52.5 from 50 just one week ago, reflecting gold's relative outperformance.
Morning Gold & Silver Market Report – 4/11/2012
By Timothy OakesApril 11, 2012EUROZONE WORRIES MOUNT LEADERSHIP QUESTIONS ARISE IN CHINA
Precious metals prices have held relatively steady this morning, despite the Indonesian earthquakes and heightened concerns in the eurozone. But European concerns and their byproduct of easy monetary policy would be viewed as good for Gold. Standard Bank’s Walter de Wet said, “If there are credit concerns, we think Gold will benefit but it might not be in dollars. If there are problems in Europe, we will see the euro weaken against the dollar. … What it would do in this environment where we’ve seen macro selling in Gold over the last couple of weeks is, at least for now, it won’t push Gold higher, but at least it will make people think twice about liquidating long positions.” China also is likely to continue to accumulate stores of Gold for its central bank.
An interesting development in France is that the ongoing debt crises in the eurozone are seen as a boost for French President Nicolas Sarkozy. Although he trails in most polls, the growing uncertainty within the region is boosting his appeal after his work with German Chancellor Angela Merkel in handling the Greek debt issues. However, Sarkozy does trail challenger Francois Hollande in most polls. Sarkozy said, “If we return to spending without control, we will find ourselves in the same situation as Spain.” The main worry is that if Spain were to default, which other nations are starting to fear, then the $1 trillion already in the coffers will not be enough to protect the eurozone. Spain’s problems are viewed by some analysts as far worse than those of Greece.
China also is having its share of leadership drama: The wife of a Communist Party leader is embroiled in a murder conspiracy. This is causing the planned handover of power to prove quite scandalous. Most people in China view this is the most volatile change in leadership since the 1989 crackdown for democracy in Beijing. There will be a re-allocation of power within the party, but what will happen is not clear. People’s Daily Chief Editor Wu Si said, “The rules for establishing the new array of power at the top have not been settled. The old rules don’t apply, and the new ones are a work in progress.” With China facing tougher economic times, leadership will need to provide some stability, and many observers are questioning whether that is probable.
At 8:06 a.m. (CDT), the APMEX precious metals spot prices were:
- Gold - $1,659.00 – Down $2.20.
- Silver - $31.66 – Down $0.08.
Gold steadies as debt crisis looms over euro
(Reuters) - Gold steadied on Wednesday, following four straight days of rallies, as the intensifying euro zone debt crisis threatened to undermine the euro and offset any potential safe-haven demand for the metal.
The euro rose on Wednesday, but has come under pressure in the last week as the debt crisis has reignited, this time by concern about Spain, where the head of the central bank said on Tuesday commercial banks will need more capital if the economy continues to deteriorate.
Benchmark 10-year Spanish yields touched 6 percent for the first time since early December on Wednesday, having risen by more than two-thirds of a percentage point in the last week alone, while peripheral banking stocks have been pummelled.
Spot gold was last down 0.1 percent on the day at $1,658.01 an ounce by 1102 GMT, while U.S. June futures were down 0.3 percent at $1,655.60 an ounce.
Gold in euros was last down 0.5 percent at 1,261.62 euros an ounce, having touched two-week highs the previous day above 1,271.00 euros.
" We think gold will be in a range of $1,600 to around $1,690 or $1,700, which is a fairly wide range. But I think it will be difficult for gold to break out of that range," Standard Bank analyst Walter de Wet said.
" What we are seeing is growing interest to buy in the physical market below $1,630. Should we drop below $1,600, the demand will be pretty strong," he said.
The correlation between gold and the euro/dollar exchange rate strengthed on Wednesday to reach its most psitive since early January, above 65 percent, meaning the gold price is more likely to move in tandem with the single European currency than it was just six weeks ago.
Pressure on the euro from concerns about the debt crisis could translate into pressure on the gold price from euro-based investors that will seek higher dollar returns from their bullion positions.
" If there are credit concerns, we think gold will benefit but it might not be in dollars. If there are problems in Europe, we will see the euro weaken against the dollar ... What it would do in this environment where we've seen macro selling in gold over the last couple of weeks, is at least for now, it won't push gold higher, but at least it will make people think twice about liquidating long positions," de Wet said.
Adding to the chances of a safe-haven rally in gold was a powerful earthquake off the coast ofIndonesia, that prompted tsunami warnings for the entire Indian ocean.
Gold, the dollar and U.S. government debt had benefited from the latest bout of safe-haven interest from investors, with gold rallying more than 1 percent and U.S. Treasuries yields hitting 4-week lows in the previous session. USD/
The prospect of more monetary easing, which strengthens the outlook for higher inflation, also supported the sentiment in gold, regarded as a hedge against rising prices.
" If weak data continues, the Fed will have to intervene again to stimulate consumption," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.
" The next couple of years will be really challenging for global growth and central banks will be relied on as a crutch to get us through."
Italian one-year borrowing costs rose for the first time since November at a sale of short-dated paper on Wednesday, reflecting fresh doubts in the market about the more indebted euro zone nations and nerves ahead of a larger three-year sale on Thursday.
Hong Kong's gold exports to China rose 20 percent in February on the month as appetite for the precious metal remains strong in China, which is expected to overtake India as the world's top gold consumer this year.
Some suspected the number could include purchases from the public sector, as the market was largely quiet during a post-Lunar New Year holiday slump in February.
" On the public level, China's central bank will continue to accumulate gold, which is easier than liberalising their capital account and currency," said Friesen of SocGen, adding that building gold reserves would help China's push to turn the renminbi into a global currency.
Accommodative monetary policy will remain an incentive for private investors to buy into gold, he added.
Silver fell 0.5 percent to $31.61 an ounce, pushing the number of ounces of the metal needed to buy one ounce of gold up to 52.5 from 50 just one week ago, reflecting gold's relative outperformance.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif)
Gold edges down after 4-day winning run
SINGAPORE, April 11 (Reuters) - Gold edged lower on Wednesday, taking a pause after four days of gains on concerns about global growth and revived worries about the euro-zone debt crisis.
FUNDAMENTALS
* Spot gold inched down 0.2 percent to $1,656.51 an ounce by 0045 GMT, after rising more than 1 percent in the previous session.
* U.S. gold lost 0.2 percent to $1,657.90.
* U.S. Treasuries prices rose on Tuesday, pushing benchmark yields below 2 percent for the first time in over four weeks, as worries about the pace of global economic growth bolstered demand for safe-haven U.S. government debt.
* Worries about the euro-zone debt crisis lingered, with investors showing little appetite for Spanish and Italian government debt, pushing Spanish bond yields close to 6 percent.
* France's economy posted no growth in the first quarter and there are no signs of a strong recovery in activity in the coming months, according to a Bank of France survey on Tuesday.
* China's demand for gold remains robust. In February it imported 39,663 kg of gold from Hong Kong, up 20 percent from the previous month.
* Holdings of the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 1,286.167 tonnes by Tuesday, the lowest in two and a half weeks.
MARKET NEWS
* The selloff in U.S. stocks accelerated on Tuesday, with the Dow and S& P 500 falling for a fifth day, the pullback coming on the cusp of the earnings season.
* The safe-haven yen hovered at multi-week highs against many currencies on Wednesday, while the Australian dollar floundered as worries about global growth took another bite at risk sentiment.
DATA/EVENTS
0700 Germany Wholesale price index March
1100 U.S. Mortgage market index Weekly
1230 U.S. Import/Export prices March
1800 U.S. Fed Beige book
Closing Gold & Silver Report 4/10/2012
By Brandi BrundidgeApril 10, 2012GOLD’S SAFE-HAVEN APPEAL RETURNS OIL PRICES TO SLOW EUROPE
The Gold price continues to rise as the yellow metal’s safe-haven appeal is returning. Analysts at Barclays commented on how jewelers in India have reopened retail stores after a 20-day strike over a possible increase in taxes on non-branded Gold purchases. and how the stores being open ahead of the Hindu festival in April will affect Gold. Analysts wrote that the stores are reopening ahead of a Hindu festival in April “when demand for Gold is prominent, which should support prices in the near term.”
The eurozone is trying to plan for a strong economic recovery over the next few years, now that the Greek debt crisis seems to be contained. But a 10 percent hike in oil prices will slow annual growth by an estimated 0.2 percent for the next three years and will financially hurt European citizens. ING economist Carsten Brzeski said, “Consumers in the south are already squeezed as they lost wealth in real estate and stocks. A high oil price on top of this should again be one of the factors contributing to divergence rather than convergence in the eurozone.”
At 4 p.m. (CDT), the APMEX precious metals spot prices were:
- Gold - $1,661.30 – Up $16.90.
- Silver - $31.83 – Up $0.25.
Gold retreats from highs as Fed-led rally fizzles
* Impact of firmer U.S. easing expectations loses steam
* Dollar firms, appetite for 'risky' assets wanes
* China's Feb gold output rises 11 pct month-on-month (Updates prices, adds comment)
By Jan Harvey
LONDON, April 10 (Reuters) - Gold steadied on Tuesday, surrendering earlier gains as a rally sparked by expectations that a sluggish U.S. employment market could fuel further quantitative easing ran out of steam in the face of a firming dollar and easing appetite for risk.
Spot gold was up 0.2 percent at $1,643.46 an ounce at 1404 GMT, well below an earlier high of $1,654.10. U.S. gold futures for June delivery were up $1.10 at $1,645.00.
Ultra-loose U.S. monetary policy, which keeps real interest rates low, has been a key driver of higher bullion prices.
These fell to three-month lows a week ago after minutes from the Federal Reserve's last meeting suggested no extension to easing, and have struggled to rise significantly since then despite weakness in a key U.S. payrolls report on Friday.
" It is surprising that the market reaction to the Fed minutes, which was basically what they said a month ago, was greater than the reality of softer data," Macquarie analyst Hayden Atkins Said. " The market seems surprisingly weak to me."
The euro failed to hold onto early gains against the dollar and drifted lower on growing concerns about euro zone sovereign debt. Analysts said more rises in Spanish and Italian bond yields could weaken the single currency further.
Other assets seen as higher risk also retreated, with European shares falling more than 1 percent, and oil and base metals prices slipping. Soft Chinese import data raised concerns about commodities demand growth.
Gold prices have fallen in five of the last six weeks as so-called risk assets have struggled.
" It looks like we need bigger and better news to support gold right now," Saxo Bank vice president Ole Hansen said. " Traders have been wrongfooted on numerous occasions during the last two months on QE on/off talks.
" The non-farm payrolls and India ending its (jewellers') strike should have triggered a stronger bounce, but at this moment, where general softness in commodities has been seen, traders want to see the cash before jumping back into gold in a major way."
INDIAN DEMAND SLUGGISH
Gold demand in number one buyer India has struggled to recover after a three-week-long jewellers' strike ended. Daily gold sales in India in the last two days are down 80 percent from a year ago.
" For gold to turn a corner and build momentum, physical buying really needs to kick in," said UBS in a note on Tuesday. " The end of the jewellers' strike in India provides a good foundation... but prices need to be appropriate."
" Last week, Indian demand only became impressive when gold traded below $1,620," it added. " Appetite from India so far this week has been quite modest. Premiums in China have been above average of late. But in terms of volumes... gold turnover on the Shanghai Gold Exchange is not particularly exceptional."
China's gold output was 26.9 tonnes in February, up 11 percent from January, the Ministry of Industry and Information Technology said on Tuesday, after mining activity rebounded after the Lunar New Year holidays in January.
China is the world's biggest gold producer and had record output last year, although its domestic demand still outstrips supply by hundreds of tonnes a year.
Among other precious metals, silver rose 0.1 percent to $31.55 an ounce. The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, rose to its highest since early January on Tuesday.
Silver imports into India, the biggest consumer of the white metal, are likely to decline by up to 27 percent this year on expectations of volatile prices, the head of the country's biggest bullion importer, ScotiaMocatta's Sunil Kashyap, said on Monday.
Spot platinum was down 0.7 percent at $1,595.49 an ounce, while spot palladium was down 0.8 percent at $632.97 an ounce. (Editing by James Jukwey)
Morning Gold & Silver Market Report – 4/10/2012
By Ryan SchwimmerApril 10, 2012STRING OF BAD DATA BOOSTS DEMAND FOR METALS
Demand for Gold and Silver is pushing prices upward at the moment after missed estimates on economic data. Federal Reserve Chairman Ben Bernanke said the U.S. economy is “far from having fully recovered,” speaking in regard to the disappointing jobs report released Friday. In addition, China unexpectedly reported a trade surplus last month, furthering speculation that demand is slowing in that country.
Worries over the recent string of negative economic reports have not only affected U.S. stocks (which are on a four-day losing streak), but the data is also affecting European stocks. Peel Hunt’s Ian Williams said although the disappointing numbers may point to further easing from the Fed, the “risk-off mood that prevailed in the early days of the second quarter seems likely to persist for now.” Precious metals have been a source of safety and insurance in times of economic uncertainty.
Geopolitical tensions have increased between many Asian countries regarding North Korea’s planned rocket launch. South Korea, Russia, China, Japan and Western countries have all expressed concern about (or have outright condemned) this launch. While North Korea claims this launch is only to put a weather satellite into space, U.N. sanctions that are meant to keep the country from developing nuclear missiles will be breached.
At 8 a.m. (CDT), the APMEX precious metals spot prices were:
- Gold – $1,647.80 – Up $3.40.
- Silver – $31.70 – Up $0.12.
Casey Research, Jeff Clark: What Happens to Gold if We Enter a Recession or Depression?
Gold's enduring purchasing power is why we hold the metal. read more
Gold hits one-week high on easing hope
* Light selling seen in physical market India buys little
* Spot gold technical signals mixed
* Coming up: U.S. ICSC chain stores, weekly 0745 GMT
By Rujun Shen
SINGAPORE, April 10 (Reuters) - Gold rose to a one-week high above $1,650 an ounce on Tuesday, on course for its fourth straight session of gains, as hopes for more monetary easing by the Federal Reserve boosted sentiment.
It was the first trading day for a number of markets after
the Easter holiday, during which disappointing U.S. jobs data
breathed new life into hopes for more money-printing from the
central bank, which would benefit gold as an inflation hedge.
" The sentiment after the U.S. payrolls data may push gold
and silver prices higher this week, but technically those two
are still on a downtrend," said a Shanghai-based trader.
Spot gold fell more than 2 percent last week, extending a two-month losing streak as worries abut the euro zone debt crisis eased and a generally improving global economic recovery encouraged investors to look into higher-yielding assets, such as equities.
Bullion prices are up 5 percent so far this year, but lagging behind platinum's 16-percent rise and silver's 15-percent climb.
Spot gold rose 0.8 percent to a one-week high of $1,654.1 an ounce, before easing to $1,647.59 an ounce by 0738 GMT. It dropped to a near three-month low just above $1,610 last week. U.S. gold gained 0.3 percent to $1,649.
Technical signals for spot gold were mixed as the metal
hovered around the resistance at $1,648 level, said Reuters
market analyst Wang Tao.
In the physical market, buying was sluggish while light
selling was spotted as market participants took advantage of
recent price gains, dealers said.
" People don't have much confidence that prices would rally rapidly in the near term and are selling to lock some profit," said a Singapore-based dealer.
Investors will keep a close eye on more data and speeches from various Fed officials this week to look for cues on the health of the economy and the U.S. central bank's attitude to monetary easing.
" We still prefer gold despite an extended period of profit taking in 4Q11 and renewed volatility in 1Q12," said Goldman Sachs in a research note.
" Negative real interest rates, the prospect of further unconventional monetary policy in the US and Europe to confront uncertainties on the growth outlook, and heightened political tensions in the Middle East are all expected to underpin strong investment demand."
Gold extends gains on revived easing hope
SINGAPORE, April 10 (Reuters) - Gold edged up on Tuesday, extending gains from the previous session after disappointing U.S. jobs data breathed new life into hopes for more monetary stimulus by the Federal Reserve.
FUNDAMENTALS
* Spot gold inched up 0.2 percent to $1,643.69 an ounce by 0027 GMT. It rose as much as 1 percent to $1,648.5 an ounce in the previous session.
* U.S. gold was little changed at $1,645.20.
* Most major Wall Street firms expect anemic growth in the U.S. jobs market and a struggling economic recovery to force the Federal Reserve to undertake another massive round of monetary stimulus, a Reuters poll found on Monday.
* Investors are waiting for China trade data due later in the day to gauge the pace of the economic growth in the world's
second-largest economy, after Monday's data showed an unexpected spike in March inflation.
* U.S. employers hired far fewer workers in March than in previous months, keeping the door open for the Federal Reserve to provide more monetary support for a still sluggish economy.
* Silver imports into India, the biggest consumer of the white metal, are likely to decline up to 27 percent this year on expectations of volatile prices, despite import duty remaining unchanged, the head of the country's biggest bullion importer said on Monday.
MARKET NEWS
* The Dow and the S& P 500 extended losses to a fourth day on Monday, as investors took their cues from last week's disappointing jobs report, which raised fresh concerns about the U.S. economy's recovery.
* The dollar index held steady on Tuesday, after falling for two straight sessions as the weaker-than-expected U.S. employment data fueled expectations of more monetary easing.
DATA/EVENTS
0245 France Industrial output mm Mar
0745 U.S. ICSC chain stores yy Weekly
1950 Japan Bank lending yy
China Exports yy Mar
China Imports yy Mar
China Trade balance Mar
Closing Gold & Silver Market Report 4/9/2012
By Brandi BrundidgeApril 9, 2012CRUDE OIL PRICES DOWN SYRIA’S PEACE PLAN IS VOID
Gold held on to its gains for the day after unsatisfactory U.S. jobs data was released Friday. Many investors are predicting the data may lead to more U.S. economic stimulus measures. “In the next few months, the market will not only begin to price in the Fed’s sustained policy but will price in for further monetary action,” said James Dailey, portfolio manager of the TEAM Asset Strategy Fund.
Crude oil prices fell with a possible decline in U.S. fuel demand along with Iran’s decision to start talks on its nuclear programs again. “Friday’s poor jobs numbers are raising concerns with regard to future economic activity,” said Stephen Schork, president of the Schork Group in Villanova, Pa. “The jobs number is having an exaggerated impact because we were closed on Friday. When you add the upcoming Iran talks, you have the makings of a big move lower.”
In Syria, 35 people were reported dead the day before an army withdrawal is set to begin. The agreed-upon date to pull out troops was April 10, and a negotiating period was to begin 48 hours later. “April 10 has become void,” Turkish Deputy Foreign Minister Naci Koru said in Ankara, referring to the deadline. Russian Deputy Foreign Minister Gennady Gatilov said, “Attempts to force a solution on Syria from outside will lead only to an escalation of tension. Everything must follow from respect for Syria’s sovereignty, and violence must be stopped.”
At 4:16 p.m. (CDT), the APMEX precious metals spot prices were:
- Gold - $1,642.50 – Up $11.90.
- Silver - $31.62 – Down $0.18.
Morgan Stanley: 'We still like Gold' even after the metal fell to an 11-week low
LONDON (Commodity Online): “We still like gold” even after the metal fell last week to an 11-week low, said Morgan Stanley in a weekly commodity research note.
“We believe that the recent weakness in gold is a good entry point as some elements of the recent selling pressure appear to be at odds with the FOMC's still-dovish position,” Morgan Stanley added.
“As the Fed continues believing that long-run inflation will likely remain subdued, it has reaffirmed a commitment to accommodative monetary policy, as expressed by zero nominal rates, negative real rates and Operation Twist. These developments will likely support gold prices,” they continued.
“We believe that the weak March payroll report out last week likely underlines the Fed's cautious outlook,” they concluded.
Gold: ETP holdings and Asian market are the key factors in the near term
NEW YORK (Commodity Online): Gold prices have increasingly taken their cue from Fed statements and the possibility of further quantitative easing, thus as expectations have been scaled back, gold prices have been driven lower. Although a low interest rate environment remains positive, gold will need to find a firmer footing first. In turn, the two key factors to watch in the near term remain ETP holdings and end consumption in India and China.
Additional data released for March shows ETP holdings have been resilient despite the price volatility. Estimates for March now shows a modest increase of 2.4 tonnes for the full month and a regional deviation where net inflows in Europe offset net redemptions in the US. Q1 '12 recorded net inflows of 68 tonnes, compared with net redemptions of 51 tonnes in Q1 11 and net inflows of 80 tonnes in Q4 11. Flows for April have been lacklustre with a modest net outflow of less than a tonne. Should the longer-term sticky investor interest turn vastly negative, gold prices would be susceptible to deeper corrections.
Physical demand was weak in the absence of the Chinese market and the continued strike action in India last week. Thus gold has struggled to find a solid floor. Gold imports into India are expected to fall below 125 tonnes in Q1 12, compared with 283 tonnes in Q1 11. Over the past year, good physical demand has materialised upon dips below $1600/oz, when demand has emerged from India and China. The $1600/oz floor price has been the most supported
Despite recent weakness, outlook for gold remains bullish. A base may form ahead of the $1580/oz area. Once confirmed, prices may move back in range, initially targeting $1700/$1717 on the topside. Breaking above the latter would confirm a move toward the range highs near $1800/oz
Support: $1600/$1570 Resistance: $1643/$1690
Source: Barclays Capital Commodities Report