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Last Updated : 29 March 2012 at 02:05 IST
Goldman maintains its 12 month gold price forecast of $1,940/oz
NEW YORK (Commodity Online): Goldman Sachs is maintaining its outlook for gold prices, forecasting the yellow metal at $1,785 an ounce in three months, $1,840 in six months and $1,940 in 12 months, citing subdued U.S. economic growth and further quantitative easing by the Federal Reserve later this year.
“We acknowledge, however, that continued strong U.S. economic data poses growing risk to our forecast for rising gold prices,” they added.
“Net, we reiterate our view that at current price levels gold remains a compelling trade but not a long-term investment, and we continue to recommend a long position in December 2012 Comex gold futures,” Goldman concluded.
US Interest Rates “Should Support Gold”, Euro Optimism “Misleading” with Leaders “Kidding Themselves” that Crisis Has Passed
Wednesday 28 March 2012, 08:30 EDT
US Interest Rates “Should Support Gold”, Euro Optimism “Misleading” with Leaders “Kidding Themselves” that Crisis Has Passed
WHOLESALE MARKET gold prices dropped to below $1680 an ounce Wednesday morning – 1% down on their high for the week – after failing a day earlier to break the $1700 barrier.
Silver prices drifted below $32.50 per ounce – a 2.3% drop from Tuesday’s peak – while stocks and commodities traded sideways and US Treasuries ticked lower.
Oil prices eased slightly after the French energy minister said France “is favorable to the suggestion” that the US and UK could release strategic oil stocks in an effort to lower the spot price of oil.
US policymakers meantime should not be complacent that recent signs of recovery will continue, US Federal Reserve chairman Ben Bernanke said in a US television interview Tuesday.
“We haven’t quite yet got to the point where we can be completely confident that we’re on a track to full recovery,” Bernanke said.
“It’s far too early to declare victory.”
On Monday, Bernanke said that “continued accommodative policies” were needed to support the US labor market. Stock markets rallied immediately following those comments on Monday, as did gold prices.
“Our economists believe that the market has been too aggressive in pricing in Fed rate hikes in 2013, while the Fed is more likely to push the hikes out to 2014 as indicated by [Monday's] speech [by Bernanke],” says a note from Barclays Capital.
“We believe low interest rates and longer-term inflationary pressures should remain supportive for gold prices.”
Goldman Sachs meantime has reiterated its 12 month gold price forecast of $1940 per ounce. By contrast, precious metals consultancy CPM Group has said it does not expect gold to set new highs this year.
Here in Europe, the Eurozone crisis “is almost over”, Italian prime minister Mario Monti said Wednesday.
“Things have stabilized in Europe,” concedes Glenn Levine, Sydney-based senior economist at Moody’s Analytics, “and it’s in their interest to be optimistic but the muddle-through is still on… anyone who pretends to know if we are out of the woods yet is clearly kidding themselves or misleading their audience.”
Here in the UK, the economy shrank by more than previously through in the fourth quarter of last year, according to revised figures published Wednesday. Q4 GDP fell 0.3% from the previous quarter, compared to the previously reported 0.2% fall, according to the Office for National Statistics release.
By comparison, revised US GDP figures due out tomorrow are expected to confirm the American economy grew in Q4.
“Why is their recovery better than ours?” asked Bank of England Monetary Policy Committee member Adam Posen in a speech of that title on Tuesday.
Posen, who has voted for more quantitative easing at fifteen of the last eighteen MPC meetings, went on to cite differences in government fiscal tightening as one factor that explains “a sizeable share of the growth differential between the US and UK.”
Over in India, finance minister Pranab Mukherjee said Tuesday he will not reverse the recent rise in import duties. Many Indian gold dealers have closed in protest and remain on strike.
“Until the Indian jewelers reopen their shops, Indian gold demand will remain weak,” says a note from HSBC.
“The dip in Indian demand may be partly offset by better Chinese physical demand as Shanghai premiums [over Spot Gold] remain high.”
In China meantime, after India the world’s second-largest gold consumer, stock markets saw their biggest falls in four months Wednesday, Bloomberg Businessweek reports.
The falls came after the country’s largest copper producer, Jiangxi Copper, reported an 18% drop in earnings and investment bank Societe Generale said consensus estimates for Chinese companies were “far too optimistic”.
“Investors had expected earnings to be weak but they are still below expectations,” says Larry Wan, head of investment at Union Life Asset Management in Beijing, which manages over $2 billion worth of assets.
“Moreover, shares have already risen quite a bit this year on monetary easing expectations.”
March sales by the US Mint of gold American Eagle bullion coins – produced explicitly for gold investment purposes – are already more than double the total for February. However, the nearly 1.4 tonnes sold represents a 40% drop on the March 2011 figure, and looks set to be the lowest March total since 2007.
Sales of silver bullion American Eagles meantime have breached the 10 million ounce mark, equivalent to 311 tonnes. By comparison, the US Mint sold 12.4 million ounces in the first three months of 2011.
Ben Traynor
BullionVault
Gold gives up early gains tracks equities lower
* Gold hits a high above $1,664, then slips
* Coming Up: U.S. weekly jobless claims 1230 GMT
By Lewa Pardomuan
SINGAPORE, March 29 (Reuters) - Gold fell on Thursday after
a rebound in the U.S. dollar erased early gains, while weaker
equities also prompted investors to sell bullion to cover losses
while waiting for more clues on the health of the U.S. economy.
Traders said the upcoming end-of-quarter was dampening
trade, while the release of U.S. weekly jobless claims later
could set the tone for the dollar. Economists in a Reuters
survey forecast a total of 350,000 new filings compared with
348,000 in the prior week.
Gold hit a high of $1,664.79 an ounce before slipping
to $1,658.70 by 0607 GMT, down $4.42. Gold fell 1.3 percent on
Wednesday after data showing a smaller-than-expected rise in new
U.S. manufactured goods orders spurred selling in commodities.
" There's end-quarter selling, some profit taking, and the
dollar is a bit strong. People are only buying a small amount of
physical gold because I think the global economy is still
struggling," said Ronald Leung, director of Lee Cheong Gold
Dealers in Hong Kong.
" It's going to be range trading for a little while,
watching currencies and their direction."
Gold hit a two-week high near $1,700 an ounce on Tuesday on
expectations of monetary easing in the United States after
Federal Reserve chairman Ben Bernanke cautioned it is too soon
to declare victory in the U.S. recovery
U.S. gold for April delivery hardly moved at
$1,658.80 an ounce after rising as high as $1,664.50 an ounce.
The dollar index steadied at 79.079 after falling to
a near one-month low of 78.770 on Tuesday, while the euro
was little changed at $1.3325. Investors will closely watch the
outcome of a Italian bond sale as Rome aims to sell up to 8.25
billion euros of debt.
Bullion raced to a record of around $1,920 last September on
fears the euro debt crisis could stall global growth.
In equities, Asian shares eased for a second day in a row as
investors limited their risk exposures on concerns about growth
prospects in the world's two largest economies, the United
States and China.
Wednesday's data showed new orders for U.S. durables
increased only modestly in February, below analysts' forecasts,
while a gauge of future business investment also fell short of
expectations, raising the prospect that economic growth in the
first quarter could be lacklustre.
" It's really quiet, and I think it's related to the
end-quarter period. People are reluctant to do anything. Both
sides are quiet, and that's why we've also seen some liquidation
in gold," said a dealer in Hong Kong.
Holdings of the largest gold-backed exchange-traded-fund
(ETF), New York's SPDR Gold Trust and that of the largest
silver-backed ETF, New York's iShares Silver Trust were
unchanged after edging down 0.16 percent to 1,286.62 tonnes by
Tuesday.
Gold bounces on bargain hunting, U.S. dollar watched
SINGAPORE, March 29 (Reuters) - Gold regained some strength
on Thursday as bargain hunters resurfaced after prices slipped
more than 1 percent in the previous session, but gains may be
capped by a rebound in the U.S. dollar against other currencies.
FUNDAMENTALS
* Spot gold hardly changed at $1,662.71 an ounce by
0040 GMT, having hit a high of $1,664.79. Gold had fallen 1.3
percent on Wednesday after data showing a smaller-than-expected
rise in new U.S. manufactured goods orders spurred selling in
the yellow metal and other commodities.
* U.S. gold rose $4.30 to $1,662.20 an ounce.
* New orders for long-lasting U.S. factory goods increased
only modestly in February, supporting the view that economic
growth in the first quarter could be lackluster.
MARKET NEWS
* Early in the week, the dollar took a hammering after
Bernanke gave a cautious outlook on the economy that kept alive
expectations of further stimulus. The dollar index fell
to a near one-month low of 78.770 on Tuesday, but has since
recovered to 79.158.
* Asian shares eased for a second day in a row on Thursday,
as investors limited their risk exposures on concerns about
growth prospects in the world's two largest economies, the
United States and China.
* U.S. crude futures steadied on Thursday, trading little
changed after a 1.8 percent drop the day before due to a big
rise in U.S. crude inventories and talk of a release of U.S. and
some European strategic reserves.
DATA/EVENTS (GMT)
0755 - GERMANY MARCH UNEMPLOYMENT DATA
0830 - UK CONSUMER CREDIT FOR FEBRUARY
0900 - EURO ZONE BUSINESS CLIMATE FOR MARCH
0900 - EURO ZONE ECONOMIC SENTIMENT FOR MARCH
1230 - U.S. FINAL Q4 GDP
1230 - U.S. WEEKLY JOBLESS CLAIMS
Gold retreats from 2-week high after US orders data
* Gold's decline leads to 4-day low
* Weaker-than-forecast U.S. durable goods orders sparks risk off selling
* Commodities, equities under pressure as euro slides
By Jan Harvey and Carole Vaporean
NEW YORK/LONDON, March 28 (Reuters) - Gold prices fell on W ednesday, unwinding the previous day's advance to a two-week peak, after data showing weaker-than-expected U.S. manufactured goods orders and cautious comments from an ECB official spurred a flurry of selling.
Bullion lost ground with base metals, crude oil, equities and the euro after the report showing a moderate, though disappointing, gain in February U.S. durable goods orders ignited selling.
" There's some dollar strength, it's also a risk-off kind of a day. We're seeing a lot of commodities down and stocks are down," said Rick Bensignor, chief market strategist at Merlin Securities in New York.
Spot gold was down 1.3 percent at $1,658.30 an ounce by 2:50 p.m. EDT (1850 GMT), after hitting its lowest since March 23 at $1,654.50 an ounce. U.S. gold futures for April delivery slipped $27 to end at $1,657.90, a 1.6 percent fall.
On Tuesday, spot prices rose as high as $1,696.20 after the Federal Reserve suggested a continuation of easy monetary policy may be necessary to support growth and bring down unemployment.
Federal Reserve Chairman Ben Bernanke said on Tuesday it is too soon to declare victory in the U.S. economic recovery, warning against complacency in policymaking as the outlook brightens.
But gold's rally proved short-lived.
Merlin Securities' Bensignor cited the worse-than-expected durable goods orders report and Bernanke's comments for gold's reversal.
" Bernanke's speech is one of those things that has two sides. You could say lousy economic numbers are going to make him more likely to run stimulus. At the same time, lousy economic numbers are just that, and the market is reacting to them," the analyst said.
From a technical view, momentum sparked by expectations for further U.S. monetary easing faded after prices failed to breach key resistance at $1,700 an ounce.
" Notice how $1,700/1,690 held sturdy," VTB Capital analyst Andrey Kryuchenkov said. " (This is) not a massive pullback, $1,640 will certainly hold for now, but a tad more is possible."
Also pressuring gold were the dollar's gains on the euro as traders focused on comments from an ECB official warning about resolving the debt crisis.
European Central Bank Governing Council member Jens Weidmann's cautious euro zone comments came before a meeting of European Union economic and financial affairs ministers in Copenhagen on Friday and Saturday.
Nonetheless, expectations for a continuation of super-loose monetary policy and ongoing official sector buying is supporting the medium-term outlook for gold.
" I have a positive view of gold from these levels," BNP Paribas analyst Anne-Laure Tremblay said. " Fundamentals are still supportive and we assume some form of monetary policy accommodation to take place in the United States by mid-year."
PRICES STRUGGLE
Goldman Sachs said in a research note that, as gold prices are closely linked to U.S. real interest rates, they may have been suffering from expectations for stronger growth.
" The gold market may have been expecting that real rates would soon be rising along with improving economic growth, leading to a sharp decline in net speculative length in gold futures," it said.
" As we look forward, our U.S. economists forecast subdued growth and further easing by the Fed in 2012, which should push the market's expectations of real rates back down near zero basis points and gold prices back to our six-month forecast of $1,840 an ounce," it added.
Physical gold demand has come under pressure this week from an ongoing strike among jewellers in India, the world's largest bullion consumer, who are protesting against a hike in import duty for bullion.
India's Finance Minister said on Tuesday the country will not cut import duty on gold, which it doubled to 4 percent this month, although it is considering jewellers' demands for the removal of a 0.3 percent excise duty on unbranded jewellery.
By late trade, silver was down 1.8 percent at $31.93 an ounce, spot platinum fell 1.2 percent to $1,627.38 an ounce, and spot palladium lost 1.9 percent at $640.38 an ounce.
Closing Gold & Silver Market Report – 3/28/2012
By Timothy OakesMarch 28, 2012DURABLE GOODS REPORT HINTS AT GROWING ECONOMY
Gold prices moved below $1,660 an ounce today, as profit-taking was accelerated late in the session by a COMEX options expiration. The failure of Gold to breach $1,700 is being seen as a key resistance level. A smaller-than-expected increase in U.S. manufactured goods orders added to downward pressures as the dollar moved to session highs versus the euro. “The Fed comments have given much-needed stimulus to an otherwise lackluster, range-bound Gold market,” Richcomm Global Services analyst Pradeep Unni said. “Resistance at $1,694 (or) $1,700 is formidable, but in the coming sessions, we (could) see that being scythed very convincingly.” However, the overall long-term projection remains strong. Goldman Sachs said, “As we look forward, our U.S. economists forecast subdued growth and further easing by the Fed in 2012, which should push the market’s expectations of real rates back down near zero basis points, and Gold prices back to our six-month forecast of $1,840 an ounce.”
February’s durable goods orders were up 2.2 percent, a strong move from its drop in January. The report would indicate that the economy is growing at a moderate 2 percent pace. “The normal wild swings in big-ticket purchases continue, but the trend is still up, and that is all that matters,” said Joel Naroff of Naroff Economic Advisors. Economists will be watching to see if higher prices for gasoline and issues with Europe and China will hurt U.S. exports. Although those results were led by transportation and defense data, all divisions that report to the Commerce Department reported increases.
Israel continues to play the role of wild card in the Middle East, as tensions mount over whether Israel will conduct an air strike and whether that could, in fact, have the opposite effect intended with sanctions. That air strike, if ordered, could actually influence Iran to build nuclear weapons to protect itself. Western leaders are increasingly wary of this result. Sweden and Finland’s foreign ministers, Carl Bildt and Erkki Tuomioja respectively, wrote in an editorial piece to The New York Times, “It is difficult to see a single action more likely to drive Iran into taking the final decision to acquire nuclear weapons than an attack on the country. … And once such a decision was made, it would only be a matter of time before a nuclear-armed Iran became a reality.”
At 4:14 p.m. (CDT), the APMEX precious metals spot prices were:
- Gold - $1,663.00 – Down $23.40.
- Silver - $32.05 – Down $0.62.
eport 3/28/2012
By Brandi BrundidgeMarch 28, 2012AMERICANS SEE GOLD AS BEST INVESTMENT, SURVEY SHOWS
According to Goldman Sachs, Gold’s price is too low compared to real interest rates. Gold is an asset that protects an investor against the possibility of the unknown, such as a Black Swan event. Recently, Matthew Lynn of Strategy Economics commented on the buying power by central banks in regards to Gold. Lynn said, “By holding more Gold, central banks are insuring themselves against their own profligacy. They print money. The price of Gold goes up. And if they hold a lot of the stuff in their vaults, they are the big winners from the rise in price.” Malcom Norris of Solomon Gold predicted the precious metal could even reach $2,000 per ounce.
An interesting survey conducted by CNBC shows that Americans feel that Gold is the best investmentat this time. Also, the poll confirmed that 65 percent of Americans believe it is better to own a home rather than renting. The purpose of the survey is to see how the populace feels about the economy’s improvement.
The increase in crude oil prices has left former General Electric CEO Jack Welch distraught regarding the condition of the U.S. economic recovery. “It’s not taking off. We’re sort of relatively strong but not booming,” Welch said in a CNBC interview. “I am normally to one extreme or another, and I’m a little shaken about not knowing where this is going.” He said he has a lot of uncertainty about the economic recovery. The rising gasoline costs and tax uncertainty are key components to his opinion. “Gasoline prices — you can't have this jump and not think that it affects the pocketbook,” Welch said. This is already starting to affect consumer confidence.
At noon (CDT), the APMEX precious metals spot prices were:
- Gold – $1,665.80– Down $20.60.
- Silver - $32.14 – Down $0.53.
 | Reuters - 5 minutes ago SINGAPORE (Reuters) - Spot gold prices were little changed on Wednesday, after buckling under a stronger dollar in the previous session as US data tempered concerns of more stimulus from the Federal Reserve. |
Gold drops more in late trade after options expiry
* Prices fall $1,680 in late trade on weaker euro
* March volume close to September 2011 levels
* Support seen at $1,660 - trader (New throughout, updates prices, market activity)
By Josephine Mason and Jan Harvey
NEW YORK/LONDON March 27 (Reuters) - Spot gold prices fell off two-week highs on Tuesday after failing to pierce the $1,700 per ounce mark and as bullion tracked a weaker euro.
Losses accelerated in late New York trade after the Comex March options contracts expired.
Interest ahead of the options expiry had pushed gold just $4 shy of key resistance, but prices weakened to an intraday low below $1,680 per ounce in late afternoon as the dollar strengthened against the euro.
The slide erased the previous day's rally, falling below the 100- and 200-day moving averages they had breached on Monday. That rally came after Federal Reserve chairman Ben Benanke signaled U.S. interest rates would stay low. That would maintain the low opportunity cost of holding bullion.
Spot gold was at $1,679.44 an ounce at 5:21 p.m. EDT (2221 GMT), down $12.3 or 0.73 percent, after hitting a two-week peak at $1,696.20 earlier in the day.
U.S. gold futures for April delivery settled at $1,684.9 per ounce, down slightly from Monday's settlement of $1,685.6.
With most call and put options concentrated around $1,700 an ounce, expiry passed with no buying materializing to provide any upside momentum.
" Most of the open interest was at $1,700. It tried to force its way up there," said a Comex trader.
There were spikes in volume during the day, the largest taking place at around 1:15 p.m. EDT (1755 GMT), as a broker unwound his options conversions ahead of the contract expiry, the trader said.
Technical factors also held prices back after the market failed to settle above $1,690 per ounce, the trader said.
" A lot of it was also technical. If it had settled above $1,690, it would have been very bullish," he said.
The conditions are in place for it to break above the $1,700 mark, although there may be further pressure in the near term, he said, adding that bullion will find support at $1,660 per ounce.
" Once it's through there ($1,700), it will get up to $1,730, $1,750," he said. Gold has not been at those levels since the end of February.
A second trader said he expects a volatile market as traders square their books ahead of the end of the first quarter. Prices are up 7 percent since the start of the year.
Daily volume was average, although activity levels so far this month have been higher than the previous months. With three days until the end of the month, volume is already at 3.13 million lots, close to exceeding February's level of 3.2 million lots.
That would be the highest monthly volume since September, when prices hit the record of $1,920 per oz before plunging almost $400 by the end of the month.
On Tuesday, gold surrendered early gains as the euro lost ground against the dollar after a two-day rally. The precious metal tends to benefit from weakness in the dollar, which makes it cheaper for holders of other currencies.
Monday's rally was triggered when Bernanke said the U.S. economy needed to grow more quickly to cut the unemployment rate. While he did not directly indicate the Fed was set to begin another round of bond purchases, he said a continuation of accommodative policies was needed to support faster growth.
Appetite for assets seen as higher risk mostly held firm after strengthening the previous day. World stocks touched an eight-month high on the back of Bernanke's comments and on expectations the euro zone would agree to a bigger crisis firewall, while oil held above $125 a barrel.
" Our economists believe that the market has been too aggressive in pricing in Fed rate hikes in 2013, while the Fed is more likely to push the hikes out to 2014 as indicated by the speech," said Barclays Capital in a note.
" We believe low interest rates and longer-term inflationary pressures should remain supportive for gold prices."
ETFs RECORD INFLOWS
Gold exchange-traded funds, which issue securities backed by physical metal, reported inflows on Monday. Holdings of the largest, New York's SPDR Gold Trust, increased by around 6 tonnes, reversing some of the previous week's 10 tonne drop.
Demand for the yellow metal in major consumer India remained subdued, however, as a strike continued among jewelers in protest at a government import levy.
" There is valid concern over Indian gold demand, which may decline on the back of higher domestic taxes on the gold industry," said Standard Bank in a note. " Indian buying has been notably weak as the strike by jewelers drags on for the 11th day today."
Silver was down 0.88 percent at $32.54 an ounce. Spot platinum was up 0.32 percent at $1,648 an ounce, while spot palladium edged down 1.07 percent to $656.
Platinum maintained an historically unusual discount to gold as buyers worried about demand for the white metal, which is chiefly used in autocatalysts.
Platinum prices are up more than 18 percent this year after a poor performance in 2011 but have struggled to maintain traction as worries persist over growth in the euro zone, a major market for platinum-heavy diesel autocatalysts. (editing by Jane Baird and David Gregorio)
Closing Gold & Silver Market Report – 3/27/2012
By Peter LaTonaMarch 27, 2012CONSUMER CONFIDENCE DROPS, INFLATION CONCERNS RISE
A report released today from The Conference Board industry group showed consumer confidence dropping and inflation expectations jumping to the highest level since May 2011. “The biggest moving part in that scenario has been gasoline prices. So, that is certainly on consumer radar screens,” said Carl J. Riccadonna of Deutsche Bank Securities in New York. Scott Brown, chief economist at Raymond James, said, “I don’t think this is enough to throw us into a recession, but we really haven’t seen the full impact yet.”
The Case-Shiller home price index fell again in January for the fifth month in a row. This index, combining data from 20 cities, dropped 0.8 percent in the first month of the year. “Despite some positive economic signs, home prices continue to drop,” said David Blitzer, chairman of the index committee. Over the past 12 months, prices fell 3.8 percent. A recovering housing market is considered a key component of an economic recovery, but for now that segment is being hampered by sluggish job creation.
Chief Executive Bill Gross of PIMCO, the world’s largest bond fund, explained in a recent letter how to make money in a “delevering world.” In the phrase “levering world,” Gross means that borrowing, debt and risk/reward premiums go up. Gross said the levering world is giving way to a delevering world, which is a world in which bills are paid off, debt is reduced, and the risk/reward premium declines. In a levering world, financial assets are king, but in a delevering world, real assets take center stage. Real assets are Gold and Silver, commodities, land, buildings and a host of other investments, which allow an investor the potential for the most return with the least amount of risk. Interest rates cannot get any lower, and the long-bond rally is coming to an end. We are entering a delevering world.
At 4:02 p.m. (CDT), the APMEX precious metals spot prices were:
- Gold - $1,681.40 – Down $5.70.
- Silver - $32.62 – Down $0.18.
* Gold at 2-week peak after biggest daily rise since Jan. 25
* Fed boosts expectations real rates will stay low
* Euro edges higher, stocks maintain upward move (Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, March 27 (Reuters) - Gold prices hit two-week highs above $1,690 an ounce on Tuesday after posting their biggest one-day rise since late January in the previous session, boosted by expectations that U.S. interest rates will stay lower for longer and gains in the euro.
The metal held above the 100- and 200-day moving averages it broke through on Monday after the U.S. Federal Reserve's signal that it would keep interest rates near rock-bottom levels reassured buyers that the opportunity cost of holding bullion would stay low.
Spot gold was up 0.1 percent at $1,693.50 an ounce at 0935 GMT. Earlier it hit a two-week peak at $1,696.20.
Fed Chairman Ben Bernanke said on Monday that the economy needed to grow more quickly to cut the unemployment rate. While he did not directly indicate that the Fed was set to begin another round of bond purchases, he said a continuation of accommodative policies was needed to support faster growth.
" The Bernanke comments suggesting the possibility of further quantitative easing of monetary policy... pushed the U.S. dollar lower and financial markets in general upwards, and so also gold," said Commerzbank analyst Carsten Fritsch.
" The prospect of further liquidity injections should put pressure on the U.S. dollar, and the prospect of continued negative real interest rates should also keep gold supported."
The euro hit its highest in more than three weeks after Bernanke's comments, helping lift gold, and has since extended gains to a one-month peak.
Appetite for assets seen as higher risk, which largely strengthened on Monday, also held firm, with European shares climbing and oil and base metals prices rising.
U.S. gold futures for April delivery were up $7.70 an ounce at $1,693.30. Options expiry is due on COMEX later in the day, with most call and put options concentrated around the $1,700 an ounce level.
ETFs RECORD INFLOWS
Gold exchange-traded funds, which issue securities backed by physical metal, reported inflows on Monday. Holdings of the largest, New York's SPDR Gold Trust, increased by around 6 tonnes, reversing some of the previous week's 10-tonne drop.
Demand for the yellow metal in major consumer India remained subdued, however, as a strike among jewellers in protest at a government import levy continued.
Silver was up 0.9 percent at $33.11 an ounce. Spot platinum was up 1.2 percent at $1,662.70 an ounce, while spot palladium was up 0.9 percent at $669.20 an ounce.
Platinum maintained its historically unusual discount to gold, which briefly reversed earlier this month, as buyers worried about demand for the white metal, which is chiefly used in autocatalysts.
Platinum prices are up more than 18 percent this year after a poor performance in 2011, but have struggled to maintain traction as worries persist over growth in the euro zone, a key market for platinum-heavy diesel autocatalysts.
" We remain of the view that the platinum market needs some production curtailments to improve the fundamentals over the next few years," said Deutsche Bank in a note.
" The price recovery in the face of 'accidental' supply closures serves as a timely reminder of how susceptible the platinum industry is to disruptions," it added.
" However, with the end of the Impala strike (earlier this year) and the reduced incidences of Section 54 stoppages, supply should recover, and the market is likely to end the year in another modest surplus - 105,000 ounces - in our assessment." (Additional reporting by Michelle Martin editing by Jason Neely)
Morning Gold & Silver Market Report – 3/27/2012
By Ryan SchwimmerMarch 27, 2012FED CHAIRMAN’S COMMENTS SUPPORTING GOLD, HAMPERING STOCKS
Gold is gaining some ground this morning, continuing to be boosted by yesterday’s comments by Federal Reserve Chairman Ben Bernanke. Bayram Dincer of LGT Capital Management said, “The possibility of accommodative monetary policy if certain conditions, such as employment, do not improve is a favorable environment for Gold. More dollar liquidity from the Fed would decrease the value of the dollar, and in this case Gold is considered as a valuable currency substitute.”
U.S. stock futures are also feeling the effects of Bernanke’s statements, and are relatively flat. Typically, quantitative easing (QE) has been supportive for stocks, due to the show of support from the Fed, though QE also has been supportive for Gold due to the inflationary pressures it brings. Ilya Spivak of FXCM said that the door is open “for a correction (in stocks) as yesterday’s moves begin to appear overdone upon closer examination.”
Though the geopolitical issues around the world today seem to have minimal effect on the markets currently, these issues historically have been supportive for the safe-haven appeal of Gold. Reports out of Syria suggest that the country has accepted a cease-fire drawn up by U.N. and Arab League special envoy Kofi Annan. However, Syrian troops have crossed the Lebanese border to continue fighting with rebels who had escaped the fighting.
At 8:06 a.m. (CDT), the APMEX precious metals spot prices were:
- Gold - $1,695.40 – Up $8.10.
- Silver - $33.11 – Up $0.32.
Fed's Bernanke Says " Continued" Printing " Supports Production And Demand"
QE-n makes appearance, " continued" printing, according to Bernanke, can improve job market. Read More
Gold bulls need move over $1,730/oz to reignite rally
NEW YORK (Commodity Online): Last week's break and rebound was a test of the 61.8% retracement of gold's move from $1,523.90 to $1,792.70 an ounce, said Walter Zimmerman, Jr., chief technical analyst at United ICAP.
For the rebound to have legs, bulls need gold to close over $1,730, he says.
“ If that cannot happen, then gold is still in a neutral pattern, rather than forming a bottom,” Zimmerman concluded.
SINGAPORE, March 27 (Reuters) - Gold edged down on Tuesday, with speculators booking profits after prices jumped more than 1 percent in the previous session when the Federal Reserve signaled supportive monetary policy could continue in the United States.
FUNDAMENTALS
* Spot gold had fallen $2.60 an ounce to $1,689.14 by 0023 GMT.
* Bullion rose to $1,693.39 on Monday, its strongest since March 13, after Fed Chairman Ben Bernanke Bernanke said the U.S. economy needed to grow more quickly to further reduce unemployment. That fuelled bullion buying as a hedge against long-term inflation and economic uncertainty.
* U.S. gold added $3.60 an ounce to $1,689.20 an ounce.
MARKET NEWS
* Japan's Nikkei average climbed more than 1 percent on Tuesday, following overnight gains on Wall Street after Bernanke's comments.
* The euro advanced against the dollar and yen for a second straight day on Monday.
DATA/EVENTS (GMT)
0600 - GERMAN CONSUMER SENTIMENT FOR APRIL
1145 - ICSC/GOLDMAN SACHS WEEKLY U.S. CHAIN STORE SALES
1255 - REDBOOK WEEKLY U.S. RETAIL SALES
1300 - U.S. S& P/CASE-SHILLER HOME PRICE INDEX FOR JANUARY
1400 - U.S. CONSUMER CONFIDENCE FOR MARCH
Closing Gold & Silver Market Report – 3/26/2012
By Timothy OakesMarch 26, 2012NOTED INVESTOR EMBRACING GOLD AGAIN ON FED CHAIRMAN’S COMMENTS
Precious metals prices have been on the rise throughout afternoon trading on the heels of the potential for further monetary easing that Federal Reserve Chairman Ben Bernanke spoke of earlier today. That news led noted investor Dennis Gartman change his previously held position and re-enter the American Gold market. He said, “Sometimes you get lucky. … Dr. Bernanke got me a little lucky this morning. … If you’d asked people last week, you’d think QE3 was off the table and broken on the floor.” However, Gartman said he believes the re-introduction of QE3 would help send Gold prices higher.
Economic hope remains on the horizon, though, as the call for continuing monetary policy stimulus and European symmetry on the eurozone’s debt crises have created some hope for stability. The hopes are bolstered especially by the news that German Chancellor Angela Merkel has softened her stance and looks to be supporting the temporary and permanent euro-area rescue funds to help contain European debt concerns. Chief market strategist Stephen Wood said, “Bernanke made it clear that while the Fed is not going to be revving the engine anytime soon, they are going to keep their foot on the gas. … At the same time, the Europeans appear to be more serious about addressing risks. They’ve addressed shorter-term liquidity, but solvency remains an issue.”
Middle Eastern news continues to simmer on the back burner. Syria has responded to U.N. special envoy Kofi Annan. The proposal is backed by Western powers, though no deadline is set, the bloodshed will not drag on indefinitely. The economic sanctions being imposed on Iran starting to effect Iranian citizens in a negative way, with inflation a huge concern. Ayatollah Ali Khamenei’s plan calls for more domestic production to offset those inflation fears. He said, “If we manage to boost our domestic production, a large part of enemies’ efforts will no doubt be unsuccessful. … If we lift domestic production, we will solve the issues of inflation and unemployment, and our economy will be reinforced.”
At 4:15 p.m. (CDT), the APMEX precious metals spot prices were:
- Gold - $1,690.70 – Up $26.80.
- Silver - $32.87 – Up $0.55.
Mid-Day Gold & Silver Market Report 3/26/2012
By Brandi BrundidgeMarch 26, 2012U.S. ECONOMY DRAWING MIXED VIEWS
Gold’s price is up more than 1 percent today thanks to a stronger euro and comments from Federal Reserve Chairman Ben Bernanke, who is calling for faster U.S. economic growth. “I think it (Gold’s price rose) on the back of Bernanke’s comments, which people have taken to mean that further funding might be required,” said Simon Weeks, head of precious metals at Scotia Mocatta. “I think people have taken that to mean that Gold is still going to be in demand.”
Although many are seeing positive signs of a slow U.S. recovery, Steve Forbes of Forbes Media said he believes the progress isn’t as dynamic as it should be and claims there’s a lot of skepticism with the time it is taking. On the other hand, former Treasury Secretary Larry Summers has a bit more confidence in the U.S. “As winter turned to spring in 2010 and 2011, many observers thought they detected evidence that the economy had decisively turned, only to be disappointed a few months later. Several considerations suggest that this time may be different. Employment growth has been running well ahead of population growth for some time now,” Summers said.
The strikes in India seem to have paid off for jewelers and consumers. India decided to cut the import tax on Gold by 7.5 percent, supposedly to assist the troubled industry. However, the duty for Silver imports will remain unchanged. Nick Holland of Gold Fields commented on China and India, which together account for 42 percent of the demand for Gold. “Those are two economies that are likely to grow at a significant pace, certainly relative to the West,” Holland said. “They have a strong affinity for Gold, and they also have an increasing number of the population who are being urbanized. Of the extra income they get, some will find its way into Gold.”
At noon (CDT), the APMEX precious metals spot prices were:
- Gold - $1,685.20 – Up $21.30.
- Silver - $32.83 – Up $0.51.
Morning Gold & Silver Market Report – 3/26/2012
By Peter LaTonaMarch 26, 2012MARKETS CLIMB AFTER FED CHAIRMAN’S REMARKS
Speaking this morning in Washington, D.C., Federal Reserve Chairman Ben Bernanke expressedconcerns that the recent trend in job growth can be sustained. The primary factor behind the weak job market is weak demand and not structural, such as the lack of skills in the workforce. Bernanke said recent gains might only be related to the large layoffs during the recessions. Going forward, increases are going to have to come from economic growth, which is a bigger challenge. The Gold and Silver markets, as well as the equity markets, bounced up on the news. Analysts see this as an indication that interest rates will remain low for the foreseeable future and the likelihood of a third round of quantitative easing is on the rise.
Gold prices hit a one-month high this morning after Bernanke characterized the labor market as “far from normal.” Gold prices were further fueled by a stronger euro and more speculation that any negative relapse in U.S. economic data would trigger the Fed to implement QE3.
Iranian President Mahmoud Ahmadinejad said Monday the United States is no longer in a position todictate policy to the rest of the world. He also cautioned that there is a growing instability between Western nations and Pakistan. Ahmadinejad, speaking in Afghanistan, called for the immediate withdrawal of U.S. and NATO troops. “It is better to respect nations than to scare them and colonize them. The time of imperialism is long gone. Those who do not learn from the mistakes of history will be punished,” Ahmadinejad said.
At 8 a.m. (CDT), the APMEX precious metals spot prices were:
- Gold - $1,681.70 – Up $17.80.
- Silver - $32.69 – Up $0.37.
Gold up 1 pct as Fed comments support easing hopes
* Bernanke comments taken to support QE expectations
* Euro climbs vs dollar, lifting gold to 2-week high
* Speculators cut gold long bets for third week
By Jan Harvey
LONDON, March 26 (Reuters) - Gold prices rose 1 percent on Monday after comments from U.S. Federal Reserve Chairman Ben Bernanke that faster growth will be needed to boost employment supported expectations that further quantitative easing measures may be necessary.
Spot gold was up 1 percent at $1,678.86 at 1458 GMT. It earlier hit a two-week high of $1,683.79 after Federal Reserve Chairman Ben Bernanke said the U.S. economy needed to grow more quickly if it is to produce enough jobs to bring down the unemployment rate.
" I think it (rose) on the back of Bernanke's comments, which people have taken to mean that further funding might be required," Simon Weeks, head of precious metals at Scotia Mocatta, said. " I think people have taken that to mean that gold is still going to be in demand."
U.S. gold futures for April delivery were up $18.70 an ounce at $1,681.10.
The dollar slid against the euro and the Swiss franc after remarks by Federal Reserve Chairman Ben Bernanke spurred views that the bank could yet flood the market in another round of quantitative easing.
Sentiment towards the euro remains cautious, however, as investors worried about the troubles facing the euro zone economy.
While concerns over the bloc's debt crisis were a key factor driving gold to record highs last year, it has since re-established its usual inverse relationship with the dollar as the U.S. unit takes precedence as investors' haven of choice.
" If the dollar is going to strengthen over the next couple of days, gold should see more downward pressure," said Standard Bank analyst Walter de Wet.
" (But) looking past the next couple of weeks, I think the rally is not over," he added. " In real terms interest rates remain negative, and we expect them to remain negative for at least another two years."
SPECULATORS RETREAT
Data from the U.S. Commodity Futures Trading Commission on Friday showed money managers in gold futures and options cut their bullish bets for a third straight week to the weakest level in two months.
" Declining a hefty 3.1 million ounces, the Comex gold book now sits at a relatively modest 17.58 million ounces, bringing positioning to its lowest level since the week of Jan. 10 and some 53.1 percent of the all-time high," said UBS in a note.
" In just three weeks, spec net longs have collapsed by 10 million ounces. So in theory, from a positioning perspective, gold's spec baggage looks relatively light... which suggests some upside price direction is possible."
Volume data from the Shanghai Gold Exchange suggested demand from China, the world's second largest consumer of the precious metal, is soft, the bank added.
A Reuters poll suggested India's decision to double gold import duty to four percent could cut imports to the number one global consumer by a third in 2012, to their lowest level in two years.
Chinese and Indian demand has a huge impact on gold prices.
" Those two countries together make up about 42 percent of total demand, compared to 23 percent of total demand five or six years ago," Nick Holland, chief executive of miner Gold Fields, told the Reuters mining summit on Monday.
" Those are two economies that are likely to grow at a significant pace, certainly relative to the West," he added. " They have a strong affinity for gold, and they also have an increasing number of the population who are being urbanised. Of the extra income they get, some will find its way into gold."
" I believe that is a fairly good underpin for the gold price."
A strike by jewellers to protest against a government levy entered its tenth day in most parts of India on Monday, bringing imports to a near standstill from the world's biggest buyer of bullion in the peak wedding season.
Silver rose 1.5 percent to $32.68 an ounce. The gold/silver ratio, or the number of silver ounces needed to buy an ounce of gold, eased back to 51.48 from 52.1 on Friday.
Coeur d'Alene Mines' Chief Financial Officer Frank Hanagarne said he saw the silver price at $25 an ounce or above over next 3 years, adding that silver industrial demand should support continued strong price.