GLD USD
Last:355.8
-1.06
Gold & metals
Post Reply
2401-2420 of 4402
Gold off 6-week low, Greek fears linger
SINGAPORE, March 7 (Reuters) - Gold regained some
ground on Wednesday, after falling 2 percent in the previous
session as worries about a possible Greek default resurfaced,
but dealers expected bargain hunters and jewellers to snap up
the metal at current levels.
FUNDAMENTALS
* Spot gold hardly changed at $1,673.86 an ounce by
0025 GMT after hitting a high at $1,675.50. It had dropped as
low as $1,663.95 on Tuesday, its weakest since Jan. 25.
* U.S. gold for April delivery rose $2.50 to
$1,674.60 an ounce.
* Athens turned up the heat on its creditors on Tuesday as
it sought to secure a bond swap that will cut its mountainous
debt, while the main bondholders group warned a disorderly
default would cause more than a trillion euros of damage to the
euro zone.
* Hong Kong shipped 32,948 kg of gold to mainland China in
January, down 15 percent from the previous month, the Hong Kong
Census and Statistics Department said on its website, reflecting
slower sales during the Lunar New Year holiday.
MARKET NEWS
* Commodity currencies like the Australian dollar nursed
heavy losses for a second session in Asia on Wednesday, while
the euro also looked wobbly as renewed worries about Greece hit
a market already fretting over China's slower growth target.
* Japan's Nikkei share average fell 1.1 percent in early
trade on Wednesday on fresh concerns over slowing global growth
after Brazil reported weak growth for 2011 and fears that Greece
may not meet its deadline for debt restructuring.
* Oil prices retreated on Tuesday as data showing a
shrinking euro zone economy fueled fears of curbed demand for
petroleum, while news that major powers accepted Iran's offer
for more talks on its nuclear program eased concerns about
supply disruptions.
DATA/EVENTS
0030 Australia GDP yy Final Oct 2011
1130 India M3 Money Supply
1200 Brazil Industrial output yy Jan 2012
1315 U.S. ADP national employment Feb
1330 U.S. Productivity Q4
1330 U.S. Labor costs Q4
2000 U.S. Consumer credit Jan
by Peter LaTona March 6, 2012
STOCKS SEE BIGGEST LOSS OF 2012 GOLD, SILVER START TO RECOVER
The stock market closed
down more than 200 points today, its biggest loss of 2012. As reported throughout the day, the fear of a Greek default is rocking the stock markets and precious metals markets. Stocks are down on fears of what a Greek default might do to the fragile global economic recovery. Gold and Silver prices are down largely because the falling euro has boosted the value of the U.S. dollar.
Legendary money manager Marc Faber, affectionately known as “Dr. Doom,” is advising to
buy precious metals. Faber sees the geopolitical risks in the Middle East as ramping up, saying an Israeli strike on Iran is a certainty. Faber told Reuters, “Political risk was high six months ago, and it is higher now. I think sooner or later, the U.S. or Israel will strike Iran.” He continued: “Say war breaks out in the Middle East or anywhere else Mr. Bernanke will just print even more money -- they have no option. …
They haven’t got the money to finance a war.”
At 4 p.m. (CST), the APMEX precious metals prices were:
- Gold - $1,675.90 – Down $28.50.
- Silver - $33.01 – Down $0.72.
Gold slides below key support as dollar strengthens
* Greek jitters hurt euro, stocks German bunds rise
* Gold breaks through support at 200 day moving average
* Platinum, palladium face biggest 1-day loss of 2012 (Updates prices, adds comment)
By Jan Harvey
LONDON, March 6 (Reuters) - Gold prices fell more than 2 percent on Tuesday, pushing below key support at $1,676 an ounce, as jitters over whether private creditors will agree to a Greek bond swap deal pressured the euro, while broader economic worries hit risk appetite.
Platinum, palladium and silver were all caught up in the selling, with the platinum group metals on track for their biggest one-day loss this year.
Spot gold touched a low of $1,663.95 an ounce and was down 1.9 percent at $1,673.20 an ounce at 1441 GMT. U.S. gold futures for April delivery fell $30.20 to $1,673.70.
The metal hit session lows as Wall Street fell at the open and the dollar rose to a 2-1/2 week high against the euro, with the single currency hurt by worries over a Greek debt swap deal.
Its losses accelerated after the metal broke its 200-day moving average at $1,676 an ounce.
Heavy selling was particularly seen in U.S. April gold futures. " It's long liquidation, everyone is trying to get out of the door at the same time," said Afshin Nabavi, head of trading at MKS Finance in Geneva.
Stock markets fell and the cost of insuring Greek, Spanish and Italian government debt against default rose on uncertainty over Greece's debt restructuring and a worsening economic outlook, while safe-haven German Bunds rose.
Gold has recently failed to benefit from the safe-haven flows that helped push it to record highs last, year as investors seek the safety of the dollar instead.
" Gold this year has been driven by exchange-rate mechanisms. Any dollar strength has not been positive for gold," said Citigroup analyst David Wilson.
" At some point, if confidence over Europe evaporates, you would think that should be postive for gold, but you still have to keep an eye on the dollar-gold trade-off."
Gold is extending losses after falling nearly 4 percent last week, the most since mid-December, after Federal Reserve chair Ben Bernanke disappointed financial markets when he failed to signal another imminent round of monetary easing.
STRONG APPETITE
Data showed gold imports into China from Hong Kong dipped 15 percent in January from the previous month, reflecting slower sales during the Lunar New Year holiday. Hong Kong's gold exports to China in 2011 tripled from a year earlier, showing China's strong appetite for bullion investment.
Silver also sold off in gold's wake, down 3.5 percent at $32.80 an ounce.
The gold/silver ratio, or the number of silver ounces needed to buy an ounce of gold, rose back to 50.7 on Tuesday, after dropping to a five-month low at 48.4 last week, as silver underperformed gold in a falling market.
Platinum group metals were the biggest losers, however, coming under pressure from both the stronger dollar and concerns about global growth, which has a greater effect on industrial platinum and palladium than on gold.
Spot platinum was down 2.7 percent at $1,615.24 an ounce, off a low of $1,598.70, while spot palladium was down 3.7 percent at $676.22 an ounce.
" Tomorrow's planned nationwide strike in South Africa and Zimbabwe's rejection of Zimplat's request for an extension in meeting the country's local ownership requirements, are once again raising concerns over global supply of these metals," said Standard Bank in a note.
" However, for the moment, these factors are being overshadowed by the dollar strength (off the back of heightened euro zone concerns)."
Zimbabwe's state-controlled Herald newspaper said the country is set to announce on Wednesday the fate of Impala Platinum's shareholding in its local unit after latest talks on black ownership ended in deadlock.
(Reporting by Jan Harvey, editing by William Hardy)
By Timothy OakesMarch 6, 2012OBAMA, ISRAELI P.M. AGREE TO WATCH SANCTIONS ON IRAN Precious metals prices were down this morning, driven primarily over the growing economic concern over the debt resolution steps being taken in Greece, causing the euro’s value to drop. Oil prices are on the rise as well, due to Middle East instability, but safe-haven appeal of precious metals is being influenced by exchange rate issues this morning. Analyst David Wilson said, “Gold this year has been driven by exchange rate mechanisms. … At some point, if confidence over Europe evaporates, you would think that should be positive for Gold, but you still have to keep an eye on the dollar-Gold trade-off.”
President Barack Obama and Israeli Prime Minister Benjamin Netanyahu met in Washington on Monday. Some agreements emerged, but Netanyahu did not agree to hold off possible military strikes against Iran, even though such a decision has not been made. The two leaders did agree to see how financial sanctions would work against Iran. Obama said that the U.S. “has Israel’s back.” However, Netanyahu took a more forceful tone, saying, “None of us can afford to wait much longer. As prime minister of Israel, I will never let my people live in the shadow of annihilation.” Some analysts, like Marc Faber, view military conflict as an almost foregone conclusion. He said, “Political risk was high six months ago and is higher now. I think sooner or later, the U.S. or Israel will strike Iran — it’s almost inevitable. … Say war breaks out in the Middle East or anywhere else Mr. Bernanke will just print even more money — they have no option. … They haven't got the money to finance a war. … You have to be in precious metals and equities. … Most wars and most social unrest haven’t destroyed corporations they usually survive. … If you can’t live with volatility, stay in bed.”
Greek private creditors basically have until Thursday night to agree to the bond swap initiative to put Greece on more stable financial ground. If the plan is not agreed to, it could kick in collective action clauses (CACs), which basically requires creditors holding 90 percent or more of the debt to take the swap, effectively getting their haircut. If less than 75 percent of the private creditors do not agree to the swap, then the CACs would kick in. Analyst Gary Jenkins said, “Obviously the report is written on a worst-case basis to try and encourage participation in the exchange. … The most likely outcome may well be that Greece passes its 75 percent target and then uses CACs to ensnare the remainder.”
At 8 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,679.90 – Down $24.80.
- Silver - $33.02 – Down $0.71
Last Updated : 05 March 2012 at 23:55 IST
Source :Commodity Online
Morgan Stanley: Gold supportive influences remain intact
LONDON (Commodity Online): Gold-supportive fundamentals remain intact, with last week’s decline largely a profit-taking pullback, said Morgan Stanley in a research note.According to Morgan Stanley, gold lost 5.4% on Wednesday, the largest daily move in three years, after Federal Reserve Chairman Ben Bernanke failed to comment on the likelihood of another round of quantitative easing, leading investors to believe that the timeframe for expanding easing measures will be pushed out.
“The one-day volatility was so high, prices actually posted a monthly high and low within hours. However, we believe that the move last week was profit-taking predicated by the news rather than a change in fundamentals. The drivers of the long-term uptrend in gold remain intact, most notably negative real rates,” Morgan Stanley added.
Morgan Stanley says that while U.S. economic data has been stronger lately, its economists suspect this is due to “temporary factors” rather than the start of a robust recovery.
“Indeed, they still believe that there is a 75% chance of another round of QE in the U.S. As such, we remain bullish gold,” Morgan Stanley continued.
Further, Morgan Stanley lists several factors supporting an uptrend even without QE, including negative real interest rates robust investment and physical demand, particularly in China desire for a hedge against financial and inflationary risks and lack of net central-bank selling.
Gold steadies, China growth worry weighs
SINGAPORE, March 6 (Reuters) - Gold steadied on
Tuesday after falling 1 percent in the previous session as
China, viewed by many as the engine of the global economy, cut
its economic growth targets, but cheaper prices were expected to
attract more buying from jewellers in Asia.
FUNDAMENTALS
* Spot gold hardly moved at $1,705.85 an ounce by
0008 GMT -- off a 1-month low at $1,687.99 struck in
end-February. Bullion hit a record around $1,920 last September.
* U.S. gold for April delivery added 0.18 percent at
$1,707.00 an ounce.
* China's acceptance of a slower rate of growth rattled
markets on Monday, but it also shows the gradual rebalancing of
the global economy long sought by world leaders is on track.
* The vast U.S. services sector grew in February at its
fastest pace in a year, contrasting with signs of recession in
Europe, while China cut its annual growth forecast to an
eight-year low.
MARKET NEWS
* Commodity currencies stayed under the cosh in Asia on
Tuesday, having suffered a shakeout overnight as investors cut
bullish positions after China announced its lowest annual growth
target in eight years.
* Japan's Nikkei share average edged up on Tuesday as
exporters gained on the weaker yen, offsetting some concern over
a near-term market correction, while attractive valuations
underpinned market sentiment.
* Oil prices edged up on Monday in tug-of-war trading as
supply risks and tensions over Iran's nuclear program provided
support, but concerns about global economic growth limited
gains.
DATA/EVENTS (GMT)
0330 Australia RBA cash rate Final Mar 2012
1200 Brazil GDP yy Oct 2011
1245 U.S. ICSC chain stores yy Weekly
By Craig C. CalvinMarch 5, 2012GOLD PRICE CLOSES ABOVE $1,700 STOCKS FALL ON CHINA, U.S. NEWS Since the Mid-Day Gold & Silver Market Report, the price of Gold climbed to end the day above $1,700. Markets across the board have been weighed down by depressing data released in the U.S., as well as from China and Europe. The Gold price fell sharply last week in response to testimony by Federal Reserve Chairman Ben Bernanke before Congress, in which he did not give indications that the Fed was considering another round of quantitative easing. However, in a note to clients, analysts with Commerzbank stated that although there is “additional scope for correction” in precious metals prices, such correction would likely be temporary. Many analysts and economists have predicted that Gold is on track to reach prices above $1,800 before summer.
Stocks in the U.S. dropped today, responding to news out of China that it had lowered its economic growth target, as well as to news in the U.S. that there was a decrease in orders to factories (the first such decrease in three months). After advancing for three weeks straight, the S& P 500 index fell 0.4 percent. The Dow Jones Industrial Average and the Nasdaq saw similar declines. Responding to the drop in stocks, David Joy, a chief market strategist with Ameriprise Financial Inc., said, “It’s wise to take a little money off the table. Some of the easy gains have already been made. We’re back to focusing on the economic fundamentals. China saying that they are targeting 7.5 percent growth raises concern of a hard landing.” Another analyst pointed to a decline in the Citigroup Economic Surprise Index for the U.S. as a cause for concern in the market.
A selection of charts taken from Pricedingold.com provides an entertaining look at what the prices would be in Gold for some everyday goods and services. Included among the charts, the value of the U.S. dollar when priced in Gold (with the dollar showing a significant decline over the past few decades), home prices compared to the Gold price, and the U.S. Gross Domestic Product represented in grams of Gold. Some more whimsical charts show the cost for first-class postage priced in Gold, the price of coffee in milligrams of Gold per pound, and the price for a pound of uranium in grams of Gold.
At 4 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,707.20 – Down $3.10.
- Silver - $34.04 - Down $0.50.
Gold recovers from lows as dollar retreats
* Euro recovers from two-week low versus the dollar
* Asia physical gold buying continues, momentum slows
* Platinum edges away from parity versus gold
By Jan Harvey
LONDON, March 5 (Reuters) - Gold recovered some lost
ground on Monday as the euro swung back into positive territory
against the dollar and stock markets pared losses, but investors
remained cautious towards the precious metal after last week's
hefty price drop.
Spot gold was down 0.5 percent at $1,703.50 an ounce
at 1452 GMT, up from an earlier low of $1,694.24 an ounce. U.S.
gold futures for April delivery fell $5.50 an ounce to
$1,705.30.
Spot prices fell 3.9 percent last week, their worst weekly
performance since mid-December, after Federal Reserve chairman
Ben Bernanke gave no further hints, in a key speech, of a third
round of quantitative easing in the United States.
It retreated only briefly below $1,700 an ounce this
morning, however, running into strong support from physical
buyers and expectations that the low interest rate environment
could eventually support much higher prices.
" Gold was at quite a high level relative to the dollar index
before this latest correction, so we have come back to more
middle-of-the-road levels, from that perspective," said
Macquarie analyst Hayden Atkins.
" I don't think there has been huge psychological damage done
that would push gold lower from here," he added. " I still think
the trajectory for the dollar is lower in the balance of the
year, and that should be supportive.
" Gold ran quite hard against a relatively stable currency
through February, so I think it has got good support here."
Although extreme risk aversion was a key factor lifting gold
last year at a time when the dollar was strengthening, it has
since re-established its usual inverse relationship to the U.S.
unit as investor appetite for the dollar as a safe haven
outweighed that for gold, and as panic in the markets subsided.
The dollar retreated on Monday after earlier strengthening
against the euro, which came under pressure from concerns over
Greece's progress on completing a huge debt restructuring deal
and poor euro zone economic data.
European shares also pared losses, having fallen in early
trade after euro zone services sector PMI data missed
expectations and nerves grew before a Thursday deadline for
investors to voluntarily take part in Greece's debt swap deal.
Analysts say while gold is likely to consolidate in the
short term, in the longer run it remains firmly underpinned by
the United States' ultra loose monetary policy, portfolio
diversification, and strong physical demand from Asia.
" Negative real interest rates and accommodative monetary
policy were and remain the key drivers of investment demand,"
Morgan Stanley said in a note. " Bernanke's testimony did nothing
to remove this benefit."
HEDGE FUNDS RAISE BULLISH BETS
Money managers, including hedge funds and other large
speculators, raised bullish bets in gold to their highest in
five months in the week of Feb. 28, according to data from the
U.S. Commodity Futures Trading Commission on Friday.
Asian jewellers and other physical gold buyers were still
expected to be interested in gold at current price levels, which
are down sharply from three-month highs around $1,790 hit last
week before the sell-off.
Gold's fundamental drivers remain intact, but more
consolidation is expected in the foreseeable future.
" In our meetings last week, factors like the explosion in
the balance sheets of the ECB, BoJ, BoE and the Fed and large
exports of gold from Hong Kong into China in Q4 were regularly
cited as reasons to view gold favourably this year," said UBS in
a note. " And we heard more mention of rising inflation
expectations than we have for some time."
" Yet the macro community appears to be engaged in a waiting
game, with no one willing to take the first step," it added. " It
seems the best thing gold can do right now is consolidate in the
low $1,700s and inspire some confidence that a floor is nearby."
Silver was down 0.2 percent at $34.38 an ounce. It
also fell last week, but less dramatically than gold. Platinum
was down 1.8 percent at $1,662.49 an ounce, while
palladium was up 0.3 percent at $701.97 an ounce.
(Editing by James Jukwey)
Gold eases on firmer U.S. dollar physicals support
* Dollar index hits two-week high
* Asia physical gold buying continues, momentum slows
* Spot gold may rebound to $1,728/oz, technicals show
* Coming up: U.S. factory orders, Jan 1500 GMT
By Rujun Shen
SINGAPORE, March 5 (Reuters) - Gold edged lower on Monday, pressured
by a firmer dollar although it was regaining its footing after last week's
biggest weekly loss in more than two months, supported by demand from jewellery
makers in Asia that is helping to cushion the fall.
Spot gold lost nearly 4 percent last week, after U.S. Federal Reserve
Chairman Ben Bernanke disappointed the market by making no reference to further
monetary easing in congressional testimony.
Prices have since rebounded modestly and found solid support at the $1,700
level, with investors still confident in gold's appeal as real interest rates
remain low and inflation looms as a longer-term concern.
" There isn't much room on the downside for gold, because the sharp fall last
week was an over-reaction to an unfulfilled expectation," said Hou Xinqiang, an
analyst at Jinrui Futures in the southern Chinese city of Shenzhen.
But Hou said gold's short-term technical outlook might have weakened after
several recent attempts to reach key resistance at $1,800 failed.
" We are likely to see gold seesaw in the $1,700 to $1,800 range in the short
term, as investors await a new stimulus," Hou added.
Spot gold was down $2.61 an ounce at $1,709.16 at 0800 GMT after
rising as high as about $1,716 an ounce. U.S. gold was steady at
$1,710.50.
Technical signals suggested gold could rebound to $1,728 an ounce during the
day, said Reuters market analyst Wang Tao.
Strength in the U.S. dollar weighed on sentiment in dollar-priced
commodities, after a second injection of cheap three-year funds by the European
Central Bank last week and a surprise policy easing by the Bank of Japan a few
weeks ago pressured the euro and the yen.
Economists believe that the ECB will keep interest rates at 1.0 percent
until deep into 2013 on concerns over high oil prices and the impact of the huge
cash boost.
Asian jewellers and other buyers of physical gold were still expected to be
interested in buying gold at current price levels, which are down sharply from
three-month highs around $1,790 hit last week before the sell-off, although the
pace of purchasing has slowed from last week's buying frenzy when prices fell
below $1,700.
" The $1,710 level is still attractive for physical buyers," said a
Singapore-based dealer. " Thailand is still buying and Indonesia may come in
later as well."
Money managers, including hedge funds and other large speculators, raised
their bullish bets in U.S. gold futures and options to the highest level in five
months in the week of Feb. 28, prior to the sharp correction in prices.
Last Updated : 05 March 2012 at 22:05 IST
How much is Buffet priced in Gold?
NEW YORK (Commodity Online): Warren Buffet's distaste for gold is well known and even after a 10 year bull market, most investors are amazed when Buffet not only refuses to buy gold but goes on to thrash it.
And with gold being increasingly considered as a currency, what exactly is Buffet's worth in terms of gold? The below graphic shows Buffet's Berkshire Hathaway priced in gold (chart courtesy: www.azizonomics.com):
In a recent letter to the shareholders of Berkshire Buffet states this long-standing view of gold- the fact that it has no intrinsic value and " being neither of much use nor procreative”. And with the current gold stock valued at $9.6 trillion, Buffet argues that one could buy all of US crop farmland and 16 Exxon mobils, assets that will easily outperform gold over the next 100 years.
Though, it remains to be seen if Buffet is eventually proved right on his view of gold, it cannot be contested that in the current economic environment, gold is believed as a safe haven. And the value of an asset is directly linked to the strength of investor belief.
By Peter LaTonaMarch 5, 2012GOLD PRICE SLIGHTLY LOWER, SILVER SLIGHTLY UP IN EARLY TRADING Gold and Silver prices have been relatively stable in morning trading. Gold did dip below $1,700 before rebounding. Platinum and Palladium have taken sharper hits to their prices. Generally speaking, this lack of price movement occurs on days when there is a void of news affecting Gold and Silver. This was true this morning. Greece and oil remain the top headlines. The popular notion that a solution has been finalized to deal with Greek debt is not correct. In fact, this is a very important week because it is time for the private bondholders to decide to what extent they will participate in the debt swap, if at all. Greece must get 75 percent of these bondholders to agree so as to avoid kicking in credit-default swaps. If this does not go through, Greece is again looking at the possibility of default.
HSBC Chief Economist Stephen King said rising oil prices are beginning to overtake Greece as the greatest reason for investor anxiety. If we see prices start to approach what was experienced in 2008, it would greatly threaten the global economy. The U.S. experienced an extended period of stagflation in the early 1970s as a direct result of higher oil prices.
At 8 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,705.80 – Down $4.50.
- Silver - $34.62 – Up $0.08.
Last Updated : 05 March 2012 at 07:10 IST
Source :Commodity Online
Sharp correction hits gold, oil soldiers on: Saxo Bank
By Ole S. Hansen
A mixed week for commodities where the markets were driven by another injection of cheap money from the European Central Bank, upbeat economic outlook comments from the Federal Reserve Chairman and continued geopolitical tensions. Stock markets rose again with the S& P 500 reaching the highest level since 2008 and the Nasdaq 100, heavy on technology stocks, reaching the highest level since 2000.
Next week elections in Russia and Iran, Chinas national congress meeting to prepare for new leadership, seven central bank meetings and US employment data will be watched closely by commodity traders. Furthermore, should the recent spike in US retail gasoline prices continue an announcement soon concerning the release of strategic reserves cannot be ruled out.
The DJ-UBS index lost one percent on the week as gains in many agricultural commodities and the above mentioned gasoline price developments were off-set by corrections among some of the index heavy constituents, such as crude oil and gold. The dollar ended higher following the allocation of EUR 530 billion by the ECB on the assumption this would be the last central bank induced sugar rush for a while.
Silver rollercoaster tests investors’ resolve
The silver bull carriage almost left the station on Wednesday when multiple technical bullish signals triggered a strong rally once 35.70 was broken. The break had investors piling in and before long a near-term target of 37.30 was reached and breached. What followed Thursday after Fed Chairman Bernanke failed to signal further quantitative easing sent the market into a flux as it dropped by 9 percent in just two hours. The sell-off was exacerbated as many new short-term tactical long positions had been initiated within the previous 24 hours and it now leaves many scratching their heads wondering what kind of foundation the rally had been built upon, apart from technical.
However on a relative basis to gold silver continues to do well with the price of one ounce of gold reaching a low of 48.5 ounces of silver after having been trading in a 50 to 55 ounce range during the last five months. The dramatic sell-off once again shows the vulnerability of silver, given its relative low level of liquidity, especially during times of adversity. The uptrend from the December low is still intact and a close back above 35.70 will remove some of the nervousness that has resurfaced.
Gold correcting following failure to break 1,800
Just like silver investors, gold investors also got caught out by the relative upbeat comments from Bernanke which caused some revisions to previous expectations about low interest rates until 2014. It was the introduction of this forecast by the Federal Reserve on January 25 that triggered an upward shift in gold back above 1,700 and which saw money managers slowly beginning to engage.
The 100+ dollar drop, the largest daily percentage loss since 2008, has just like silver dented investor belief in another strong year for precious metals and some consolidation can now be expected with the near-term risk pointing towards a recheck of the 200-day moving average, currently at 1,676 on spot gold. All new positions that were initiated during the last month are currently under water and this represents the biggest risk to prices near term as further weakness could trigger additional long liquidation.
On a positive note, investments in exchange-traded products have risen to a new record of 2,404 metric tonnes according to Bloomberg, indicating that long-term and retail investors still have not dropped their love affairs with gold. Whether hedge funds and other large tactical investors have been put off by this move remains to be seen. You can follow these investors’ speculative positioning across all major US traded commodities in my weekly CFTC update. Another factor that could help support prices would be the re-emergence of physical demand which has helped cushion previous sell-offs and which has been mostly absent during the recent rally. Crude oil reaching 2008 levels
Crude oil traders began the week booking some profits following the strongest monthly performance since February 2011. The fear of supply disruption and continued strong demand from emerging economies and not least financial speculation has kept the price of Brent crude elevated above 120 dollars per barrel for a couple of weeks now. Just how big the fear is was seen Thursday when an Iranian report about a pipeline explosion in Saudi Arabia, later denied, caused a five percent spike to 128.40, the highest level since August 2008. If the report was deliberately planted by Iran in order to achieve even higher prices to compensate for lost exports they initially succeeded in taking advantage of the heightened nervousness.
The above mentioned profit taking prior to the new spike was also driven by increased attention to the potential economic impact of ever higher oil prices. In the US politicians are becoming increasingly vocal in calling for the release of strategic reserves following a 16.5 percent spike higher in retail gasoline prices since mid-December. The average price currently stands at USD 3.74 per gallon, the highest price on record for this time of year and with the switch towards more expensive summer blends in March and April US motorists could be facing record prices this summer just as the campaign for the Presidential election kicks off.
A golden moment in crude oil?
Money managers have further increased speculative long positions during the week, accordingly to our calculations. The combined speculative long in Brent and WTI crude is now approaching 450 million barrels and the risk of a sharp correction, just like the one that hit gold and silver this week, has thereby further increased. It would however require a change in the perception of the risk associated with the situation surrounding Iran before such an event occurs. Investors will probably be able to cope with a correction to 119 without reducing exposure while a deeper correction could trigger a rout. For the week ahead we expect that Brent crude will stay within its established range - a band between 119 and 121 - providing support while 128 will provide resistance.
(Ole S Hansen is Senior Commodity Strategist at Saxo Bank)
Gold marks time, pressured by dollar strength
SINGAPORE, March 5 (Reuters) - Gold hovered around
$1,710 an ounce on Monday after suffering its biggest one-week
loss, as a stronger dollar weighed on market sentiment and
investors watched the latest developments in the euro zone debt
crisis.
FUNDAMENTALS
* Spot gold was little changed at $1,712.36 an ounce
by 0041 GMT, after posting a weekly decline of 3.9 percent in
the previous session.
* U.S. gold edged up 0.2 percent to $1,713.80.
* Spain set itself a softer deficit target for 2012 than
originally agreed under the euro zone's austerity drive, putting
a question mark over the credibility of the European Union's new
fiscal pact.
* Money managers, including hedge funds and other large
speculators, raised their bullish bets in gold to the highest
level in five month in the week of Feb. 28, as prices surged
more than 4 percent to three-month highs before they corrected
sharply.
* Investors will be watching China's annual meeting of
parliament, the National People's Congress, for hints of policy
shifts that will direct the cause of the world's second largest
economy.
MARKET NEWS
* The dollar touched a fresh two-week high against a basket
of major currencies in Asia on Monday, benefiting by default as
both the euro and yen appeared to be used as funding currencies
to buy higher yielding assets.
* The S& P and Nasdaq notched their eighth week of gains out
of the last nine, but momentum ran out on Friday as stocks ended
the day lower in a thinly traded session.
DATA/EVENTS
0858 EZ Markit Services PMI Feb
1500 U.S. ISM N-Mfg PMI Feb
1500 U.S. ISM N-Mfg Bus Act Feb
1500 U.S. Factory orders Jan
by Timothy Oakes March 2, 2012
DOLLAR RISES ALONG WITH CONCERNS OVER MIDDLE EAST
Precious metals prices have remained relatively steady today with technical selling to balance investors’ books for week’s-end profit-taking. The dip in stock markets is attributed to many investors feeling the rally was moving faster than the actual global growth outlook. Money manager John Carey said, “Some people may think that the
market is a bit ahead of itself after the rally in stocks. There’s concern about a potential slowdown as a result of Europe’s debt crisis. People seem to have been more relaxed about the situation in Europe, but when you look closely you see that the underlying issues remain unresolved.” The uncertainty in the markets and rise in dollar strength are generally good indicators for Gold prices.
Developments in the Middle East continue to cause concern. The
Red Cross was being denied access to the Homs area in Syria, and Israeli military action against Iran remains a possibility. Red Cross President Jakob Kellenberger said, “It is unacceptable that people who have been in need of emergency assistance for weeks have still not received any help. We are staying in Homs tonight in the hope of entering Baba Amro in the very near future.” President Barack Obama issued his most direct threat of military action earlier today against Iran. Obama warned, “
As president of the United States, I don't bluff.” Monday’s scheduled meeting between Obama and Israeli Prime Minister Benjamin Netanyahu is shaping up to be some of the most important talks between the nations in years. In the same interview, Obama said, “At a time when there is not a lot of sympathy for Iran and its only real ally (Syria) is on the ropes, do we want a distraction in which suddenly Iran can portray itself as a victim?”
U.S. wages are on the rise, which is increasing the likelihood of greater consumer spending through the year, with the hope that it will help increase the Gross Domestic Product. Rising incomes show that an improved labor market will provide people the financial ability to get out and spend.
Consumer spending accounts for 70 percent of the economy. Chief U.S. economist Joseph LaVorgna said, “Consumers have a lot more firepower than we thought. … We should see stronger consumption over the course of the year. Things are moving in the right direction.”
At 4:15 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,712.90 – Down $9.80.
- Silver - $34.80 – Down $0.88
By Ryan SchwimmerMarch 2, 2012GOLD’S BUYING OPPORTUNITY MAY NOT BE OVER Gold and Silver are giving back yesterday’s gains this morning, while U.S. stock futures trade lower. A strengthening U.S. dollar is the likely cause of Gold and Silver’s decline, as currency markets have recently been the controlling factor in the prices of the metals. One analyst, James Steel, believes thatthe buying opportunity for Gold may not be over yet. He said, “The rather modest bounce in Gold prices implies that the sell-off might not be over.” He added that in the longer term, “monetary policy is still highly accommodative, and we believe this will eventually support the Gold price.”
An election in Iran highlighted growing tensions between that country and Western nations. Supreme Leader Ayatollah Ali Khamenei called on his country’s citizens to vote, as he said, “The arrogant powers are bullying us to maintain their prestige.” U.S. President Barack Obama is scheduled to meet with Israeli Prime Minister Benjamin Netanyahu in the coming days. Israel has been very outspoken about their willingness to use military force to prevent Iran from continuing its nuclear program, and Obama is worried that such an attack may be premature if or when it happens.
25 of the 27 European Union countries signed a fiscal pact which states that all countries are to write a golden rule regarding balanced budgets and to put those into constitutions or laws. European Council President Herman Van Rompuy said that the agreement “helps prevent a repetition of the sovereign debt crisis.” However, that raises a question: Doesn’t the crisis have to be over before a repetition can occur?
At 8:02 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,713.50 – Down $9.10.
- Silver - $35.03 – Down $0.66.
March 01, 2012 • 17:05:18 PSTThe best performing commodities manager tells us the gold rally is far from over. Read
Gold edges up as buyers slowly return after selloff
SINGAPORE, March 2 (Reuters) - Gold edged higher on
Friday as buyers trickled back to the market, drawn by this
week's plunge of 5 percent, although bullion is still looking at
its worst week since December after Wednesday's sell-off.
FUNDAMENTALS
* Spot gold edged up 0.2 percent to $1,720.55 an
ounce by 0040 GMT, on course for a weekly decline of 3.4
percent, its biggest one-week fall since mid-December.
* U.S. gold was flat at $1,722.20.
* U.S. Federal Reserve Chairman Ben Bernanke and other top
central bank officials highlighted risks to the economic
recovery despite recent signs of strength, but offered few hints
that any additional monetary stimulus might be needed.
* On Wednesday bullion prices tumbled 5 percent as Bernanke
refrained from signaling further bond purchases, which had been
one of the drivers sending gold prices up 10 percent so far this
year.
* Prospects for a sustained global economic recovery dimmed
on Thursday as manufacturing cooled in the United States and
European factories sputtered at a time when central banks are
running out of policy options.
* Holdings in gold-backed exchange-traded funds gained
238,674 ounces to a record high of 70.76 million ounces,
suggesting investors remained keen in gold.
* Supporting sentiment in platinum group metals, U.S. auto
sales rose nearly 16 percent in February and annual sales rate
leapt to its best level in four years.
MARKET NEWS
* U.S. stocks rose on Thursday, moving back to 2008 highs,
after a jump in bank shares and further upbeat data on the labor
market, though sharp gains in oil prices limited the advance.
* The euro was on the backfoot in Asia on Friday, having
fallen to one-week lows against the greenback and other
currencies in a move seen likely to continue after this week's
massive cash injection by the European Central Bank.
* U.S. crude futures traded steady on Friday, off a near
10-month high in post-settlement trade after a Saudi official
was reported to have denied Iranian media pointing to an
explosion at an unknown oil pipeline in Saudi Arabia.
DATA/EVENTS
0700 Germany Retail sales yy real Jan 2012
1000 Euro zone PPI Jan
Gold rebounds 1.5 pct after rout, support seen
* Technicals help after biggest 1-day drop in 3-1/2 years
* Open interest down 3.6 pct volume strong for second day
* Emerging-markets physical gold demand may rise after rout
* Coming up: New York State's ISM manufacturing data Friday
By Frank Tang and Jan Harvey
NEW YORK/LONDON, March 1 (Reuters) - Gold rose 1.5
percent on Thursday, rebounding above $1,700 an ounce
as the previous session's 5 percent plunge induced investors to
buy at lower prices on hopes the tumble was a healthy correction
rather than the start of a bear market.
Bullion climbed in heavy, choppy trade as gains in U.S.
equities and crude oil combined with technical support helped
the precious metal find its footing, with stronger-than-average
volume for a second day.
On Wednesday, open interest in U.S. gold futures lost nearly
20,000 lots for its biggest one-day drop since May 2011, as
fears of a lack of further monetary easing by central banks and
heavy stop-loss orders below $1,750 triggered a sharp sell-off.
The decline in open interest and gold's more than $100
tumble in high volume on Wednesday suggested that one
or a few large hedge funds or institutional investors might have
left the gold market, traders said.
Gold has held gains above $1,700 an ounce throughout the
session after it made its high and low for February all in
Wednesday's session for a key reversal day, analysts said.
" The fact that it failed to break above a high near $1,800
signified a formidable level of resistance, and more importantly
shows the bulls are just not ready to take the market back to
new high territory," said Adam Sarhan, CEO of Sarhan Capital.
Spot gold was up 1.5 percent at $1,721.20 an ounce by
2:38 PM EST (1938 GMT), having hit a session low at $1,694.09 an
ounce.
Analysts said the next important support levels are its
200-day average at $1,674 and $1,650 an ounce, where the metal
found support during its last sell-off in late January.
" There is definitely a chance that gold can test its
200-day moving average. If we don't we may be moving into a
near-term bear market," said Fred Schoenstein, a trader at
Heraeus Precious Metals Management.
Spot prices fell more than 5 percent on Wednesday
after U.S. Federal Reserve Chairman Ben Bernanke did not signal
more monetary easing was imminent, which had been a key support
of gold's 10 percent gains year to date.
U.S. gold futures for April delivery settled up
$10.90 an ounce at $1,722.20 an ounce.
Volume was heavy for a second straight session, about 20
percent above its 30-day average for one of the busiest sessions
of the year, preliminary Reuters data showed.
OPEN INTEREST, SPEC LONGS DOWN
Analysts said they expect gold to be steady after its bounce
from lows under $1,700 an ounce, as the sell-off halted the
steady increase in speculative net long positions held by money
managers in the last two months.
COMEX gold futures' open interest, a measure of market size
that represents the number of active futures contracts in
circulation, declined 17,303 lots, or 3.6 percent, to 461,741
lots as of Wednesday, CME data showed.
" Declines of this magnitude, however, often attract
emerging-market buyers and may also interest potential central
bank buyers," said James Steel, chief commodity analyst at HSBC.
A lack of demand for physical bullion in recent weeks meant
gold had little fundamental support once selling got under way.
Despite Wednesday's sell-off, bullion held by gold-backed
exchange-traded products rose, with holdings of the largest, New
York's SPDR Gold Trust, up 9 tonnes.
Silver was up 2.4 percent at $35.43 an ounce. It also fell more than 6 percent on Wednesday.
