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Gold inches down Greece debt deal eyed
SINGAPORE, Feb 9 (Reuters) - Spot gold inched lower on
Thursday, after a nearly 1-percent drop in the previous session,
as Greece was seen moving closer to a debt deal after talks that
have dragged on for days.
FUNDAMENTALS
* Spot gold inched down 0.1 percent to $1,730.99 an
ounce by 0036 GMT. U.S. gold edged up 0.1 percent to
$1,733.80.
* Greek political leaders agreed to cut the minimum wage by
22 percent as part of reforms required for a new bailout, but
left the issue of supplementary pensions unresolved.
* All eyes will be on what the European Central Bank is
willing to do to help Greece when it holds its monthly policy
meeting on Thursday, with interest rates expected to stay on
hold ahead of a major funding operation later this month.
* Investors will also watch China's January inflation data
due at 0130 GMT, which is expected to hold unchanged from
December, according to economists polled by Reuters.
* Nasdaq OMX Group Inc said on Wednesday it is
launching new spot gold futures that will be cash-settled with
an aim to simulate over-the-counter trading of spot bullion.
* German exports fell at their fastest rate in nearly three
years in December and imports unexpectedly dropped, adding to
signs that the euro zone sovereign debt crisis hit the region's
top economy hard in the fourth quarter.
MARKET NEWS
* The euro dipped in early Asian trade on Thursday after
Greek political parties concluded marathon negotiations with the
issue of pension cuts left unresolved, though hopes that a deal
will soon be reached limited the damage.
* U.S. stocks closed flat in another thinly traded session
on Wednesday as Greece remained in a standstill over accepting
tough reforms in exchange for a bailout critical to avoiding a
chaotic default.
DATA/EVENTS
0130 China CPI yy Jan
0130 China PPI yy Jan
0500 Japan Consumer confid.index Jan
1200 Britain BOE Bank Rate Feb
1245 EZ ECB rate decision Feb
1330 U.S. Jobless claims Weekly
Closing Gold & Silver Market Report – 2/8/2012
by Peter LaTona February 8, 2012QE3 STILL POSSIBLE, FEDERAL RESERVE OFFICIAL SAYS
John Williams, president of the San Francisco Federal Reserve Bank, said today that the Fed might need to launch a third round of asset purchases with printed money, commonly known as quantitative easing, if the economy slows and inflation remains below 2 percent. He said that buying mortgage-backed securities would be a logical choice. “I expect the pace of economic growth to be frustratingly slow and the unemployment rate to remain high for years to come,” Williams said.
Gold and Silver prices finished lower today, while Platinum and Palladium experienced small price gains. Greek debt talks continue to dominate the action. When talks began to look promising, the Gold price went up if talks had been disappointing, the Gold price went down. It is not the mood of the negotiations that moves Gold prices it is the movement of the euro and its relation to the U.S. dollar. Talks look good, then the euro goes up, the dollar goes down, and Gold goes up. Today was a day of uncertainty. Stocks went up slightly on hopes of a resolution, while Gold and Silver prices went down in disappointment. Stay tuned, as the drama will continue tomorrow.
At 4 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,732.90 – Down $14.00.
- Silver - $34.02 – Down $0.25.
Gold consolidates gain as Greece lifts euro
* Euro zone uncertainty to underpin gold sentiment
* Gold-silver ratio drops to three-month low
* Coming Up: Greece's decision on rescue package terms
London, Feb 8 (Reuters) - Gold was steady on Wednesday, fairly close to recent 11 week highs and taking a cue from the euro's march to a two month peak as investors bet that Greece would finally secure a second bailout needed to avoid default.
Receding risk aversion - reflected in rising share prices - is seen as a dampening factor for gold's safe-haven credentials, with German government bonds feeling some presure.
But wider uncertainty on the euro zone's economic outlook was more supportive for gold, with Germany seeing the steepest drop in exports for nearly three years in December and the Bank of France saying its economy would not grow at all in the first quarter of 2012.
Simon Weeks, head of precious metals at Scotiamocatta, said bullion seemed to be caught in an identity crisis between acting as a safe haven or risk asset.
" It seems that gold has gone up as a commodity along with equities and other commodities, rather than anything else. The same people who bought it after the Fed news seem to be the ones that bought it yesterday...so I'm a little sceptical on the validity of this move," he said.
By 1317 GMT, spot gold stood at $1,746.79 an ounce, up 0.1 percent after testing upper resistance at $1,751.30. U.S. gold was broadly steady at $1,748.90.
Commerzbank analyst Carsten Fritsch said the market had latched onto its commodity market fundamentals.
" The positive correlation between gold and risky assets like stock markets seems to be in place after dropping temporarily on Friday," he said.
Athens tested investor's patience yet again on Tuesday by postponing a decision on whether to accept austerity and reform measures in exchange for a 130 billion euro ($172 billion) bailout from the IMF and EU.
Some analysts said gold could face a short-term pullback if Greece strikes a deal, as it may hurt the appeal of safe-haven assets, but in the long run the lingering euro zone debt crisis is expected to support sentiment.
Looking at technical analysis charts, Barclays backed a bullish outlook for the metal, seeking a move above $1,765 to confirm its view.
On physical markets, premiums on gold bars in Singapore stood around $1 an ounce over London prices, said a Singapore-based dealer.
The gold-silver ratio, which measures how many ounces of silver is needed to buy an ounce of gold, hovered above 51, its lowest level in three months. For most part of 2011, the ratio was below 46, compared to a near 30-year average of 64.
Spot silver added 0.5 percent to $34.33 an ounce, leading the precious metals complex with a nearly 24-percent gain so far this year.
Edward Meir, an analyst at INTL FCStone, said silver is facing heavy resistance around $35.70, near a previous high hit in late October.
" Should silver take out this level, we will be in a technical breakout stage, possibly setting the complex up for a push to the $40 mark," he wrote in a research note.
Platinum prices were firm at $1,647.74 an ounce, while palladium rose to $707.47.
UBS said in a note to clients that there was potential for platinum to attract a South African premium due to production outages.
" The ongoing production outages at Rustenburg, coupled with a risk-on macro backdrop, could see investors starting to consider the possibility of a $1,700-plus price tag," the bank said.
(Additional reporting by Rujun Shen in Singapore, editing by Keiron Henderson)
Morning Gold & Silver Market Report – 2/8/2012
By Timothy OakesFebruary 8, 2012GREECE MISSES DEADLINES IRAN A MILITARY CONCERN?
Precious metals prices have remained relatively steady in overnight trading. Greece’s difficulty in reaching an agreement on its debt crisis continues to be an albatross around the neck of the global economic outlook. Commodity strategist Jeff Friesen said, “If Greece were to agree on everything right away, I don't think it would solve everything, because they will still have to implement the measures. …There are plenty of land mines left.” Basically, with all the European economic uncertainty and the far-reaching global impact, central banks will push more accommodative monetary policies to offset recession fears. Those central banks also will most likely be buying Gold.
The problems persist over the terms of the initial agreement for the bailout package for Greece. An agreement on austerity measures must be reached by March 20, when a 14.5 billion-euro bond payment comes due. As of now, Greece is not able to make that payment without the bailout. Greek Prime Minister Lucas Papademos is set to meet with Greek political leaders today after late-night meetings with the European Commission, the European Central Bank and the International Monetary Fund. In an interview today, German deputy floor leader Michael Meister said, “The situation is getting more problematic for Greece day by day. … A day wasted in failing to tackle Greece’s administrative, budget and competitive problems is a bad day.” He said this reform was “not for Brussels, Berlin or the IMF, but for their own sake.”
Iran continued its threatening rhetoric toward the U.S. The U.S. has imposed its financial sanctions against Iran. However, in a news conference in Russia, Iranian ambassador Seyyed Mahmoud-Reza Sajjadi said, “The Americans know very well what Iran is like and what our potential is. … Iran is in a very good position to deliver retaliatory strikes on America around the world. … An attack on Iran would be suicidal for them.” Russia continues to stand behind its Middle Eastern allies, Iran and Syria.Bombing continued in Syria, and Turkey looks to be stepping up its effort to secure a united Western-, Arab- and U.N.-backed effort to remove Syrian President Bashar al-Assad from power. Russia and China oppose that course and are hoping for a more diplomatic resolution that would allow Assad to stay in power.
At 8:01 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,741.90 – Down $4.90.
- Silver - $34.25 – Down $0.02.
- Platinum - $1,652.40 – Down $3.40.
Bernanke Sends Gold & Oil Surging in War Against Middle Class
Translation, the Fed will keep printing money until doomsday. read more
'This precious metal could rise 125% over the next 10 months'
By Brett Eversole
You've probably never considered this precious metal before. But you should today...
The last time a trade like this set up, investors walked away with a double in just 10 months. And every similar trade in the last seven years was a winner.
At DailyWealth, we love " contrarian" investing ideas. The more an investment idea is hated, the more we're ready to step up and buy. At the point of maximum pessimism, there probably aren't many people left to sell... and just a little bit of buying interest can turn things around.
That's exactly what's happening in " the precious metal you've never considered."
The chart below shows the price of this precious metal (in black) versus how many large speculators are making bullish bets on the metal through commodity futures (in blue). The lower the blue line, the more hated it is...
In short, traders hate this precious metal right now. The last time it was this hated was March 2009. Back then, the price increased 125% in just 10 months.
Looking farther back, to 2005, traders have only been this pessimistic four other times. Each of those times marked the start of a great nine-month trade. If you had bought this precious metal each time, on average, you would have made 62%. Every trade was a winner.
With traders this pessimistic, I think it's a great time to buy... especially because there's a big long-term " tailwind" behind this trade...
You see, this precious metal is in big demand by industries, especially carmakers. It's used in practically every gas-powered car you see on the road. And as of now, there is no viable substitute.
Over the next decade, worldwide vehicle demand is going to explode. Right now, India only has 12 cars per 1,000 people. China only has 28. The U.S. has 451. As the world " catches up" to the U.S., carmakers will need more of this precious metal to keep pace.
In 2011, the world's supply of this precious metal was 7.42 million ounces. But demand was over 1.5 million ounces more (8.89 million ounces, to be exact). Recycled scrap makes up the difference for now. But as demand increases over the next decade, supply will have a hard time keeping up.
Supply and demand are Economics 101. When demand is greater than supply, prices will rise. I don't expect it to be different with this precious metal...
I'm talking about palladium. It's a " sister metal" to platinum.
You can invest in Palladium through physical bullion. Or you can easily buy it through the Physical Palladium Shares Fund (PALL). Importantly, PALL is fully backed by physical palladium, not financial contracts.
Based on supply and demand, palladium prices could go up by hundreds of percent in the long term. In the short term, we should see double-digit returns this year alone.
Even if you've never considered an investment in palladium before, you should now...
Source: DailyWealth
Gold holds near $1,745 as Greece buys more time
SINGAPORE, Feb 8 (Reuters) - Gold prices were little
changed on Wednesday, after posting its biggest one-day rise in
nearly two weeks in the previous session, while investors
remained cautious as Greece again delayed making a decision on a
bailout package.
FUNDAMENTALS
* Spot gold edged up 29 cents to $1,745.19 an ounce
by 0041 GMT, after rallying 1.5 percent in the previous session.
* U.S. gold was nearly flat at $1,748.50.
* Greek political parties delayed again on Tuesday making
the tough choice of accepting painful reforms in return for a
new international bailout to avoid a chaotic default, seemingly
deaf to EU warnings that the euro zone can live without Athens.
* Though hopes for a deal helped send the euro to an
eight-week high against the dollar and lift commodities on
Tuesday, risk remains that the negotiations might collapse.
* Investors should be underweight equities while favouring
" selected commodities" such as gold and oil due to the fragile
state of the global economy and brewing geopolitical risks, said
Mohamed El-Erian, CEO and co-chief investment officer of bond
fund giant PIMCO.
MARKET NEWS
* U.S. stocks rose slightly on Tuesday, but with the outcome
of discussions on a bailout package for Greece uncertain,
investors are unlikely to make big bets in coming days.
* The euro was holding near a two-month peak in Asia on
Wednesday, as hopes that Greece was nearer a debt deal sparked a
broad short-covering rally and a pick up in risk sentiment.
DATA/EVENTS
0700 Germany Trade data Dec
0745 France Budget year-to-date
2350 Japan Money supply Jan
2350 Japan Machinery orders Dec
N/A UK BOE starts monetary policy meeting (to Feb. 9)
Closing Gold & Silver Market Report – 2/7/2012
by Craig C. Calvin February 7, 2012MORE DELAYS FOR GREECE PIMCO CEO FAVORS GOLD
Gold continued its rise this afternoon, ending the day up as the dollar fell. According to Jim Steel, precious metals analyst with HSBC, “We are showing a quite strong rally in the gold market.” Steel pointed to Fed Chairman Ben Bernanke’s statements to Congress today that continued to indicate more monetary easing is on the way, as well as the potential for an agreement on Greece’s debt issues, as reasons for the rally. The other three precious metals, Silver, Platinum, and Palladium, all ended the day in positive territory as well.
Another day, another delay for political leaders in Greece, who were supposed to meet today and hammer out the details on proposed cuts and reforms for that country. However, for the second day in a row, Greek Prime Minister Lucas Papademos has postponed the scheduled meeting of Greek political party heads, opting to instead meet with the “troika” of the European Commission, the European Central Bank, and the International Monetary Fund about the proposed 130 billion-euro bailout package Greece needs to avoid a default on its debt. The meeting is important because even though politicians in Greece have come to an agreement on making cuts equivalent to 1.5% of Greece’s GDP, there is still dissension on some of the measures required by Greece’s creditors as terms of the bailout. Patrick Legland, head of research at Societe Generale SA, had this to say: “It is clear we are going into another drama for Greece with many questions unanswered,”
With geopolitical turmoil threatening the global economy’s stability, one prominent investment officer is recommending that investors look to Gold and other commodities. In an interview given today, Mohamed El-Erian, the CEO and Co-Chief Investment Officer of global investment management firm PIMCO, stated that investors should be favoring “selected commodities” like Gold and oil, while staying underweight on equities. Despite recent promising economic data here in the U.S., El-Erian indicated that it was too early to " declare victory" and cited ongoing problems in Iran and Europe as areas to be concerned about. On the European debt crisis, El-Erian compared it to the collapse of Lehman Brothers that took place in 2008, warning of the effect a “Lehman Moment” in Europe could have on central banks. “If you define it as the economy being able to take the shock, that's in fact a higher risk because we are in a worse place than we were in '08.”
At 4:15 p.m. (CST), the APMEX precious metals spot prices were:
· Gold - $1,745.70 - Up $22.30.
· Silver - $34.21 - Up $0.40.
Morning Gold & Silver Market Report – 2/7/2012
By Ryan SchwimmerFebruary 7, 2012GREEK DRAMA, CHINA’S HOARDING OF GOLD CONTINUES
U.S. stock futures are trading lower this morning, as investors await Federal Reserve Chairman Ben Bernanke’s testimony before the Senate Budget Committee. Analysts are expecting a message similar to the one Bernanke gave to the House Budget Committee last week. UBS strategists said, “A more upbeat tone can be expected in the wake of the latest unemployment report.” Investors also are focusing on meetings in Greece between Prime Minister Lucas Papademos and party leaders. The goal, as it has been for months, is an agreement on austerity measures that will secure a second bailout for the struggling country.
The euro slipped earlier this morning but has since regained traction, pulling Gold with it. Gold neared $1,730 in overnight trading, then neared $1,710 earlier this morning, and has regained enough traction to settle right in the middle as of this writing. Late last year, China hoarded Gold in record amounts. In a note, UBS analysts wrote, “While December’s activity is the lowest since July, it’s still 245.2 percent higher year-on-year. Here’s a statistic that should lay to rest any doubts over Chinese Gold consumption: the 2011 trend of imports from Hong Kong was up 258 percent from 2010.”
Syrian forces have been attacking Homs, which had become a hub of rebellion against President Bashar al-Assad’s rule. Russia’s foreign minister reportedly told Assad, “Every leader of every country must be aware of his share of responsibility. You are aware of yours. It is in our interests for Arab peoples to live in peace and agreement.” Russia’s government holds weight in Syria as a major arms supplier for the country. Russia and China recently vetoed a U.N. resolution on Syria, but Russia contends it still wants to broker peace between the two sides in the Syrian crisis.
At 8 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,720.00 – Down $3.40.
- Silver - $33.51 – Down $0.31.
Gold eases towards $1,710/oz, all eyes on Greece
* Euro, stocks, commodities come under pressure
* Greek debt talks eyed after overnight session
* Platinum set to take support from supply issues (Updates prices)
By Jan Harvey
LONDON, Feb 7 (Reuters) - Gold prices eased towards $1,710 an ounce on Tuesday in line with a softening euro as traders awaited a breakthrough on talks over a second bailout deal for Greece, with its leaders fighting to avoid a chaotic debt default.
Spot gold eased 0.4 percent to $1,712.79 an ounce at 1210 GMT, while U.S. gold futures for February delivery were down $10.20 at $1,714.70.
While a retreat in stock markets and the euro kept gold under pressure on Tuesday, the precious metal still is up 10 percent so far this year after December's sharp drop, supported by a Federal Reserve pledge to maintain ultra-loose monetary policy.
The euro eased 0.2 percent versus the dollar. For Greece, failure to secure the 130 billion euro ($170 billion) rescue would mean it faces a messy debt default, which could destabilise the entire euro zone.
" Frankly I do not see the end of the tunnel as far as Europe, and especially Greece, is concerned," said Afshin Nabavi, head of trading at MKS Finance in Geneva. " I think a correction towards $1,706 (is) possible."
Safe-haven German government bond prices pushed higher, while investors fretted over Greek indecision on the strict terms of the bailout deal.
Prime Minister Lucas Papademos negotiated through the night with European Union and IMF lenders to 4 a.m. (0200 GMT), when a 24-hour national strike was about to begin, closing ports and disrupting public transport.
" Any deal to implement further austerity (will be) difficult, especially with a 24-hour strike starting today as workers protest at new austerity measures," said Michael Hewson, an analyst at CMC Markets.
" Politicians have one eye on a general election due in April. No one in Greece wants to be seen to be tightening the austerity noose even tighter for fear of being punished at the polls."
CHINA HOARDS GOLD
Hong Kong's shipments of gold to mainland China in 2011 more than tripled from a year earlier, confirming China's rapidly growing appetite for bullion, data released by the Hong Kong Census and Statistics bureau showed on Tuesday.
This came even though the gold flow from Hong Kong to China dropped about 62 percent in December on the month to 38,605 kilograms, its lowest level since July.
" The 38.6 tonnes shipped ... might be interpreted by some as gold-negative," said UBS in a note. " We, however, think the real outliers were shipments in October and November, which... were greatly in excess of previous months' volumes."
" And while December's activity is the lowest since July, it's still 245.2 percent higher year-on-year. Here's a statistic that should lay to rest any doubts over Chinese gold consumption: the 2011 trend of imports from Hong Kong was up 258 percent from 2010."
Among other metals, silver was down 1.1 percent at $33.26 an ounce, while spot platinum eased 0.5 percent to $1,613.49 an ounce, and spot palladium was down 1.5 percent at $692.73 an ounce.
Platinum narrowed its historically unusual discount to gold to less than $100 an ounce on Tuesday, from a record high of around $230 an ounce hit in January.
In a report, BNP Paribas lifted its 2012 and 2013 price forecasts for platinum-group metals, citing threats to output of the metal from South Africa and Russia, the chief producers of platinum and palladium respectively.
" We now expect platinum mined output to be flat in 2012, and to rise by 2.5 percent in 2013," it said. " Palladium output may contract by 1 percent in 2012 and increase by 2 percent the following year."
Platinum miners say work stoppages linked to safety and industrial action and operational issues such as power outages are curbing their ability to produce the metal.
South Africa's mines minister said on Tuesday that industry chief executives should be held liable for avoidable fatalities, also raising the possibility of court action. (Reporting by Jan Harvey editing by Jane Baird)
Gold snaps 2-day slide Greece eyed
* Spot gold recovers from 1-1/2-week low of $1,711.29
* Spot gold could fall to $1,696 -technicals
* Coming up: Germany industrial output, Dec 1100 GMT
By Rujun Shen
SINGAPORE, Feb 7 (Reuters) - Spot gold gained half a percent on Tuesday, snapping two straight sessions of losses, with investors waiting for the next development in Greece's debt restructuring talks as a new deadline looms.
Bullion fell to a 1-1/2-week low in the previous session when Greece postponed the decision on accepting painful terms for a new bailout until Tuesday.
Most markets were subdued, as investors were split over whether the wrangling over Greece would eventually be resolved or trigger contagion across other vulnerable euro zone countries.
Spot gold gained half a percent to $1,728.09 an ounce by 0713 GMT, off the 1-1/2-week low of $1,711.29 touched in the previous session.
U.S. gold edged up 0.3 percent to $1,730.60.
Although gold prices fell for two consecutive sessions, analysts and traders said gold's long-term bullish trend remains intact, supported by safe-haven demand amid a murky global economic outlook and hopes of monetary easing in the world's key economies.
" What we saw was a technical reaction after a solid run, after being in overbought territory, which coincided with the better-than-expected U.S. non-farm payrolls number," said Dominic Schnider, head of commodity research at UBS Wealth Management.
The surprisingly good U.S. jobs data knocked spot gold down nearly 2 percent on Friday, as it diminished hopes for fresh quantitative easing any time soon, but the ultra-loose monetary policy of the U.S. Federal Reserve will help boost gold in the long run, Schnider and other analysts said.
A key support level for gold would be $1,680, Schnider added.
Technical analysis suggested that spot gold could fall to
$1,696 during the day, said Reuters market analyst Wang Tao.
Major bullion bank HSBC said it was keeping its 2012 average
gold forecast at $1,850 an ounce due to accommodative global
monetary policies and investor jitters about financial markets.
Data showed that China's gold imports from Hong Kong in 2011
grew more than three times from a year earlier to 427,877
kilograms, even after a sharp drop in December's shipment.
The price decline in gold has attracted some buying in Asia,
including India and China, but in Japan investors stood on the
sidelines awaiting further trading cues.
" Everybody keeps watching what's going to happen, and we haven't seen any interest on either buying or selling," said an official at a large bullion house in Tokyo.
The discount for gold bars in Tokyo widened to 75 cents an ounce from 50 cents in mid-January, he added.
Gold to average $1,850/oz in 2012: HSBC
LONDON (Commdity Online): HSBC is maintaining its forecast for an average Gold price of $1,850 for 2012 and the anxieties about large and unsustainable government debt, easy monetary policies and mounting geopolitical risks.
“A shift in focus from eurozone sovereign debt to the U.S. and its fiscal problems in an election year may stimulate investor demand for gold,” HSBC added.
According to HSBC, the rising mine output, sluggish jewelry demand and a large scrap supply should curb but not reverse the Gold rally.
“A shift in central banks’ attitudes toward bullion, as they have become strong buyers of gold after decades as net sellers, is perhaps the single most important bullish development for the market since the creation of gold ETFs,” HSBC continued.
“We expect this to continue, as official sector demand should tighten supply/demand balances, which has positive ramifications for prices,” HSBC concluded.
Closing Gold & Silver Market Report – 2/6/2012
By Craig C. CalvinFebruary 6, 2012GREEK TRAGEDY BEFALLS STOCKS TAX HIKE ON THE HORIZON?
Prices for Gold dropped today in response to a rise in the dollar fueled by Greece’s lack of progress in coming to a bailout agreement. Along with other U.S. equities, Gold’s decline comes amid renewed worries that a Greek default could be in the offing and that debt contagion would spread to other European countries. Jason Schenker, president of Prestige Economics LLC, said, “The dollar’s up because of worries over Greece and optimism surrounding the U.S. economy after the jobs report. In the long run, there are still a lot of downside risks to the dollar.” Gold historically has a negative correlation with the U.S. dollar, increasing in value as the dollar’s value drops. Silver, Platinum, and Palladium prices ended the day down, as well.
U.S. stocks also dropped today, weighed down by concerns over the ongoing debt crisis in Europe and the continued failure of political leaders in Greece to come up with a definitive plan for avoiding a national default. After advancing for five weeks in a row, the Standard & Poor’s 500 Index was down by 0.1 percent Monday afternoon. S& P’s Banks Industry Group Index was down nearly 1.14 percent. The Dow ended the day down 0.13 percent. In an interview today, chief market strategist Stephen Wood of Russell Investments said, “It’s an ongoing Greek tragedy. We’re in the hands of the best efforts of European politicians. That’s a source of risk that’s difficult to forecast.” The S& P 500’s drop today comes in what had been the market’s best year-opening start in 25 years.
Last week’s unexpected improvement in jobs numbers could result in an equally unexpected tax increase for many U.S. citizens. Due to the better-than-expected employment figures released Friday, speculation is growing that lawmakers in Washington will find themselves in another battle over the payroll tax cut, as some politicians may be reluctant to agree to another extension. The last showdown over the tax cut in December ended with an extension almost failing to pass the House of Representatives, despite passing the Senate with bipartisan support.
At 4:10 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,720.80 - Down $18.00.
- Silver - $33.75 - Down $0.07.
Gold steady watches Greece development
SINGAPORE, Feb 7 (Reuters) - Gold held steady on
Tuesday, as investors remain focused on the development in
Greece's struggle with its debt crisis after Athens delayed its
decision on accepting the terms of a new bailout.
FUNDAMENTALS
* Spot gold was little changed at $1,718.59 an ounce
by 0041 GMT, after touching a 1-1/2-week low of $1,711.29 in the
previous session.
* U.S. gold edged down 0.2 percent to $1,721.50.
* Greece on Monday delayed its decision on whether to accept
the terms of a new bailout for yet another day. Failure to
strike a deal could push Greece into a chaotic debt default.
* Market participants are also awaiting a rate decision by
Australia's central bank later in the day. The Reserve Bank of
Australia is expected to further ease interest rates as the
Europe debt woes drag on.
* Major bullion bank HSBC said it was keeping its 2012
average gold forecast at $1,850 an ounce due to accommodative
global monetary policies and investor jitters about financial
markets.
* Platinum output in South Africa is likely to end up lower
than forecast this year due to snowballing labour and safety
stoppages, supporting metal prices but boosting costs for
producers and dampening share prices.
* Spot platinum lost 0.2 percent to $1,618.75, up
about 16 percent so far this year, after a 21-percent decline in
2011.
MARKET NEWS
* U.S. stocks closed slightly lower on Monday as lingering
questions about Europe's debt crisis and corporate earnings
overshadowed growing optimism about economic growth after a
five-week rally.
* The euro held steady in Asia on Tuesday as markets
remained sanguine that Greece will eventually clinch a rescue
package, even as the country's political leaders delayed their
decision to accept painful terms by yet another day.
DATA/EVENTS
Xstrata Plc earnings Q4
0330 Australia RBA cash rate Final Feb
1100 Germany Industrial output mm Dec 2011
1245 U.S. ICSC chain stores yy Weekly
2350 Japan Bank lending yy Jan
US unemployment down, is now the time to sell gold?
By Eric McWhinnie
On Friday, the U.S. jobless rate dropped unexpectedly in January to 8.3 percent, the lowest level since February 2009. According to the Labor Department, the economy added 243,000 jobs. Furthermore, today’s report includes revisions adding a total of 60,000 jobs to payrolls in November and December. The Labor Department also revised December’s gains to 203,000, from an initially reported 200,000.
The data comes one week after the Federal Reserve voiced concerns over the economy, but with the unemployment rate falling, doubt has been raised on how much additional easing the Fed will provide. As a result, Gold and Silver both declined more than 1 percent in morning trading. However, a closer look at the unemployment data reveals plenty to be concerned about. The labor force participation rate, which is the percentage of working-age persons in an economy who are employed or unemployed, dropped to 63.7 percent, its lowest level in 30 years. A record breaking 1.2 million people dropped out of the available labor pool used in the unemployment calculation. According to Zero Hedge, using the average long-term labor force participation rate of 65.8 percent, the real unemployment rate actually increased in January to 11.5 percent. In fact, the spread between the reported and implied unemployment rate just hit a fresh 30 year high of 3.2 percent.
Another concerning data point in the unemployment report is that the number of part-time workers is quickly rising, as many people are having to settle for employment opportunities. In January, the number of part-time workers surged by almost 700,000, representing the biggest jump on record. Meanwhile, full-time workers only increased by 80,000. If the unemployment picture was truly showing a great improvement and no need for further Fed action, Gold and Silver prices would most likely see a greater decline than what is taking place today. The decrease in the headline unemployment rate is welcomed, but it does not signal a stable economy. With sluggish economic growth and money-printer happy policy-makers, investors will continue to see a continuation of stimulus programs and deficits.
Kyle Bass, the Hayman Capital fund manger who correctly predicted the credit bubble, recently urged the second-largest U.S. college fund to keep its $1 billion investment in gold bullion. According to Bloomberg, Bass told the mangers of Texas’s state university endowment, “I’m against selling any of the gold.” He cited the need to hedge against government deficits in the United States and Europe. “As every day goes by, I see deflation in the things you own and inflation in the things you need.”
Earlier this week, the Congressional Budget Office said the U.S. is on pace for its fourth straight year of a $1 trillion-plus budget deficit. In its baseline scenario, the CBO projects that the 2012 federal budget deficit will be about $1.1 trillion, with unemployment remaining above 8 percent both this year and next. In January, the number of planned layoffs at U.S. companies also climbed to 53,486, its highest level in four months, and up 28 percent from 41,785 in December.
Source: wallstcheatsheet
SBSS 9. Gold Is The Gut Reaction, Silver Is The Smart Decision
Morning Gold & Silver Market Report – 2/6/2010
By Peter LaTonaFebruary 6, 2012GOLD, SILVER RETREAT ON RENEWED GREEK DEBT CONCERNS
For too many weekends in a row, the market has been led to believe that a deal was imminent betweenGreece and its private creditors. Today, another deadline has passed without a deal, and the European Union (EU) and the International Monetary Fund (IMF) are losing patience. French President Nicolas Sarkozy simply said, “We want an accord.” He continued, “Greece’s leaders have made commitments, and they must respect them scrupulously. … Europe is a place where everyone has their rights and duties. Time is running out. It needs to be concluded it needs to be signed.” If Greece fails to get bailout money from the EU and IMF, it could default, which could threaten the existence of the eurozone.
Iran continues to be in the news, as the world waits to see if Iran will react aggressively to tightening international sanctions. These sanctions are designed to shrink the Iranian economy, increase inflation and drive down the value of its currency. Two questions arise on these international actions. Will these measures actually be enough to deter Iran from pursuing its nuclear ambitions? Will they provoke Iran into taking harsh retaliatory measures? There has been much speculation of late that Israel may be planning an attack on Iran. In an interview with Matt Lauer on NBC yesterday, President Barack Obama indicated that Israel has not made up its mind, but the international community is mobilized in the event action is necessary.
At 8 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,717.10 – Down $21.70.
- Silver - $33.22 – Down $0.60.
Gold: Global supply threatens to fall
By Gregor Macdonald
Despite a recent recovery, Gold Bullion's production story mirrors that of oil. Recently published data from the US Geological Survey show that global Gold Bullion production, after falling every year between 2001 and 2008, finally rose for the past three years, writes Gregor Macdonald.
In 2011, production reached 2,700 metric tons. However, in a larger context, the past decade has been quite a poor one for the production of Gold Bullion. The compound annual growth (CAGR) rate has fallen well below the average of the past 110 years.
The high cost of marginal supply and the poor production performance of the large cap Gold miners fits in nicely to the theme. It also mirrors the experience of " Big Oil" the past decade, which has been unable to replace reserves with oil, and has increasingly turned to natural gas.
Much of the new production therefore is coming from smaller plays, and from the smaller mining companies. But whether a large array of smaller deposits can make up for the decline of the larger deposits—sustainably—is unclear. What's more certain however is that new supply is only possible with the new price range of gold, above, say, $1200 an ounce. As with oil, should price fall dramatically from here, supply too would quickly adjust downward.
Source: gregor