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* Physical buying picks up sentiment remains cautious
* Coming up: U.S. FOMC rate decision 1915 GMT
By Susan Thomas
LONDON, Dec 13 (Reuters) - Spot gold lifted off
seven-week lows on Tuesday as the euro recovered modestly and
equities steadied, but all gains looked vulnerable on the threat
of possible credit rating downgrades for euro zone nations.
Spot gold lost 0.1 percent to $1,663.14 an ounce by
1226 GMT after posting its biggest one-day drop in nearly three
months in the previous session. It touched $1,650.89 earlier,
its lowest since Oct. 25.
U.S. gold was off 0.04 percent at $1,667.60.
The euro recovered from a two-month low versus the dollar,
and European stocks were steady after sharp sell-offs on
disappointment about last week's " last ditch" EU summit to come
up with a clear plan to tackle the single bloc's debt crisis.
Short-covering helped the euro rebound modestly, but traders
said there was a clear bias to sell the single currency on any
bounce. A weaker euro makes gold priced in the U.S. dollar less
affordable for holders of the single currency.
" I suspect that the euro will remain under pressure," said
Citi analyst David Wilson.
" If we do get any sovereign downgrades this week, I suspect
the euro will be under even more pressure. It's difficult to see
short term what's going to lift gold."
Investors will closely watch for moves by the ratings
agencies. Moody's Investors Service said on Monday it intended
to review the ratings of all 27 members of the European Union in
the first quarter of 2012 after EU leaders offered " few new
measures" to resolve the crisis in a summit on Friday.
Standard & Poor's last week warned of a possible downgrade
of 15 euro zone nations. Italian and Spanish bond sales later
this week also are likely to provide a barometer of market
sentiment.
" It's all about anxiety and worry," said Nick Trevethan,
senior commodities strategist at ANZ in Singapore. " Gold is just
getting lumped in with other markets as risky assets, not
necessarily for the right reason."
Wild swings in gold prices since August have tarnished its
reputation as a safe haven, and bullion has moved in tandem with
riskier assets in the past few months.
" The bigger macro issues are still there, which would
generally be supportive for gold, but right now it's all about
the noise around the continued political failure in Europe,"
Wilson said.
PHYSICAL BUYING PICKS UP
SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, reported that its holdings dropped 0.605
tonnes to 1,294.796 tonnes by Dec. 12, the lowest in three
weeks.
Physical buying picked up in Asia after the sharp decline in
prices, but many were hesitant to buy in bulk ahead of the
year-end, especially while market sentiment remains fragile on
concerns about Europe's troubles, dealers said.
" We expect physical demand to return in some strength on
approach of $1,650," Standard Bank analyst Walter de Wet wrote
in a note to clients.
Key support for the metal lay at its 200-day moving average
at $1,617, he said.
" Since early 2009, gold has consistently bounced off its
200d MA. Unless funding issues in Europe deteriorate
substantially from current levels, we expect this support to
hold," he said.
Spot platinum rose 0.8 percent to $1,479.53 an ounce,
off a seven-week low of $1,476.23 hit in the previous session.
(Additional reporting by Rujun Shen in Singapore editing by
Jane Baird)
By Ryan SchwimmerDecember 13, 2011PHYSICAL COMMUNITY RESPONDS TO GOLD PULLBACK FED STATEMENT DUE TODAY After dipping in overnight trading, precious metals prices have recovered. Currently, Gold and Palladium are near yesterday’s closing prices, while Silver and Platinum are enjoying slightly larger gains. Monday’s price drop was the biggest in three weeks for Gold, and one analyst said that could be positive for prices today. UBS analyst Edel Tully said, “This pullback finally encouraged a response from the physical community.” Commerzbank AG’s Daniel Briesemann said his firm is “convinced that Gold can serve mid- and long-term as a store of value.”
The U.S. Federal Open Market Committee’s statement on monetary policy is due today, and expectations are that no changes will be made to the historically low interest rate range. An announcement regarding further quantitative easing (QE) is not expected, though hints may be dropped by the Fed in an attempt to calm market fears. Pierpont Securities chief economist Stephen Stanley said that with the improving U.S. economic data of late, the Fed is less likely to institute another round of QE. However, Stanley said the continuing development of the sovereign debt crisis in Europe will play a part in Fed decisions, as well.
A key indicator of economic sentiment in Germany ended a nine-month string of declines today. The Center for European Economic Research (ZEW) reported that economic sentiment rose 1.4 points in December in Germany. Mike Lenhoff of Brewin Dolphin said he expects mostly sideways trading in European stocks. He said, “We had a bit of positive news out of Germany this morning, but that’s Germany. And meanwhile, a good part of the eurozone is heading into recession for next year.”
At 8 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,666.20 – Up $0.10.
- Silver - $31.35 – Up $0.36.
Strong spot gold support at 1657.63,.. my bet today is for it to move up to 1680 level by tonight.
It looks set to run anytime now... just my view..
Indian Rupee at all time
Low of Rs. 53.51/$. It is believed that RBI intervenes currency market to
suppress Rupee if REER index approaches 105 & props Rupee up if REER gets
close to 95. REER above 100 indicates relative strength of the currency. REER
levels as on 25 Aug 2011 was of 117.01 implies that rupee is weaker compared
with the base year of 2004-05.
http://bhavikkshah.blogspot.com/2011/11/dollar-rupee-story.html
In 1973, Gold
held by US central bank was 8,584 tones & currency in circulation was $61
billion. Dividing the gold held by the currency in circulation, we get a ratio
of 140.2 for that year. i.e. 140.2 tones of gold were held per $1 billion of
currency in circulation. In the year 2007, US central bank held 8,133 tons of
Gold & the money in circulation was whopping $759 billion. The ratio comes
to 10.7 .i.e. only 10.7 tons of gold held per billion dollars in circulation.
If the US were to get back to the 1973 ratio of gold held per billion $ in
circulation, it would have to increase its Gold Reserve to whopping 1,07,153
tons from current 8,133 tons, an increase of more than 13 times in potential
demand. With the financial crisis not over yet, Central Banks like FED would
continue to inject more & more money into the financial system. Thus the
debasement of currency will continue, making real asset like GOLD & SILVER
more & more attractive as a hedge against reducing purchasing power &
loss of faith & confidence in paper currencies. We should thank GOD that US
does not have a printing press for Gold. The YELLOW metal may be the only
Savior of our wealth over longer term. That sure makes a case to buy GOLD. As
far as our INIDA is concern, India M3 supply as on July 16 2010 was...READ HERE
FOR MORE - http://bhavikkshah.blogspot.com/2010/06/one-should-always-buy-gold.html
By Craig C. CalvinDecember 12, 2011QE3 AT WHAT COST? Gold prices closed at a seven-week low today as the optimism investors felt last week gave way to the more familiar feeling of anxiety about Europe’s debt crisis. Michael K. Smith of T& K Futures expressed the opinion that investors are saying, “ ‘All right, let’s just get out and wait till next year,’ ” pointing to the warning by Moody’s that Europe’s sovereign debt could experience a downgrade in the first part of next year as a key factor. Silver, Platinum, and Palladium also experienced price drops today.
Speculation is growing that if the U.S. economy experiences another slowdown in 2012, the Federal Reserve will enact a third round of quantitative easing (QE). However, a new analysis from Inger M. Daniels of CitiGroup, indicates that if a “QE3” is enacted by the Fed, the cost would be between $700 billion to $1 trillion. According to Daniels’ analysis, QE3 would likely involve a purchase by the Fed of $700 billion in mortgage-backed securities, with the possibility of $300 billion of Treasuries, as well, in an effort to drive mortgage rates below their already historically low levels. In his research note, Daniels said, “We believe this level of purchases would align with the Fed’s stated goals of aiding borrowers while not allowing for egregious Fed concentrated ownership of the mortgage market.” The Federal Reserve is set to meet Tuesday, and although there haven’t been any clues about whether such monetary easing is being planned, the subject is almost certain to be discussed during the meeting.
The news out of Mumbai is that more and more people are investing in Gold bars, so much so that sales of those bars in India are exceeding sales of jewelry. According to traders, even some investors who had bought Gold just a couple of months ago are using their savings to buy the precious metal in bars and coins. Dinesh Jain with the All India Gems and Jewelry Trade Federation, said, “Many consumers are buying coins and bars these days, and we have registered a 30% to 40% increase in sales from September.” Although jewelry continues to be popular, many traders say that the because of the extra costs that come with crafting jewelry, investors are turning to bullion items such as bars.
At 4:06 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,667.00 - Down $47.80.
- Silver - $31.34 - Down $0.90.
* EU summit result disappoints debt crisis worry stays
* Hong Kong gold flow to China in Oct jumps 51 pct on month
* Coming up: U.S. Federal budget for November 1900 GMT
By Rujun Shen
SINGAPORE, Dec 12 (Reuters) - Gold prices fell more
than 1 percent on Monday on technical selling and concerns that
the European Union summit had stopped short of producing a
convincing plan to solve the euro zone debt crisis.
The approaching year-end and funding difficulties caused by
financial market turmoil have reduced liquidity in the gold
market, leaving prices prone to volatility. Spot gold prices
fell more than $10 in just two minutes.
Investors remained nervous even after Europe secured a
historic agreement on Friday to draft a new treaty for deeper
economic integration in the euro
zone.
" People are still worried about the economy and euro zone
debt crisis and gold remains under pressure," said Peter Fung,
head of dealing at Wing Fung Precious Metals in Hong Kong.
A stronger greenback also weighed on dollar-priced gold. The
euro slipped in Asia on Monday, and was expected to struggle
going into the year-end.
Spot gold lost as much as 1.7 percent to a two-week
low of $1,681.39 an ounce, and regained some lost ground to
$1,690.65 by 0735 GMT.
The most-active U.S. gold futures contract lost 1.7
percent to $1,688, before recovering to $1,694.70.
Traders said the price move below $1,700 triggered stop-loss
selling.
" On the technicals, we are heading for a triangular
formation. If we move lower, we'll break to the downside and
that is a bad signal," said Dominic Schnider, head of commodity
research at UBS Wealth Management in Singapore.
Gold from Hong Kong to mainland China jumped 51 percent on
the month to a record high of 85.7 tonnes in October, as buyers
took advantage of lower prices.
Silver slid along with industrial metals, losing more than 2
percent under the pressure of technical selling and an uncertain
euro zone economic outlook.
Spot silver fell to a 1-1/2-week low of $31.37 an
ounce, before trimming some losses to $31.51.
U.S. silver dropped 2.5 percent to $31.46, and
recovered to $31.59.
On this week's agenda, bond sales by Italy and Spain will
attract much attention from investors. Yields are likely to rise
again after the European Central Bank last week dashed hopes for
further bond purchases.
Prices of platinum group metals also weakened. Spot
palladium fell 1.5 percent to $673, and spot platinum
lost 0.8 percent to $1,499.75.
Demand for industrial metals will largely hinge on the
growth in China, the world's second-largest economy and top
consumer for many raw materials. Slower growth in China's
exports and imports in November showed fresh evidence of
faltering demand abroad and at home.
* Gold at three-week lows as dollar strengthens
* ETF holdings ease, but remain near record
* Coming up: German Dec ZEW economic sentiment Dec 13, 1000 GMT
By
Amanda Cooper
LONDON, Dec 12 (Reuters) -
Gold hit three-week lows on Monday, after a rise in the dollar prompted enough selling to push the bullion price through a key level of support, in spite of the persistent worry about the lack of a solution to the
euro zone debt crisis.
Last week's summit of European Union leaders yielded a historic agreement on beefing up fiscal discipline in the 27-member bloc, but fell short of market expectations for a more drastic solution to the crisis.
This lack of confidence in Europe pushed investors into the relative safety of the U.S. dollar, rather than gold, which has fallen by about 5 percent in the last week alone.
A stronger dollar often encourages non-U.S. holders of gold to sell the metal to lock in a higher profit in their own
currencies.
Spot gold was last quoted down 1.8 percent at $1,680.29 an ounce by 1215 GMT, having dropped by as much as 2.0 percent earlier to a low at $1,676.29 after breaking through $1,680.00, a major support line.
" Three or four months ago, people were pretty sure gold would end the year close to $2,000 or at least have a pop there and now that is looking unlikely with funding stresses and money market stresses and the dash for cash," Credit Agricole analyst Robin Bhar said.
" That is obviously dealing a blow to gold ... the next couple of days are going to be crucial technically for gold. Last week we were up at $1,760 and we have now lost $80 fairly quickly, that shows that rallies are difficult to sustain in this sort of environment."
There is continued evidence of investor demand for gold, as highlighted by the rise in speculative holdings of gold
futures, which last week rose by half a million ounces and by the swell in holdings of gold in exchange-traded fund products to record highs last week.
ETFS NEAR RECORD
In the last month, holdings at the largest gold-backed exchange-traded products have risen by nearly 1.2 million ounces, largely in response to concern over the slow progress in solving the euro zone debt crisis.
EU leaders agreed to lend up to 200 billion euros to the International Monetary Fund to help it aid euro zone strugglers, and to bring forward the permanent rescue fund European Stability Mechanism (ESM) by a year to mid-2012.
Those steps, together with a leveraged EFSF - the existing bailout fund - are intended to boost help for troubled euro zone countries, such as
Italy and Spain, the bloc's third- and fourth-largest economies, as they muddle through their refinancing crunches.
Rising peripheral bond yields and a falling euro showed investors were unconvinced this would be enough to put an end to the two-year old crisis.
" People are still worried about the economy and euro zone debt crisis and gold remains under pressure," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
On this week's agenda, bond sales by Italy and Spain will attract much attention from investors. Yields are likely to rise again after the European Central Bank last week dashed hopes for further bond purchases.
Prices of platinum group metals also weakened. Spot palladium fell 2.8 percent to $664.72 and platinum fell 1.3 percent to $1,491.74 an ounce.
Northam Platinum, one of South Africa's smaller platinum producers, said on Monday it was enduring frequent safety stoppages at its only producing mine where surprise government inspections were taking place.
Demand for industrial metals will largely hinge on the growth in
China, the world's second-largest economy and top consumer for many raw materials. Slower growth in China's exports and imports in November showed fresh evidence of faltering demand abroad and at home.
Silver, used in electronics, chemical and electrical applications, fell 2.9 percent to $31.28 an ounce. So far this month, the price has fallen by more than 4 percent, set for a second consecutive monthly decline. (Additional reporting by Rujun Shen in Singapore Editing by Alison Birrane)
by Peter LaTona December 12, 2011
Gold & Silver Prices Decline on Strengthening U.S. Dollar
Last week, investor’s tried to be optimistic about the European summit deal. On Friday, when officially announced, markets tried to remain positive, but the lack of substance sunk in over the weekend and confidence in the financial markets quickly began to wane. Britain made it clear that it wants no part of a plan that needs treaty changes that would force countries to give up some sovereign rights. In the end, there is still no plan and now 17 countries will all have to agree to the legal terms of a new treaty. French President Sarkozy expects to have a plan by March, but markets are skeptical. The euro is declining as a direct result of this failing confidence, so by default, the U.S. dollar is gaining in popularity as gold and silver prices move lower.
European events have been driving the financial markets of late, but an active week ahead might turn attention to the U.S. this week. The Federal Reserve Board meets on Tuesday, although no new action is anticipated. There are important economic reports coming out. Tuesday is the data from November’s retail sales. On Thursday, we have the weekly jobless claims and then Thursday and Friday, we have the producer and consumer inflation data. This week is also expected to be busy as historically, the weeks before and after Christmas is not.
At 8AM (CT) the APMEX precious metal prices were:
- Gold price - $1,672.60 - down $42.20
- Silver price - $31.16 – down $1.08
By Timothy OakesDecember 9, 2011MORE WINNERS THAN LOSERS AFTER EU SUMMIT Precious metals prices remained relatively steady through afternoon trading. The outlook brightened for Gold following the good news coming from Brussels, Belgium, after the latest EU summit, which is being considered a marginal success. The result of the summit seems to be a closer fiscal union and an agreement on new treaty provisions. “There is a greater correlation toward the end of the year as most commodities, including Gold, are headline-correlated. As investors begin to trade into the new year, Gold will climb higher with possible inflation growing,” said Carlos Perez-Santalla of PVM Futures.
The historical implications of the EU summit could have far-reaching effects, with some analysts suggesting that Napoleon Bonaparte imagined it, Charles De Gaulle fought for it, but French President Nicolas Sarkozy may have finally achieved what was considered impossible: the European nations whole with France in charge and Britain on the outs. “Of course, this is not just a long-standing desire, but a long-standing goal of French politics … because in the French tradition, Britain never really belonged to the European Union, dating back to De Gaulle,” said a senior EU official who attended the summit. The big loser is Great Britain. British leaders were not able to gather the support they thought they had from Poland and Denmark in rewording the treaty. Germany achieved its goals but may have lost a key ally (Great Britain) in keeping France in check, with their differing trade ideals.
Something that could be interesting to keep an eye on is the outlook of the countries seeking to join the EU, such as Croatia. All the debt crisis talk has tarnished some of the luster of the EU, but membership is still viewed as a boost to economic stability. Societe Generale Splitska Banka’s Zdeslav Santic said, “EU accession is the only real scenario for Croatia that can produce economic benefits, but also stability. … But I believe the Greek experience shows us best: The EU cannot solve your problems. You can enter the EU, but you must deal with weaknesses in the economy and fiscal sector first.”
At 4 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,713.30 – Up $1.90.
- Silver - $32.23 – Up $0.71.
SINGAPORE, Dec 9 (Reuters) - Gold prices edged up on
Friday, rebounding from their biggest daily decline in nearly
three weeks in the previous session, after the European Central
Bank dashed expectations of more aggressive bond purchases on
the eve of a key EU summit.
FUNDAMENTALS
* Spot gold edged up 0.3 percent to $1,712.09 an
ounce by 0021 GMT, on course for a fall of nearly 2 percent on
the week, its third week of losses in the past four.
* U.S. gold inched up 0.2 percent to $1,716.50.
* The European Central Bank cut its benchmark interest rate
by 25 basis points as expected, but dampened hopes for further
bond-buying, unnerving markets just before a crucial European
Union summit.
* European leaders agreed on new fiscal rules enshrining
tougher budget discipline on Thursday, an EU official said.
* Besides the EU summit, investors will watch a spate of
data out of China, including inflation, industrial output and
retail sales later in the day, besides preliminary trade figures
on Saturday.
* Commodity exchange traded products (ETPs) gathered the
most assets globally of any sector in November as investors
continued to shovel money into gold due to an intensification of
the eurozone debt crisis.
* The number of Americans filing new claims for unemployment
benefits dropped to a nine-month low last week, suggesting the
labor market's recovery was gaining momentum.
MARKET NEWS
* Wall Street fell on Thursday after the European Central
Bank dashed hopes that policy-makers were preparing a financial
" bazooka" to contain the debt crisis, and Germany rejected some
proposals to add power to the euro zone's bailout fund.
* The euro held steady on Friday, after staging its biggest
one-day loss against the dollar in the previous session, as the
European Central Bank disappointed the markets.
* Price set for 1.8 pct weekly fall after ECB
* ETF holdings steady near record bullish options bets up
* Palladium holds near three-month highs
By Amanda Cooper
LONDON, Dec 8 (Reuters) - Gold fell on Thursday after the head of the European Central Bank played down expectations that the central bank would dramatically increase the measures it is using to fight the debt crisis, thereby undermining the euro.
The ECB delievered a widely-expected quarter-point cut to bring its benchmark refinancing rate to a record low, yet central bank president Mario Draghi said the decision was not unanimous and would not be drawn on whether there would be more cuts.
European Union leaders also start a crucial summit on Friday that investors hope will deliver a comprehensive solution to the region's debt crisis, which now threatens the top-notch credit ratings of Germany and France.
Although the gold price has struggled to make upward progress this week, largely a function of a preference among investors to hold dollars, ETF holdings of metal are near record highs and a sharp increase in bullish options plays reflects a desire to hold bullion right now.
Lower euro zone rates and the ECB's commitment to provide banks with more favourable longer-term funding are, in theory, supportive of gold, although the central bank's lukewarm response to the crisis has left markets dismayed.
Spot gold was last bid at $1,713.80 an ounce by 1507 GMT, down 1.6 percent on the day and set for a 1.8-percent decline this week, as the weakness of the euro against the dollar has made it more attractive for European investors at least to sell assets priced in the U.S. currency.
" The rate cut and what has been said by Mario Draghi are pretty much in line with central expectations from much of the market. Broadly it is positive for gold: additional liquidity and easing but no big surprises no financial 'bazooka'," Tom Kendall, analyst at Credit Suisse said.
Gold can act as a safe-haven for investors in times of financial or economic uncertainty, but in cases of extreme risk aversion, where the desire for cash increases, it is also prone to the kind of sell-offs that hit stocks, bonds or currencies.
" This is big - a lot of people, stocks, bonds, currencies, had been counting on the ECB and (Draghi's) basically pulled the rug out from under the market," said Brian Dolan, chief strategist at Forex.com in Bedminster, New Jersey. " There's a sense of shock right now."
HOPE FOR THE EURO
Hopes for a definitive plan to tackle the two-year-old euro zone debt crisis were fading a day before the summit and expectations were dented further by pessimistic comments from a senior German official and new figures exposing deepening stress among Europe's banks.
" A final solution out of Europe is highly unlikely," Jeremy Friesen, Commodity Strategist at Societe Generale in Hong Kong, said, but added that a total breakdown was also unlikely as central banks and finance ministries have shown the will to cooperate to fight the crisis which is threatening to split up the euro zone and sink the global economy into recession.
" I don't expect Merkel or any hawkish decision-makers to squander this opportunity to really make reforms, now that they have come so far. I don't see them capitulating at this point."
A disappointing result from the summit could undermine the euro and send gold prices lower, at least initially.
ETF holdings of gold have risen to a record above 70 million ounces this week, while the options market shows a strong pick-up in call options, which give the holder the right but not the obligation to buy gold at a set price by a set date, at $1,800 an ounce.
Calls at $1,800 an ounce have risen by more than 3,000 lots, or 3 million ounces, in the last week, indicating a growing belief that the price could be trading above this level by the end of the year. < 0#GC+++>
In other precious metals, silver was quoted down 2.1 percent at $31.79 an ounce, while platinum was last down 1.3 percent at $1,500.49 an ounce.
Platinum is trading at its steepest discount to gold since Reuters began collecting data on the metal's price in 1985.
The price of platinum, which is used principally in jewellery and vehicle catalytic converters, is now more than $200 below the price of gold, highlighting the concern among investors over the impact on the global economy from the euro zone debt crisis.
Any jolt to consumer confidence can result in a drop in discretionary spending on luxury items such as jewellery or new cars, delivering a twin hit to platinum demand.
The market is expected to show a surplus this year of around 195,000 ounces, in contrast with last year's deficit of 25,000 ounces, when demand oustripped supply, according to refiner Johnson Matthey in a recent report.
Palladium was last down 1.3 percent on the day at $664.25 an ounce, having rallied sharply this week to its highest since September, when it hit one-year lows.
" Palladium continued to outperform its sister metal, platinum," HSBC analyst James Steel said in a note
" Market chatter revolved around supply tightness and Russian stockpile concerns. There have also been increases in fund purchases and option call buying recently, we believe," he said. (Reporting by Amanda Cooper Editing by William Hardy)
By Timothy OakesDecember 8, 2011ONE STEP FORWARD, TWO STEPS BACK AT EU SUMMIT Precious metals prices stabilized through afternoon trading, maintaining the lows reported in the Mid-Day Market Report. The news started good this morning with European Central Bank (ECB) President Mario Draghi’s announcement of a cut in interest rates, but hopes were quickly tempered when the ECB said it would not offer assistance in bond buying.
The ECB’s decision to cut interest rates and to not buy sovereign debt bonds has created a lot of fear in global and economic market. U.S. markets are following European markets quite closely. As soon as the meeting started today, a number of measures, including the European Stability Mechanism mentioned in yesterday’s Closing Market Report, were dismissed by German officials. Germany and France are at the forefront and had much to say today. German officials dismissed a number of plans as soon as the meeting began. French President Nicolas Sarkozy said, “Never has the risk of Europe exploding been so big.” German Chancellor Angela Merkel had her own words to offer as well: “The euro has lost credibility, and this must be won back. We will make clear that we will accept more binding rules.” All the talk and initial negativity had economists concerned. Scotia Capital economist Alan Clarke said, “One step forward, two steps back. … The eurozone leaders might as well not bother. Pack their bags, go home, enjoy the weekend and do their Christmas shopping.”
At 4:13 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,708.10 – Down $34.70.
- Silver - $31.72 – Down $0.90.
watch video December 07, 2011 • 18:46:33 PST
The symbol is g-o-l-d. That is what I prefer to hold. Both the euro and the dollar are long-term undesirable currencies... read more
SINGAPORE, Dec 8 (Reuters) - Gold inched lower on
Thursday, tracking a slightly weaker euro, as investors await a
rate decision from the European Central Bank later in the day
before the region's leaders gather on Friday to find ways to
resolve a mounting debt crisis.
FUNDAMENTALS
* Spot gold inched down 0.3 percent to $1,736.44 an
ounce by 0030 GMT, after two consecutive sessions of gains.
* U.S. gold lost 0.2 percent to $1,741.40.
* All eyes are on a policy meeting of the European Central
Bank later today, and the bank is expected to cut rates and
unveil a new plan of bank aid.
* France and Germany are to sound out conservative European
leaders on Thursday about their plan to defuse the euro zone's
debt crisis, eager to rally support before a high-stakes EU
summit on Friday.
* But pessimistic comments from EU paymaster Germany and new
figures exposing deepening stress among Europe's banks dented
financial market hopes of a turning point in the euro zone's
debt crisis at the summit.
* Standard & Poor's warned on Wednesday that it could cut
the credit ratings of the European Union and large euro-zone
banks if a mass downgrade of euro-zone countries materializes.
MARKET NEWS
* The euro struggled to make much headway in Asia on
Thursday, continuing to consolidate ahead of an expected
European Central Bank (ECB) rate cut decision and a crucial EU
leaders summit.
* Hopes the euro zone will figure out a solution to its
ongoing debt crisis inspired enough buying to push U.S. stocks
to a third day of gains on Wednesday in light trading.
* Market cautious ahead of EU summit, ECB meeting
* Euro drops as Germany expresses pessimism on Europe deal
* Gold holds just under 100-day moving average
By Amanda Cooper
LONDON, Dec 7 (Reuters) - Gold edged higher on Wednesday, driven by a pickup in the euro and by a rise in exchange-traded fund holdings to record highs, although caution ahead of a crucial European Union summit this week will likely limit gains in the bullion price.
European Union leaders meet on Friday and are under pressure to provide a lasting solution to the debt crisis which now threatens the finances of the entire 17-member bloc.
Ratings agency Standard & Poor's shocked markets on Tuesday by putting the credit ratings of all euro zone members, including those of Germany and France, under review, meaning a downgrade could materialise within 90 days.
Weakness in the euro can make it more profitable for euro zoneinvestors to sell gold in exchange for dollars. This week's 0.4 percent decline in the euro has coincided with a rise in ETF holdings of gold to a fresh record above 70 million ounces.
Spot gold rose 0.5 percent to $1,735.74 an ounce by 1459 GMT, set for a second consecutive day of gains.
" Such a big unknown event risk is making people quite cautious and, heading into year-end as well, no one really wants to take any positions and it adds to that lack of interest in the market," Standard Chartered analyst Daniel Smith said.
" My assumption would be that the summit would end up being slighty disappointing and therefore, base metals will do relatively badly and gold will do relatively well on the back of fresh safe-haven flows," he said.
The EU summit comes against the backdrop of mounting expectations that leaders will take steps to forge greater fiscal integration in the bloc, while the ECB is expected to cut its benchmark interest rate for the second month running.
An environment of loose monetary policy tends to benefit gold, which bears no yield of its own, thus enabling it to compete for investor cash against bonds or stocks, which can return less when interest rates decline.
" For the moment gold is likely to trade with the rest of the commodity sector and the short-term outlook depends on what we hear from the summit," said Eugen Weinberg, head of commodity research at Commerzbank.
" But hopes are already so high that it is likely that some will be disappointed."
DIFFICULT WEEK AHEAD
Gold hit a record $1,920.30 in September and is trading up almost 22 percent in the year-to-date. On Wednesday it held below its 100-day moving average at $1,727.73, and analysts reckon events this week could test the precious metal's resilience.
" Gold has rallied a bit, but it's failing to sustain that rally and I think the key is we have to wait and see what happens on Friday," said Walter de Wet, analyst at Standard Bank.
Although gold is regarded as a safe haven asset to shield investors in times of uncertainty, it has increasingly become prone to pressure from the wider financial market, moving in tandem with other risk-linked assets as crumbling confidence in stocks, bonds and currencies makes investors keener to get hold of cash.
Spot silver slipped 0.5 percent to $32.59, while platinum slipped 0.4 percent to $1,513.25 an ounce.
The gold-platinum spread widened to $220 an ounce on Tuesday, its widest since Reuters started recording prices in 1985.
Platinum has traded at a discount to gold for the past three months - the longest period since 1985, as the metal, mainly used in jewellery and autocatalysts, has lost some of its appeal to investors in the current environment of economic uncertainty.
Flows of metal into ETFs, which were robust earlier in the year, have turned into outflows in the last three weeks, bringing total holdings of platinum in the major ETFs tracked by Reuters to their lowest in a year.
Spot palladium rose 1.3 percent to $675.50. The palladium price has rallied by nearly 30 percent since hitting one-year lows in September. (Additional reporting by Harpreet Bhal editing by William Hardy)
* Physical market trade thin premiums steady
* Gold-platinum spread widens to about $200/oz
* Coming up: German industrial production, Oct 1100 GMT
By Rujun Shen
SINGAPORE, Dec 7 (Reuters) - Gold traded steady on
Wednesday with many investors moving to the sidelines ahead of a
key European Union summit this week where policymakers are
expected to find a way to end the region's two-year-old debt
crisis.
Investors were also cautious after ratings agency Standard &
Poor's fired a second warning shot at the euro zone in 24 hours,
threatening to cut the credit rating of its financial rescue
fund.
In recent months gold's safe-haven appeal has been
tarnished, and the precious metal has been tracking riskier
assets as the turmoil in financial markets has squeezed funding
and forced investors to close profitable gold positions to cover
losses elsewhere.
The euro inched higher and the dollar index edged
down, as investors await the EU summit and a rate decision by
the European Central Bank on Thursday.
Asia's bullion market remained muted, dealers said.
" No one wants to hold stockpiles ahead of the year end and
the market is extremely quiet," said Dick Poon, manager of
precious metals at Heraeus in Hong Kong.
" Physical demand may pick up at the end of the month or
early January, as jewellers prepare for the Lunar New Year."
Premiums on gold bars in Hong Kong were steady in the range
of 50 cents to $1.50 an ounce above spot prices, dealers said.
Spot gold was little changed at $1,728.99 an ounce by
0654 GMT, flirting around the 100-day moving average at just
below $1,728.
U.S. gold edged up 0.1 percent to $1,733.80.
" Everyone is waiting for the results from the many meetings
in Europe this week," said Peter Fung, head of dealing at Wing
Fung Precious Metals. " Prices are likely to remain in the range
of $1,710 to $1,750 for now."
Household spending and exports kept the euro zone's economy
alive in the third quarter, the EU said on Tuesday, but
collapsing confidence points to a recession and probably gives
the ECB ground for another interest rate cut.
Spot platinum gained 0.6 percent to $1,529.49 per
ounce, bouncing from a 1-1/2-month low of $1,494.35 hit in the
previous session.
The gold-platinum spread widened to $204 an ounce
on Tuesday, its widest since Reuters started recording prices in
1985, and remained around $200.
Platinum has been at a discount to gold for the past three
months -- the longest period since 1985, as the metal, mainly
used in jewellery and autocatalysts, lost its attraction during
the global economic downturn.
By Timothy OakesDecember 7, 2011GERMANY RAINING ON PARADE WHAT IS ISRAEL DOING?During afternoon trading, Gold has been relatively stable in price. In a note to investors, ANZ analysts wrote, “If European leaders manage to come up with a plan, we will likely see a relief rally in the euro, which will take Gold higher with it.”' Platinum continues to run at a discount to Gold over the past three months, which is the metal’s longest disparity since 1985. Palladium supply concerns have the metal on the rise, reaching an 11-week high today.
Some comments by German officials and new economic figures have taken a lot of the allure or hope of resolution off the upcoming EU summit. An anonymous German official said, “I have to say today, on Wednesday, that I am more pessimistic than last week about reaching an overall deal. … A lot of protagonists still have not understood how serious the situation is. … My pessimism stems from the overall picture that I see at this point, in which institutions and member states will have to move on many points to make possible the new treaty rules that we are aiming for.” U.S. Treasury Secretary Timothy Geithner, following his meeting with the French Finance Minister Francois Baroin, said, “I have a lot of confidence in what the president of France and the minister are doing, working with Germany to build a stronger Europe.”
Israel’s lack of direction involving Iranian military action has many U.S. government officials worried what action Israel could take toward Iran. The U.S. prefers sanctions and diplomatic intervention. U.S. officials have a “sense of opacity” regarding what Israel could do militarily to Iranian nuclear sites. “I don't think the administration knows what Israel is going to do. I’m not sure Israel knows what Israel is going to do. … That's why they want to keep the … bad guys guessing,” said U.S. Sen. Carl Levin, D-Mich., chairman of the Senate Armed Services Committee. Republican John McCain of Arizona corroborated that view, saying, “I'm sure they (administration officials) don't know what the Israelis are going to do. They didn't know when the Israelis hit the reactor in Syria. But the Israelis usually know what we’re going to do.” The unintended consequences of military action against Iran from a known ally could make the U.S. a possible target of military retaliation.
At 4:10 p.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,744.10 – Up $14.30.
- Silver - $32.58 – Down $0.15.
SINGAPORE, Dec 7 (Reuters) - Gold edged up on
Wednesday, together with equities, with investors cautiously
optimistic ahead of a key European Union summit later this week
where policymakers are expected to find a way to end the
region's two-year-old debt crisis.
FUNDAMENTALS
* Spot gold edged up 0.1 percent to $1,729.89 an
ounce by 0020 GMT.
* U.S. gold also inched up 0.1 percent to $1,734.
* Standard & Poor's fired a second warning shot at the euro
zone in 24 hours, threatening on Tuesday to cut the credit
rating of its financial rescue fund as European leaders raced to
find a political solution to their sovereign debt crisis.
* European leaders will discuss boosting the firepower of
the euro zone rescue fund at this week's summit, the Financial
Times reported on its website on Tuesday, citing senior European
officials.
* Household spending and exports kept the euro zone's
economy alive in the third quarter, the EU said on Tuesday, but
collapsing confidence points to a recession and probably gives
the European Central Bank ground for another interest rate cut.
MARKET NEWS
* U.S. stocks rose on Tuesday as investors bet European
leaders would take strong steps this week to end the region's
debt crisis, including bolstering its financial rescue fund.
* Asian shares and the euro inched up on Wednesday on hopes
that warnings of mass credit rating downgrades will push
European leaders into coming up with a convincing framework for
resolving the euro zone debt crisis at a crucial summit later
this week.
DATA/EVENTS
0030 Australia GDP yr/yr Sep
0900 Italy Industrial output yy WDA Oct
1100 Germany Industrial output mm Oct
2000 N.Zealand Cen Bank Interest Rate
2350 Japan Bank lending yy Nov
* S& P warns mass downgrade for euro zone countries
* Market cautious ahead of EU summit, ECB meeting
* Strong German industrial orders helps euro rebound
By Harpreet Bhal
LONDON, Dec 6 (Reuters) - Gold fell to its lowest in nearly a week on Tuesday, hit by persistent fears about Europe's debt crisis after Standard & Poor's warned it could downgrade euro zone nations if no concrete plan to tackle the crisis emerges at a summit this week.
The rating agency's warning it might downgrade 15 countries including Germany and France came hard on the heels of a Franco-German initiative to enforce budget discipline across the 17-member zone through EU treaty changes.
Spot gold fell 0.9 percent to $1,705.70 an ounce by 1509 GMT, extending a 1.4 percent drop in the previous session. It earlier fell to its lowest level in nearly a week at $1,703.79 an ounce.
U.S. gold shed 1.5 percent to $1,708.10.
Investors will keep a close eye on an EU summit on Friday in Brussels, where the focus will be on new rules to tighten fiscal integration. Analysts say a summit that falls short could lead to a harsh market reaction that could force a rapid reappraisal by policymakers.
" The ranges are tight in the market and people will be closely watching what happens on December 9. Patience will be seriously tested and if the market doesn't get what it expects people will start to close positions, Georgette Boele, global head of FX and commodity strategy at ABN Amro said.
" We are also seeing a cutback on positioning because the year has been very volatile and people are less and less willing to take on big positions going into the year-end."
Helping to limit the fall in gold, the euro pared losses against the dollar after data showed German industrial orders in October posted their strongest reading in 19 months. .
A weak dollar makes commodities priced in the U.S. unit cheaper for holders of othercurrencies.
Although gold is regarded as a safe haven asset to shield investors in times of uncertainty, it has increasingly become prone to pressure from selling in the wider financial market, moving in tandem with other assets as investor sentiment remains fragile.
ECB EYED
Investors are also likely to keep a close eye on a European Central Bank (ECB) meeting on Thursday, when the bank is expected to cut its main interest rate for the second month running, taking it back to a record low of 1.0 percent or lower if the bank decides a 50 basis point cut is needed.
Australia's central bank cut interest rates by a quarter point to 4.25 percent on Tuesday as tamer inflation at home allowed it to take out some policy insurance against the debt crisis engulfing Europe.
Monetary policy easing raises the inflation outlook and benefits gold, seen as a good inflation hedge.
" Apparently, $1,750 is a tough resistance to break. The market is in need of strong fundamental impetus to break above this mark. Thursday could provide such an impetus as the ECB will meet for its policy meeting," Credit Suisse analysts said in a note.
" Ahead of the ECB meeting, we think sideways trading is the most likely outcome."
Trading volumes were also expected to decline because many traders have closed books to lock in profit before the end of the year, reducing liquidity in the market and increasing the volatility.
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, were unchanged at 1,297.929 tonnes by Dec. 5, just below a near four-month high of 1,298.534 tonnes hit on Nov. 30.
Silver slipped 0.8 percent to $31.78 an ounce, while palladium was down 1.8 percent at $641.47. Platinum fell 1.1 percent to $1,499.49 an ounce. (Editing by Jane Baird)
