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Gold hits session low after U.S. industrial output data
Nov 16 (Reuters) - Gold prices fell 1.15 percent to a session low of $1,760.49 an ounce on Wednesday, after data showed U.S. industrial output rose more than expected in October, suggesting the economy was gaining steam.
Spot gold was trading at $1,760.59 by 1435 GMT from $1,781 late in New York on Tuesday.
* Euro-priced gold outpaces stocks, bonds in November
* Gold in dollars set for first weekly loss in a month
* ETF flows positive, options market signals less bullishness
By Amanda Cooper
LONDON, Nov 16 (Reuters) - Gold eased on Wednesday under pressure from the weakness in the euro, which fell even though the European Central Bank eased some of the pressure on the government bond market, as alarm escalated over the spreading debt crisis.
The European Central Bank stepped into the bond markets to stem an accelerating sell-off in euro zone government bonds, traders said, after the United States called for more decisive action to halt the spread of the crisis.
Gold fell broadly, dropping in most of the major currencies, although the euro price of bullion was one of the better performing crosses, trading almost unchanged on the day near one-month highs above 1,300 euros an ounce.
So far this month, gold in euros has outperformed Bund futures, European benchmark equities, the trade-weighted euro and peripheral euro zone debt.
Gold priced in dollars was last down 0.5 percent on the day at $1,772.99 an ounce by 1255 GMT, set for its first weekly decline in five weeks.
" The euro zone crisis isn't going to carry on like this for another three months, it will come to some resolution, but it's hard to know what it means for gold," said Mitsubishi analyst Matthew Turner.
" It could be bullish if the ECB starts money-printing, but it could be bearish if there is another flight to cash," he said.
Gold, which has risen by nearly 15 percent since hitting a two-month trough in late September, has benefited from investor demand for gold in the current market turmoil, but has struggled against the headwind of a stronger dollar.
The amount of metal held by exchange-traded funds has risen by 966,000 ounces in the last month, while U.S. futures data shows speculators have raised their holdings of gold futures < 0#GC:> by nearly 1 percent, or 1.8 million ounces, in this time.
" The continued ETF support is encouraging, and underscores the renewed confidence in the gold market," Walter de Wet, a precious metals analyst at Standard Bank, said in a note.
" Our strategic view remains unchanged: gold will push higher in 2012 with a target of $2,000 in the first quarter of 2012."
Hedge fund manager John Paulson, the largest investor in the SPDR Gold Trust, the biggest gold ETF, cut his stake in this ETF by a third in the third quarter of this year, although analysts said he may have shifted his investment in bullion to physical bars.
ELEMENT OF DOUBT
There is an element of doubt in parts of the investment community that the gold price will be able to break above this year's record $1,920.30 an ounce, especially given the potential for worsening money-market conditions to prompt a sell-off by cash-hungry institutions.
The largest overnight change in open interest in COMEX gold derivative contracts that expire next week emerged in bullish call options -- which given the owner the right, but not the obligation to buy an asset at a pre-determined price by a set date.
Open interest fell by nearly 2,700 lots, representing 270,000 ounces of metal, on just seven contracts of call options with strike prices ranging from $1,780 to $2,200.
Investors tend to favour gold during times of financial or political uncertainty because of its safe haven properties, although bullion has moved in close correlation with riskier assets recently, as harried investors liquidate gold positions to cover losses elsewhere.
France came under heavy fire in global markets on Tuesday, reflecting fears that it is being sucked into a spiralling debt crisis.
Italian bond yields rose back above 7 percent, a level seen as unsustainable, and Spanish bond yields hit a 14-year high.
" That tells you that things are not OK," said Dominic Schnider, head of commodity research at UBS Wealth Management in Singapore. " It will give gold some support, although the dollar is putting some pressure."
The euro clawed back from one-month lows against the dollar after the ECB was seen defending Italian and Spanish debt from a renewed sell-off.
In other precious metals, silver was last trading down 0.6 percent at $34.32 an ounce, while platinum was down 0.7 percent on the day at $1,626.24 an ounce and palladium was down 1.3 percent at $651.60. (Additional reporting by Rujun Shen in Singapore Editing by Alison Birrane)
* Worries surface that France might be dragged into debt
crisis
* Spot gold could rise to $1,829 - technicals
* Coming Up: U.S. Oct industrial output 1415 GMT
By Rujun Shen
SINGAPORE, Nov 16 (Reuters) - Gold prices fell as much
as 1.1 percent on Wednesday, tracking the euro lower on fears
the euro zone debt crisis could spread to France, the bloc's
second-largest economy, while Greece and Italy battle to save
their economies.
People favour gold during economic and political turmoil
because of its safe haven allure, although bullion has moved in
close correlation with riskier assets recently, as harried
investors liquidate gold positions to cover losses elsewhere.
France came under heavy fire in global markets on Tuesday,
reflecting fears that it is being sucked into a spiralling debt
crisis.
Italian bond yields rose back above 7 percent, a level seen
as unsustainable, and Spanish bond yields hit a 14-year high.
" That tells you that things are not OK," said Dominic
Schnider, head of commodity research at UBS Wealth Management in
Singapore. " It will give gold some support, although the dollar
is putting some pressure."
Spot gold fell 1.1 percent to $1,761.74, but
recovered to $1,768.10 by 0706 GMT. U.S. gold also
dropped 1.1 percent, and regained some lost ground to $1,769.80.
Technical analysis suggested that gold could rise to $1,829
an ounce during the day, said Reuters market analyst Wang Tao.
Investors are watching the European Central Bank for
potential bond buying action to help the heavily indebted euro
zone states.
" This decision will come up in the first quarter when a huge
amount of maturing debt will need to be financed," said
Schnider, adding that large bond purchases would help boost gold
prices.
Asia's physical gold market lacked excitement, as bullion
prices were trapped in a tight range over the past few days.
" The dollar strength has weakened local currencies, which
has tempered buying interest," said a physical dealer in
Singapore.
Gold priced in Indian rupees rose to a record of 90,537.13
rupees per ounce this week, while dollar-denominated gold
languished about 8 percent below its record of $1,920.30 hit in
early September.
Palladium will show its biggest market surplus in four years
in 2011, as sales of Russian stocks and disinvestment outweigh
record autocatalyst demand, while a rising supply of platinum
will outpace Chinese jewellery demand and industrial consumption
this year and next, according to refiner Johnson Matthey.
SINGAPORE, Nov 16 (Reuters) - Gold prices edged down
on Wednesday, tracking a lower euro on fears the euro zone debt
crisis could spread to France, the bloc's second-largest
economy, while Greece and Italy struggle to save their
economies.
FUNDAMENTALS
* Spot gold edged down 0.2 percent to $1,778.09 an
ounce by 0016 GMT.
* U.S. gold also inched down 0.2 percent to
$1,779.50.
* France came under heavy fire in global markets on Tuesday,
reflecting fears that the euro zone's second biggest economy is
being sucked into a spiralling debt crisis.
* The euro zone economy grew just 0.2 percent in the third
quarter as solid growth in Germany and France was dampened by
countries at the sharp end of the debt crisis and economists
expect a slide into recession by early next year.
* Hedge fund manager and long-time gold bull John Paulson's
move to slash ETF bullion holdings by a third does not appear to
be a sign he is abandoning his upbeat view of the metal,
industry sources and analysts said.
* Palladium will show its biggest market surplus in four
years in 2011, as sales of Russian stocks and disinvestment
outweigh record autocatalyst demand, while rising supply of
platinum will outpace Chinese jewellery demand and industrial
consumption this year and next, according to refiner Johnson
Matthey.
* Spot palladium gained 0.2 percent to $661.49, about
23 percent below this year's high at nearly $860 hit in late
February.
MARKET NEWS
* U.S. stocks rose on Tuesday, boosted by swift steps toward
formation of a new Italian government and stronger-than-expected
reports on the U.S. economy.
* The euro was being slowly eroded in Asia early on
Wednesday, having suffered two straight days of declines as the
euro zone debt crisis threatened to engulf top-rated members
such as France.
Buy gold on every dip: Kaushal Jaini
ET Now Nov 14, 2011, 03.03pm IST Gold up 2% previous week, how would you trade the metal this week?
Gold is on an upside and we expect the upside to continue from here. We expect around 1900, the previous level to be retested in the coming future. So every dip could be a good buying opportunity level until 1720 holds on the international level, gold could continue on an upside because we still are uncertain about the events happening in the economic zone and there is serious bad news on UK too. On the Indian continent, we expect around 30000 levels and maybe beyond that. So yes, gold is on buying spree and any major correction could trigger a buying opportunity. Gold on the Indian continent is only negative until it closes below 28200. Till then, the positive bias will be intact.
bsiong ( Date: 16-Nov-2011 22:57) Posted:
future looks bright, buy on dip.
tanglinboy ( Date: 16-Nov-2011 07:34) Posted:
| bsiong, talk to me brother... do you think gold will continue to rise?
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future looks bright, buy on dip.
tanglinboy ( Date: 16-Nov-2011 07:34) Posted:
| bsiong, talk to me brother... do you think gold will continue to rise?
|
|
bsiong, talk to me brother... do you think gold will continue to rise?
by Ryan Schwimmer November 15, 2011
EUROPEAN SITUATION FRAGILE GEOPOLITICAL TENSION CONTINUES
Gold is trading down this morning, shadowing the expected slump of U.S. stocks due to the euro zone debt crisis. The ongoing fears over the debt problems in Europe has been contagion. Before Greece, there was Ireland, Portugal, and Greece again. The recent, second bailout of Greece was intended to stop such contagion, but that has not gone as planned. The critical 7% yield level for government bonds was breached by Italy last week, and Spain’s government bonds are creeping dangerously close to that level, at 6.25%. Analysts from Deutsche Bank seem to believe that the next step is printing more money. They wrote, “We remain in a fragile situation where, without the European Central Bank, the euro-area bond markets as we know them could collapse within days, and where if they suddenly decided to step up operations, they could give the market a huge lift.”
With all the focus recently on financial crises, another factor that affects precious metals prices, geopolitical tension, has been pushed off the front page. The conflict in Syria continues, with at least 69 more people killed Monday in clashes between troops loyal to President Bashar al-Assad and army deserters. The U.S. Army’s exit from Afghanistan doesn’t mean that country’s problems are over, as Afghans search for “the people’s voice.” Iran is suspected to be seeking nuclear arms capability, and experts aren’t convinced that international action will deny the Middle Eastern country the means to make a bomb.
Dominic Schnider of UBS AG said, “Gold is definitely a store of value and still very attractive for asset managers,” referring to hedge funds such as Soros Fund Management LLC and Paulson & Co. “Given the reality of the debt situation in Europe, the need to hold real assets remains a top priority,” he said. While Schnider was referring to the “big boys,” even small investors can be managers of their own assets.
At 8 a.m. (CST), the APMEX precious metals spot prices were:
- Gold - $1,773.30 – Down $7.10.
- Silver - $34.33 – Up $0.27.
Nov 15 (Reuters) - Gold pared losses to trade higher on Tuesday, in the wake of better-than-expected U.S. retail sales data and as the dollar slightly trimmed gains, although caution about the euro zone's debt crisis kept further gains in check.
Spot gold hit a session high at 1,785.39 an ounce, before trading at $1,783.10 by 1453 GMT, up 0.1 percent from $1,779.89 late in New York on Monday. (Reporting by Harpreet Bhal Editing by Alison Birrane)
* Euro falls vs dlr,
Italy 10-yields back above 7 pct
* Hedge fund manager Paulson cuts bullion holdings
* U.S. retail sales rise more than expected in Oct
By Harpreet Bhal
LONDON, Nov 15 (Reuters) -
Gold slipped on Tuesday, hit by a sell-off in financial markets and a drop in the euro against the dollar, with persistent doubts about Europe's ability to tackle its growing debt crisis prompting investors to remain cautious.
Although gold is regarded as a safe haven asset to shield investors in times of uncertainty, it has increasingly become prone to pressure from sell-offs in the wider financial market, moving in tandem with other risky assets as investor sentiment remains fragile.
Spot gold fell 0.5 percent to $1,771 from $1,779.89 late in New York on Monday, having earlier traded as low as $1,760.04 an ounce.
Italian bond yields rose back above 7 percent and yield spreads of French, Austrian and Belgian 10-year bonds over German Bunds marked euro-era highs, underscoring the challenges facing Europe in containing its debt crisis.
Reflecting caution in the market, European shares and base metals fell while the euro slipped against the dollar. A stronger dollar makes commodities priced in the U.S. unit more expensive for holders of other
currencies.
" Gold is behaving like a risk asset in the short-term and is moving lower with all the other risk assets," Ross Norman of Sharps Pixley said.
" It (gold) has had a significant move up on the year and we could be seeing some profit taking as we approach the end of the year."
In Italy, Prime Minister-designate Mario Monti met the president after ending talks with Italy's parties, political sources said, in a possible indication he is close to forming a new government.
In an indication of the effects of the debt crisis on growth, the 17-nation euro zone economy grew a modest 0.2 percent in the third quarter from the second, lifted by
France and Germany, but slowing export growth and stagnating consumer demand point to a likely contraction soon.
In the United States, retail sales rose more than expected in October as strong receipts from motor vehicle and building material dealers offset the drag from service stations.
U.S. gold fell 0.4 percent to $1,772.30 an ounce.
Gold hit a record around $1,920 in September on worries about a growing debt crisis in Europe and is trading more than 24 percent higher in the year to date.
" It is most likely that bullion would continue in dull trading here with players squaring their book before year-end," VTB Capital analyst Andrey Kryuchenkov said in a note.
" We can only see very moderate gains should the broader market push higher, while much would still depend on where the EURUSD heads in the next month."
Hedge fund manager and long-time gold bull John Paulson slashed his bullion holdings by a third in the third quarter, data showed, cutting holdings in the SPDR Gold Trust to 20.3 million shares from 31.5 million at the end of the second quarter.
Holdings of the largest gold-backed exchange-traded fund (ETF), New York's SPDR Gold Trust dropped 0.03 percent from Friday to Monday, while that of the largest silver-backed ETF, New York's iShares Silver Trust remained unchanged for the same period.
Money managers, including hedge funds and other large speculators, increased their bullish bets in gold
futures and options during the week of Nov. 8, as the price of bullion rallied to a seven-week high above $1,800 an ounce, data showed.
In other precious metals, silver edged up 0.2 percent to $34.27 an ounce. Platinum fell 0.5 percent to $1,629.74 an ounce and palladium fell 0.3 percent to $657,97 an ounce.
Johnson Matthey Co, the world's top supplier of catalytic converters, said that palladium prices could climb higher and that investors would be net buyers in 2012 after they sold an estimated 215,000 ounces in 2011. (Editing by Alison Birrane)
SINGAPORE, Nov 15 (Reuters) - Spot gold prices traded
little changed on Tuesday, as investors unnerved by an Italian
bond auction focused on the scope of the task faced by new
governments in Italy and Greece in keeping the region's
sovereign debt crisis under control.
FUNDAMENTALS
* Spot gold was little changed at $1,778.64 an ounce
by 0016 GMT.
* U.S. gold edged up 0.1 percent to $1,780.60.
* Italian government bonds yields rose on Monday as relief
over the appointment of a new head of government in Rome gave
way to concerns over the size of the task still facing
policymakers trying to tackle the euro zone debt crisis.
* German Chancellor Angela Merkel said Europe could be
living through its toughest hour since World War Two as new
leaders in Italy and Greece rushed to form governments and limit
the damage from the euro zone debt crisis.
* Money managers, including hedge funds and other large
speculators, increased their bullish bets in gold futures and
options during the week of Nov. 8, as the price of bullion
rallied to a 7-week high above $1,800 an ounce, data showed.
MARKET NEWS
* U.S. stocks fell on Monday as rising bond yields in Italy
and other euro-zone countries reminded investors that despite
changes in governments, the region's debt crisis could still
spin out of control.
* The euro held steady on Tuesday, after sliding against the
dollar in the previous session as new governments in Italy and
Greece failed to ease fears about the euro-zone sovereign debt
crisis.
DATA/EVENTS
0700 Germany GDP flash yy Jul
1000 EZ Eurostat trade nsa, EUR Sep
1000 EZ GDP flash estimate yy Jul
1000 Germany ZEW economic sentiment Nov
1245 U.S. ICSC chain stores yy Weekly
1330 U.S. PPI inflation yy, NSA Oct
1330 U.S. CPI Oct
1330 U.S. Producer prices mm Oct
1330 U.S. Retail sales mm Oct
1500 U.S. Business inventories mm Sep
China FDI (ytd) Nov
By Stephanie ChandlerNovember 14, 2011NEW GERMAN POLICY SUPPORTS ALLOWING COUNTRIES TO EXIT EUROPrecious metals prices have remained relatively steady in afternoon trading. Stock markets around the world rose on news of a 6% jump in Japan’s economy as it finally starts to show signs of recovery after the devastating earthquake and tsunami earlier this year. Some people have voiced belief that the shift in power in Greece and Italy represents a major step toward solving the European debt crisis. On the other hand, there are many others who have said that while Greece is “fixable,” Italy is too big to bail out. Tom Kaan of Louis Capital Markets in Hong Kong said, “I am not very optimistic. All those who think the euro has stabilized or that Europe has stability, I think they are wrong. The risk is still very much out there.”
Many hedge fund managers and financial analysts fear that even if all goes well in Greece and Italy, we would not be out of the woods yet. These investors and analysts are planning on continued market volatility and a prolonged recovery. James Paulsen, chief market strategist at Wells Capital Management in Minneapolis, said, “For ‘traders,’ the world has certainly changed and the new higher-risk environment needs to be recognized and trading strategies appropriately altered.” Savita Subramanian, Bank of America Merrill Lynch’s equity and quantitative strategist, said, “Investors hoping for a respite from a volatile and correlated market may be disappointed. Europe is expected to experience a mild recession in 2012, and the U.S. policy looms large, as we expect another credit downgrade, government spending cuts and continued tax uncertainty.” In lieu of the uncertainty, TrimTab’s Charles Biderman recommends clients hold hard assets to help them protect against the volatility of the markets.
An important preliminary vote today by German Chancellor Angela Merkel’s Christian Democratic Union party endorses a resolution that supports a policy that allows countries to leave the euro and retreat to their own currencies so as to help keep the euro strong. The resolution now awaits the assent of Merkel’s coalition partners before becoming policy. The German policy’s main priority would be to allow countries the freedom to exit the currency for the betterment of all involved. Finance Minister Wolfgang Schaeuble said, “We’re not throwing anybody out … but if a country can’t carry the burden or doesn’t want to carry the burden -- and the Greek people have to carry a heavy load -- then we have to respect the country’s decision.” This would allow the embattled countries to print their own money, thus devaluing their currencies to lighten their burden.
At 4 p.m. (CST), the APMEX precious metals prices were:
- Gold price - $1,783.10 – Down $7.00.
- Silver price - $34.27 – Down $0.45.
Is it too late to buy gold?
by Peter LaTona November 14, 2011
Could Europe Face Its Worse Hour Since WWII –
The U.S. stock futures are looking to open weaker on continued concerns in Europe. Precious metals prices have drifted lower as well. Last week, gold prices briefly went over $1800 per oz before backing down.
German Chancellor Angela Merkel came out today and said that Europe could be facing its toughest hour since WWII. Greece and Italy both have new leaders, but this in itself solves no problems. Both new leaders have to rush to form new governments and then form a coalition to stave off the damage of its escalating debt problems. " Europe is in one of its toughest, perhaps the toughest hour since World War Two," Merkel told her conservative party in Leipzig. " If the euro fails then Europe fails, and we want to prevent and we will prevent this, this is what we are working for, because it is such a huge historical project," Merkel said. Investors continue to look for decisive action coming out of Italy, Greece or even other Eurozone leaders.
On CNBC this morning, Warren Buffet stated that although he looks at European sovereign debt every day, he is not buying nor is he buying Eurozone banks. Mr. Buffet stated that it is still far from certain whether Europe has the will or the ability to solve its crisis. Italy did manage to sell its full amount of five-year bonds today, but they were forced to offer a yield that was a euro lifetime high. The five year bond offered a gross yield of 6.2%, while back in October at a similar auction they went for 5.3%.
At 8AM the APMEX precious metals prices were:
- Gold price - $1,784.70 – down $5.40
- Silver price - $34.54 – down 18 cents
* Gold eases as safe-haven bid for dollar rises
* ETF holdings see largest weekly rise since Aug. 5
* Goldman Sachs says stay long in bullion
By
Amanda Cooper
LONDON, Nov 14 (Reuters) - Gold fell on Monday, under pressure from a stronger dollar, which gained after initial optimism over the ability of Italy and
Greece to tackle their debt burdens gave way to caution.
Decent demand for Italian bonds was not enough to provide the European equities market with relief, while German Bund prices recovered from session lows.
Yields on the benchmark 10-year Italian bond eased this week, having last week broken above the 7-percent " danger zone" that analysts widely believe makes the cost of servicing Rome's debt burden unsustainable.
Gold priced in euros edged above 1,300 euros an ounce, nearing last week's one-month highs, while gold priced in dollars was down 0.6 percent at $1,777.19 an ounce by 1243 GMT, under pressure from a 0.6 percent rise in the U.S. currency.
" I get the feeling there is a dribbling-in of money into gold," Credit Agricole analyst Robin Bhar said, adding that while the price was vulnerable to corrections, ultimately, evidence seemed to point to ongoing demand for bullion.
" Speculative positioning is probably winning out against everything else and if we can move from where we are now, we may see a rally higher, then it probably is worth going long, maybe through some portfolio diversification and ETF buying. That all seems to be playing into it."
The U.S. options market shows most investors are positioned for a rise in the gold price to $2,000 an ounce or beyond by the end of this year.
U.S. investment bank Goldman Sachs said on Monday it was maintaining a long position in gold based on its expectation for U.S. interest rates to remain low for longer than originally anticipated.
" We expect gold prices to continue to climb in 2011 given the current low level of U.S. real interest rates. Further, with our U.S. economics team now forecasting slower U.S. economic growth in 2011 and 2012, we expect U.S. real interest rates to remain lower for longer, supporting higher gold prices through 2012," Goldman Sachs said in a note.
NO SOLUTION YET
Although
Italy and Greece have embarked on a painful journey towards solving their debt problems, the euro zone debt crisis is nowhere near an end, which could support long-term gold prices.
" In the longer term there is still a lot of uncertainty, such as the many challenges Italy faces as to how the new government will implement harsh reforms," said Ong Yi Ling, an analyst at Phillip Futures. " The overall backdrop remains supportive of safe haven demand in general."
Highlighting investor demand for gold in light of the uncertainty surrounding Europe, flows of metal into bullion-backed exchange-traded funds staged their largest weekly rise in more than two months last week.
Global holdings of gold in ETFs increased by nearly 897,000 oz last week to 68.854 million ounces and November is shaping up to show the largest monthly inflow since July, with a net inflow of 947,000 so far this month.
Physical market activity in Asia was muted, after last week's 2 percent rise in the price sidelined buyers, dealers said. Premiums in Hong Kong and Singapore were little changed from last week.
Platinum was the top performing metal among the precious complex, with a 0.5 percent gain on the day that took the price to $1,643.49 an ounce. So far this month, the platinum price has risen by nearly 3 percent to near two-month highs.
Palladium reversed earlier gains to fall 0.2 percent on the day to $653.85 an ounce, while silver fell 0.8 percent to $34.33 an ounce.
* Renewed confidence in euro zone fuels risk appetite
* Spot gold targets $1,820 -technicals
* Coming Up: Italy Treasury auctions
By Rujun Shen
SINGAPORE, Nov 14 (Reuters) - Gold traded steady on
Monday, as changes in the political leadership in Italy and
Greece rekindled hopes for a resolution to the euro zone's debt
crisis, fuelling risk appetite in markets.
Equities and commodities rose after Italy and Greece rushed
to form new governments to save the indebted nations from
bankruptcy and fend off a wider financial meltdown in the euro
zone.
Italy's new Prime Minister Mario Monti will face the first
test of confidence when the Treasury auctions up to 3 billion
euros of government bonds later today, after yields spiked to
unsustainable levels at an auction last week.
" The change in political leadership is calming the financial
markets," said Ong Yi Ling, an analyst at Phillip Futures,
adding that confidence in the new leaders could fuel risk
appetite and push bullion higher.
Spot gold was little changed at $1,788.49 an ounce by
0653 GMT, after rising nearly 2 percent last week.
U.S. gold inched up $2.4 to $1,790.50.
Technical analysis suggested spot could target $1,820 during
the day, said Reuters market analyst Wang Tao.
Although Italy and Greece have embarked on a painful journey
towards solving their debt problems, the euro zone debt crisis
is nowhere near an end, which could support long-term gold
prices.
" In the longer term there is still a lot of uncertainty,
such as the many challenges Italy faces as to how the new
government will implement harsh reforms," said Ong of Phillip
Futures.
" The overall backdrop remains supportive of safe haven
demand in general."
Activities on the physical market were muted, as buyers shy
away from higher prices, dealers said. Premiums in Hong Kong and
Singapore were little changed from last week.
" We see very light volume today. Gold could test $1,800
soon, while the $1,750 level provides good support," said a Hong
Kong-based dealer.
Platinum group metals led the rise in the precious metals
complex. Spot platinum gained 0.8 percent to $1,647.75,
and spot palladium rose 0.9 percent to $661, tracking
strong gains in prices of industrial metals.
SINGAPORE, Nov 14 (Reuters) - Gold edged up on Monday,
extending gains from the previous session, as new governments in
Italy and Greece rush to combat the debt crisis, soothing
investor fears.
FUNDAMENTALS
* Spot gold gained 0.4 percent to $1,793.69 an ounce
by 0008 GMT, building on a rise of nearly 2 percent last week.
* U.S. gold also inched up 0.4 percent to $1,795.20.
* Italy's president appointed former European Commissioner
Mario Monti on Sunday to head a new government charged with
implementing urgent reforms to end a crisis that has endangered
the whole euro zone.
* Greece's new prime minister Lucas Papademos will seek to
take advantage of a rare political truce on Monday to push
through austerity and radical reform aimed at restoring the
country's tattered credibility and staving off bankruptcy.
* Investors will closely watch the result of Italy's bond
auction later in the day, after yields spiked to a dangerous
level last week.
* For the top stories on metals and other news, click
, or
MARKET NEWS
* The euro and commodity currencies gained ground in Asia on
Monday as investors cheered Europe's progress in tackling its
debt problems, but traders remained wary as Italy prepares to
test market appetite with a bond sale.
* U.S. stocks jumped on Friday, ending higher for the week
after the Italian senate's approval of economic reforms gave
investors some relief from worries about the euro zone's debt
crisis.
The public is ignorant of Gold's worth at a time when Euro is dying
NEW YORK (Commodity Online): The failure of the Eurozone and the European monetary union looks increasingly likely. This has incredible political, economic and monetary implications for the world and could Lead to shockwaves akin to or surpassing that seen after the collapse of the Soviet Union.
Merkel has called for changes in EU treaties and French President Nicolas Sarkozy advocated a two-speed Europe in which euro zone countries accelerate and deepen integration while an expanding group outside the currency bloc stays more loosely connected -- a signal that some members may have to quit the euro.
Given the scale of the crisis, we continue to amazed at the lack of animal spirits in the Gold market – both from media coverage and from public participation.
The majority have no idea of the ramifications of these momentous geopolitical developments. The public knows the developments are negative but most are resigned to their fate and many are like deer in the headlights failing to join the dots and realize the ramifications for their investments, savings and financial wellbeing.
As we have said for some time ETF buyers are primarily long term diversifiers in nature and not speculative ‘hot’ money likely to flee the gold market on signs of weakness. Much of the ETF buying is from institutions including pension funds who are diversifying their portfolios with very small allocations to the Gold trust.
Bullion dealers in western markets continue to see demand but demand is nowhere near the levels seen at the height of the Lehman crisis or even towards the end of gold’s sharp rise to over $1,900/oz in August.
The public is nowhere near the gold market and the majority of people in the western world could not tell you the price of gold today – let alone how to buy it. The mainstream, non financial specialist, media continues to cover gold sporadically at best.
Price falls tend to be headline news rather than price gains.
Much of the buying we are seeing is from existing precious metal buyers choosing to sell existing precious metal type investments such as ETFs and digital gold in order to own physical bullion.
Given the significant counter party risk seen in the world, as graphically illustrated by MF Global, more buyers are choosing to take delivery or opting for personal allocated accounts with legal title to the bullion which is in their name
This position is understandable given massive counter party risk due to the risk of corporate, banking and national bankruptcies.
