Gold Ends Higher as Bargain Hunting Ensues
MarketWatch
Gold futures ended higher Monday, shaking off initial weakness as bargain hunters snapped up the metal after sharp weekly losses and other commodities as well as U.S. equities also posted gains.
Gold for April delivery added $11.50, or 0.7%, to settle at $1,667.30 an ounce on the Comex division of the New York Mercantile Exchange.
“A lot of it has to do with bargain hunting,” said Rohit Savant, an analyst with CPM Group in New York. The lower prices after a weekly route enticed investors back, he added.
Gold lost 3.3% the previous week as mostly upbeat U.S. macroeconomic data cut down on the metal‘s safe haven appeal.
Market participants are “cautious after volatility in the past week and with few macro numbers today. We expect some more consolidation at the start of the week,” analysts at VTB Capital said in a note to clients Monday.
Money managers cut their net long positions, or bets gold will go higher, for the second week in a row, according to data released Friday by the Commodity Futures Trading Commission.
Money managers “can be seen as partly responsible for the recent decrease in the price of gold ... What is more, we may also see a weakening of physical demand,” analysts at Commerzbank said in a note to clients.
India last week decided to raise import duties on gold for a second time, and the Bombay Bullion Association has expressed demand concerns for gold in India, recently surpassed by China as the world’s largest consumer of the metal.
The association expects the rise in gold prices with the higher duties will see imports plummet 35% this year, as quoted by Commerzbank. In contrast, local gold retailers expect the increase in duties to have virtually no impact on demand.
“Lower physical gold demand could block any renewed climb in price,” Commerzbank analysts said.
Other metals posted gains, with silver turning positive around mid-session and settling 1.1% higher.
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Gold Futures Rebound From Lowest in Five Weeks Amid Optimism for Greece
Bloomberg
Gold rebounded from a five-week low amid renewed optimism that Greece will be able to tame its debt crisis and as a report showed increased U.S. hiring.
Investors with holdings amounting to at least 58 percent of the Greek bonds eligible for the nation’s debt swap have indicated they’ll participate, moving the country closer to the biggest sovereign restructuring in history. U.S. companies added 216,000 workers last month, according to data based on payrolls from ADP Employer Services. Yesterday, gold declined to $1,663.40 an ounce, the lowest since Jan. 25.
“There is some positive news out there for the economy, and that is helping gold,” Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Some investors are back after the big fall.”
Gold futures for April delivery gained 0.7 percent to settle at $1,683.90 at 1:59 p.m. on the Comex in New York. Prices retreated 2.9 percent in the previous three sessions.
Bullion dropped below its 200-day moving average yesterday for the first time since mid-January. Falling below the measure, currently at about $1,674, can be a bearish signal to some investors follow historical price patterns.
“The metal remains vulnerable to further pressure in the short term,” James Moore, an analyst at TheBullionDesk.com in London, said in a report.
Silver futures for May delivery gained 2.4 percent to $33.585 an ounce in New York. Yesterday, prices slid to $32.49, the lowest since Jan. 25. Still, it’s the best-performing precious metal this year, with a gain of 20 percent.
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Gold Ends at Highest Level in More than Two Weeks
MarketWatch
Gold futures rallied Tuesday, ending at their highest point in more than two weeks as traders cheered the approval of a second bailout for Greece.
Gold for April delivery advanced $32.60, or 1.9%, to end at $1,758.50 an ounce on the Comex division of the New York Mercantile Exchange. It had traded as high as $1,752.50 an ounce.
The settlement was gold’s highest since Feb. 2.
“Gold right now is behaving like a risk asset more than anything else,” tracking gains for U.S. equities and other commodities, said Frank Lesh, a broker and futures analyst with FuturePath Trading in Chicago.
U.S. markets were closed Monday for the Presidents Day holiday.
After a marathon meeting into the early hours of Tuesday, European finance ministers sealed a deal to give Greece up to 130 billion euros ($171.9 billion) of financial aid.
Other metals tracked gold higher, with copper and silver rallying. Copper for March delivery advanced 13 cents, or 3.5%, to settle at $3.84 a pound.
Metals also benefitted from news that China cut reserve requirements for lenders in an effort to spur lending and increase liquidity in its financial system. China is a top consumer of gold, copper and other commodities.
That was “good news for gold in the long run as bullion remains an attractive alternative to major currencies. Real interest rates are negative in major developed nations while developing nations are also playing their part in currency wars, fearing rapid appreciation of their domestic currencies against weak benchmarks,” analysts at VTB Capital in London wrote in a note to clients.
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Gold Adds More Than $10 to End Losing Streak
MarketWatch
Gold futures log their first gain in four sessions Wednesday, as rising tensions between Iran and Israel as well as ongoing uncertainty over Greece’s debt problems buoyed the metal’s safe-haven appeal.
“The time is limited to avoid spreading the euro-zone debt crisis from Greece to countries with a larger economic impact, such as Portugal, Spain and Italy, [and] most of the efforts have been to contain the crisis,” said Jeff Wright, a precious-metals analyst with Global Hunter Securities.
Gold for April delivery rose $10.40, or 0.6%, to settle at $1,728.10 an ounce on the Comex division of the New York Mercantile Exchange. Prices had tallied a three-session decline of more than $23 an ounce.
European Union officials may delay parts or all of the second bailout program for Greece until after expected April elections in that country, according to a Reuters report.
“The situation in Europe is causing huge global uncertainties,” said David Beahm, vice president at precious-metals retailer Blanchard & Co.
“Even if Greece’s problems are solved, there are three or four more countries that are on the verge of needing the same type of help,” he added. “The problem is no one has the money to help, therefore the [European Central Bank] is going to have to print billions of euros to fight the debt problems Europe is facing.”
At the same time, “the geopolitical issues in the Middle East, specifically between Iran and Israel, are supporting the price of gold as well,” Beahm elaborated. “Gold is acting as a safe haven for what could be a situation that gets way out of control.”
China factor
Gold’s gains Wednesday came as Asian and European markets got a lift after Gov. Zhou Xiaochuan of the People’s Bank of China voiced optimism that Europe can overcome its sovereign-debt crisis and said that China will expand investments in the euro zone.
“If events spiral out of control, even with [People’s] Bank of China intervention, I can see how the euro currency dissolves or the more stable Northern European countries allow for a controlled default by Greece, Portugal and Spain,” said Global Hunter Securities’ Wright.
“While these events would strengthen the U.S. dollar and negatively impact gold in the short run, gold will continue to appreciate over the long term,” he added.
Gold also found support in advance of U.S. inflationary data due out Thursday and Friday, according to Wright.
He expects a continuation of the trend, seen in December at the producer level, showing signs of initial inflationary pressure. The “real impact will come when inflation hits CPI; gold will turn sharply higher on signs of price inflation.”
Silver gains
Silver futures also advanced in Wednesday’s Comex trading, finding support from upbeat U.S. manufacturing data. March silver SI2H +0.16% tacked on 6 cents, or 0.2%, to close at $33.41 an ounce.
The Empire State manufacturing index rose to a reading of 19.5 in February, its highest since June 2010, according to the Federal Reserve Bank of New York. The size of the February gain surprised analysts.
Separately, the Federal Reserve reported that U.S. manufacturers boosted output in January, though industrial production as a whole was unchanged.
“Silver is both a precious and industrial metal, with over 60% of demand for industrial applications, [meaning] positive signals for economic growth provide a leg up for silver,” said Wright. “Also, silver has not seen the same level of attention which gold has in the past couple quarters and should not be ignored.”
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Gold Closes Higher On Weak Dollar, Greek Deal
Nasdaq
Gold futures closed higher on Thursday, as the dollar slumped against most major currencies after Greek politicians agreed to an austerity deal for a second bailout package from international lenders.
Gold for April delivery, the most actively traded contract, closed up $9.90 or 0.6 percent at $1,741.20 an ounce on Thursday. The precious metal traded at an intraday high of $1,755.50 an ounce and a low of $1,728.30 an ounce.
The dollar edged lower for a third straight day versus the euro, touching its lowest in more than two months as Greece finally reached a deal on austerity measures.
The euro traded at $1.3292 on Thursday, up from $1.3264 late Wednesday. The euro reached a 2-month high of $1.3321 in intraday trading after European Central Bank President Mario Draghi announced the Greek austerity measures deal.
The dollar index, which tracks the U.S. unit against six major currencies, dropped to 78.549 on Thursday from 78.589 in late Wednesday trade.
In economic news, first-time claims for U.S. unemployment benefits showed a notable decrease in the week ended February 4, according to a report released by the Labor Department on Thursday, with the data likely to add to recent optimism about the labor market.
The report indicates initial jobless claims dropped to 358,000 from the previous week's revised figure of 373,000. Economists expected jobless claims to edge up to 370,000 from the 367,000 originally reported for the previous week. The less volatile four-week moving average declined to 366,250 from the previous week's revised average of 377,250.
Elsewhere, the European Central Bank left its key interest rate unchanged for the second month in a row, as widely expected. The rate on the marginal lending facility was held at 1.75 percent, while the deposit facility rate was kept at 0.25 percent.
Meanwhile, the Bank of England left its rates unchanged at a record low of 0.50 percent and lifted the size of quantitative easing by GBP 50 billion to GBP 325 billion, in line with economists' expectations.
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Gold Fluctuates, Trades 10% Higher on Month
MarketWatch
Gold futures swung between small losses and gains Tuesday, finding some support as a rosy technical picture enticed more investors to the metal, but pressured by strength in the U.S. dollar.
Gold for April delivery was up $1.10, or 0.1%, to trade at $1,735.50 an ounce on the Comex division of the New York Mercantile Exchange. The metal traded as high as $1,750.60 an ounce.
“We dropped quickly (from there) on the change-around in the euro,” said Jim Steel, a precious metals analyst with HSBC in New York.
The euro turned lower after a string of negative U.S. data.
The dollar turned higher midsession. The ICE dollar index rose to 79.319 from 79.142 in late Monday trading in North America.
U.S. home prices slid 1.3% in November, a third straight drop. A gauge of consumer confidence slipped in January, partly reversing gains in the last two months. Read more on consumer confidence.
Gold had slipped by $1 on Monday on the back of a strengthening dollar.
Gold took “a short breather” Monday, analysts at Commerzbank said in a note to clients.
On the month, gold is looking at gains around 10%, after also ending last year 10% higher.
European Union officials have agreed on a permanent bailout fund and on a fiscal compact but “many details remain unresolved,” Commerzbank analysts said. “The southern countries of the euro zone also seem to have pushed through exemptions allowing them some leeway with the fiscal compact and under certain circumstances to circumvent the rules.”
Pressure continues on Greece, the International Monetary Fund, and private creditors to agree on a restructuring and a new bailout program.
“Even though the situation is now easing slightly and sentiment is improving, the crisis is far from over. This is likely to maintain a high level of demand for gold in particular,” the Commerzbank analysts added.
Technically, gold is also gathering more interest as it moves through some key technical levels such as higher moving averages, said George Gero, a vice president with RBC Wealth Management, in emailed comments on Tuesday.
Other precious-metals futures turned lower, as negative U.S. macroeconomic data contributed to take the wind out of stocks’ sails and, by extension, of other commodities such as oil and metals more closely linked to industrial uses.
Gold Edges Higher as Dollar Slips
MarketWatch
Gold clawed back a bit of lost ground early Tuesday as the U.S. dollar eased and profit-taking subsided.
Midday Tuesday in East Asia, gold for April delivery was trading up 0.2%, or $4, at $1,738.40 an ounce, rising from its Monday settlement of $1,734.40 an ounce on the Comex division of the New York Mercantile Exchange.
Monday had seen the benchmark Comex gold contract slip by $1 on the back of a strengthening dollar.
But the dollar lost ground during Asian morning trade, with the ICE dollar index slipping to 78.878 from its 79.142 level late Monday in North America.
Commodity researchers at Commerzbank pegged Monday’s losses to investors locking in recent gains following gold’s seven-week high at the end of last week.
They added that there was still “a risk of more profit-taking from ... if market sentiment deteriorates,” with risks including weak demand from major gold importer India.
Among other precious-metals futures, Comex March silver contracts followed gold higher, rising 9 cents, or 0.3%, to $33.62 an ounce.
April platinum rose 0.5% to $1,624.90 an ounce, while March palladium added 0.4% to $691.00 an ounce.
March copper was little changed, however, holding at the $3.83-per-pound level from its New York settlement after falling 1.6%, or 6 cents, on Monday.
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Gold May Rise to $1,600 an Ounce This Year on Investor Demand, GFMS Says
Bloomberg
Gold will rise as much as 13 percent this year to a record $1,600 an ounce, extending a rally that began in 2001, as investors boost demand for the metal as an inflation hedge, said researcher GFMS Ltd.
Prices in New York touched an all-time high of $1,478 on April 11 amid speculation that governments will keep borrowing costs near record lows to revive economic growth, increasing the risk of accelerated costs for consumers. Total gold demand rose 0.4 percent to 4,334 metric tons in 2010, the third straight gain, according to an annual report from GFMS.
“The prospects for gold prices this year remain bright,” GFMS Executive Chairman Philip Klapwijk said in a statement. “Investors continue to be concerned about the outlook for inflation, with governments in general showing little appetite to tighten monetary policy significantly.”
Gold, the most-widely-traded precious metal, rallied 25 percent in the past year to $1,453.60 yesterday as the Federal Reserve kept the benchmark U.S. interest rate at zero to 0.25 percent since December 2008 in a bid to pull the economy out of recession. Last week, the European Central Bank raised the main borrowing cost 25 basis points to 1.25 percent.
Investment in exchange-traded funds backed by the metal rose 18 percent to 2,177 tons in 2010, and buyers increased purchases of gold bars, coins and jewelry, according to GFMS.
Demand for physical gold bars rose 66 percent last year to a record 880.5 tons, led by purchases from China. The country’s central bank has raised rates four times since early October to combat accelerating prices. China’s consumer-price inflation reached 4.9 percent in February, above the government’s target of 4 percent.
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Gold, Silver Prices Rise on Demand for Investment Haven, Inflation Hedge
Bloomberg
Pham-Duy Nguyen
Gold and silver rose for the third time in four sessions as mounting tension in Libya and higher energy costs boosted demand for precious metals as an investment haven and an inflation hedge.
Muammar Qaddafi stepped up attacks on towns in western Libya that have risen against him. Crude oil in New York gained as much as 0.9 percent before easing. Gold climbed to a record of $1,445.70 an ounce on March 7.
“The sentiment is just positive for gold and silver,” said Adam Klopfenstein, a senior market strategist at Lind- Waldock in Chicago. “People want to have that fear premium. There’s a flight-to-quality for gold and fear in the backdrop that higher oil prices are inflationary.”
Gold for April delivery rose $2.40, or 0.2 percent, to settle at $1,429.60 at 1:46 p.m. on the Comex in New York. The price has gained 27 percent in the past year.
Investors are buying the metal before a March 11 protest in Saudi Arabia, Klopfenstein said. Postings on websites have called for a nationwide Saudi “Day of Rage” on that date and March 20, Human Rights Watch said on Feb. 28.
Yesterday, gold held in exchange-traded products rose for a fourth straight session to 2,024.63 metric tons, data compiled by Bloomberg from 10 providers show. Holdings reached a record 2,114.6 tons in December.
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Gold Jumps 1 Percent, Over $1,400 on Mideast Violence
Reuters
Jan Harvey
Gold prices jumped above $1,400 an ounce on Monday for the first time in nearly seven weeks as violence flared in north Africa and the Middle East, raising interest in the precious metal as a haven from risk.
Bullion has risen 3.5 percent over six days of gains, its longest winning streak since August, as protests that have unseated leaders in Egypt and Tunisia spread to neighboring states, threatening the grip of long-entrenched autocratic leaders elsewhere.
Spot gold rose as high as $1,408.20 an ounce and was bid at $1,405.23 an ounce at 1900 GMT, up 1.2 percent or $16.65 an ounce and within some $25 of an all-time high. Prices have risen from an almost four-month low of $1,300 in late January.
U.S. gold futures for April delivery rose $18.40 an ounce to $1,407.10, with trading volume about one-third the 30-day average due to the Presidents' Day U.S. holiday.
"The unrest and the fear in these countries is increasing," said Bayram Dincer, an analyst at LGT Capital Management in Switzerland. "These uncertainties on the geopolitical risk side are driving the gold market."
"See how easily gold broke $1,390, $1,395, which were strong resistance levels, and now the $1,400 psychological level," he said. "It seems nobody is looking for lower gold prices."
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