Gold Climbs A Second Day As Europe Concern Boosts Demand
Bloomberg
Gold rose to a one-week high on renewed speculation that the Federal Reserve will announce additional stimulus to boost the U.S. economy, increasing demand for the precious metal as an inflation hedge.
Bullion jumped 2.5 percent yesterday, the most since October, after a report showed that manufacturing in the Philadelphia region unexpectedly shrank in May, the first contraction in eight months. Before yesterday, gold was in a bear market, erasing this year’s gain, as Europe’s widening debt crisis sent investors to the safety of the dollar. The Fed has held U.S.borrowing costs at a record low since 2008 and bought $2.3 trillion in housing and government debt to spur growth during two rounds of so-called quantitative easing.
“Expectations of some form of easing have perked up the market,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview.
Gold futures for June delivery gained 1.1 percent to settle at $1,591.90 an ounce at 1:47 p.m. on the Comex in New York. Earlier, the price rose to $1,597.50, the highest since May 10. The metal is up 1.6 percent for the year, heading for a 12th straight annual gain.
Fed Chairman Ben S. Bernanke on April 25 said he was prepared to take further action to aid the economy if necessary.
Moody’s Investors Service lowered the credit ratings of 16 Spanish banks yesterday, and Fitch Ratings cut Greece’s credit rating on concern that the country may not be able to sustain euro membership.
‘Too Early’
“To see a return of gold reacting positively to macro stresses is indeed refreshing, but it is still far too early to make any firm conclusions from here that gold has indeed turned the corner,”Edel Tully, an analyst at UBS AG in London, wrote in a report today. “Follow-through buying will have to kick in to encourage investors to jump in.”
Silver futures for July delivery rose 2.5 percent to $28.715 an ounce on the Comex.
On the New York Mercantile Exchange, platinum futures for July delivery climbed 0.4 percent to $1,459.30 an ounce, rising for the second straight day. Palladium futures for June delivery fell 0.4 percent to $603.60 an ounce.
read more on this article here
Gold Climbs 1 Percent on Options-Related Buying
Reuters
Gold rose 1 percent on Thursday on options-related buying and as investors' risk appetite rose broadly a day after Federal Reserve Chairman Ben Bernanke said the Fed is prepared to do more for the U.S. economy.
The metal, which has tended to follow riskier assets most of this year, extended its rise to a third consecutive day as U.S. equities climbed on encouraging corporate results and a strong housing report. .N
Renewed gold buying could be seen after May COMEX options expired in the previous session as the liquidation pressure on the underlying futures have disappeared for now, traders said.
"After options expire, volatility may temporarily increase as investors have better leverage and can buy more options at a lower premium in the short term," said Thomas Philippides, derivatives broker at Capfeather Brokerage Group.
Spot gold was up 0.8 percent at $1,657.69 an ounce by 2:30 p.m. EDT (1830 GMT).
U.S. gold futures for June delivery settled up $18.20 at $1,660.50. Trading volume was below its 30-day average but continued to recover after falling to the lowest level of the year last Friday.
read more on this article here
Gold Climbs on Hopes that the Fed Will Conduct New Round of Bond Purchases to Help Economy
The Washington Post
Gold prices rose Thursday after a mixed batch of U.S. economic news raised hopes for some investors that the Federal Reserve will take additional steps to try to bolster growth.
Applications for unemployment benefits dipped to a seasonally adjusted 388,000 last week, near a three-month high, the Labor Department reported. That was an indication hiring has slowed down since winter.
The National Association of Realtors’ index of signed contracts to purchase homes increased 4.1 percent last month to the highest level in nearly two years.
The weaker unemployment report prompted more investors to buy gold, which is considered a relatively stable asset during uncertain economic times.
It was released a day after Federal Reserve Chairman Ben Bernanke said that the Fed will take further action if necessary to improve the economy. One option is additional bond purchases, also called a quantitative easing program.
“The catalyst for any kind of threat of an additional quantitative easing plan out of the Fed is going to be driven by a deterioration in the jobs market because that’s where ... the U.S. population feels that the most,” R.J. O’Brien commodities broker Phillip Streible said.
Gold prices have been supported for months in part by the Fed’s bond-buying programs. The bank bought Treasury bonds and mortgage-backed securities to push down long-term interest rates and stimulate borrowing and spending.
The Fed’s programs kept interest rates low and pressured the dollar, which weakened against other currencies. Gold and other commodities are priced in dollars, so a weaker dollar makes them more of a bargain for traders who use other currencies.
Gold for June delivery increased $18.20 to finish at $1,660.50 an ounce.
Other metals also were higher. May silver increased 85.1 cents, or 2.8 percent, to $31.207 an ounce, May copper rose 6.7 cents to $3.767 per pound, July platinum climbed $22.90 to $1,570.20 an ounce and June palladium rose $17.55, or 2.7 percent, to $672.65 per ounce.
In other trading, natural gas fell after the government said supplies rose last week more than analysts had expected. Natural gas declined 3.2 cents to end at $2.036 per 1,000 cubic feet.
Prices for the fuel have hovered near 10-year lows because an energy boom has created a glut of supply and demand was weak during the winter.
read more on this article here
Gold Holds Near Three-Month High as Euro Climbs
Reuters
Gold rose to a three-month high on Thursday and headed for its biggest one-week rally in a month as Europe's bailout deal with Greece lifted the euro, while platinum hit a five-month peak as a damaging strike in major producer South Africa ground on.
A stronger euro, coupled with growing concern over the impact on inflation from oil trading above $120 a barrel helped spur a bid for gold ahead of an options expiry later in the day.
Spot gold was at $1,775.35 an ounce at 1500 GMT, against $1,775.79 late on Wednesday. It earlier rallied to a high of $1,784.46 an ounce, its strongest since November 15, but failed to maintain traction above $1,780 an ounce.
"(We had) technical buying yesterday with a lack of follow-through today despite support from weaker dollar," said Saxo Bank vice president Ole Hansen.
"I wouldn't be surprised to find that the market wants to check the conviction of those recent initiated longs here."
The euro rose to a 10-week high against the dollar and its strongest level since November versus the yen on Thursday after better-than-expected German data eased concerns about the euro zone's economic outlook.
German business sentiment rose for a fourth month running in February, raising hopes that Europe's largest economy is improving and will avoid recession despite the problems facing indebted euro zone countries.
Gains in crude oil prices also helped gold. Brent oil powered to a nine-month high above $124 per barrel on Thursday due to heightened tension between Iran and the West.
"The fact that we have Iran in the background is certainly helping through higher oil prices, which are a negative for most other industrial commodities. But for gold, it's positive as it boosts inflation-hedging and boosts its safe-haven attributes," Nikos Kavalis, a strategist at RBS, said.
OPTIONS EXPIRE
Most-active U.S. gold futures are set for a 3.1 percent gain so far this week, which would be their largest weekly rally since late January. For February, the gold price has gained 2.2 percent in dollar terms but more than 7 percent in yen, reflecting the decline of the Japanese currency.
A further near-term boost to gold could come from the expiry of March options in New York later.
Wednesday's rally brought some hefty strikes into the money, with most open interest at $1,750 and $1,800 calls, which guarantee the holder the right, but not the obligation, to buy the metal at this price up to expiry.
read more on this article here
Gold Climbs to Six-Week High as European Concerns Spur Demand
BusinessWeek
Gold climbed to a six-week high in New York as concerns about Europe’s debt crisis spurred demand for the metal as a protection of wealth.
Italian Prime Minister Silvio Berlusconi’s allies pressured him to step aside after contagion from the region’s sovereign debt crisis pushed Italy’s borrowing costs to euro-era records. That overshadowed Greek Prime Minister George Papandreou’s agreement to step down, sending European equities lower.
“Gold is responding to the general market mood that the European crisis will develop much worse before it gets better,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “At the moment we do not have a foreseeable lasting solution and high uncertainty remains.”
Gold for December delivery gained as much as $25.20, or 1.4 percent, to $1,781.30 an ounce, the highest price since Sept. 22, and was at $1,777.70 by 8 a.m. on the Comex in New York. Immediate-delivery gold was 1.2 percent higher at $1,776.10 in London.
Bullion is in the 11th year of a bull market and futures reached a record $1,923.70 an ounce on Sept. 6 as investors sought to diversify away from equities and some currencies. The metal is up 25 percent this year.
Papandreou Decision
Papandreou met with Antonis Samaras, leader of the main opposition party, and agreed to step down to allow the creation of a national unity government intended to secure international financing and avert a collapse of the country’s economy. His capitulation caps a tumultuous 10 days that started with him securing a second bailout from the European Union, then roiling markets by unilaterally deciding to put the terms of that rescue to the Greek people in a vote, a plan he then dropped.
Two Berlusconi allies defected to the opposition last week and a third quit yesterday. Six others called for Berlusconi to resign and seek a more broadly backed government in a letter to newspaper Corriere della Sera.
“We still haven’t seen any real concrete, brick-and-mortar action” that could alleviate the European crisis, said David Lennox, a resource analyst at Fat Prophets in Sydney. “The market’s still expecting there to be bad news coming out of Europe. It may not be Greece. They’re now looking at its neighbor in Italy and while that’s still there, the gold price will generally trade up.”
read more on this article here
Gold Climbs for Second Day as European Debt-Crisis Concern Stokes Demand
Bloomberg
Gold rose for a second straight session on concern that Europe’s leaders won’t do enough to stem the region’s debt crisis, boosting demand for the metal as a haven investment.
Policy makers ruled out tapping the European Central Bank’s balance sheet to boost the region’s rescue fund and outlined plans to aid banks. Gold also rose on concern that U.S. monetary policy aimed at shoring up growth will spur inflation. Federal Reserve Vice Chairman Janet Yellen said on Oct. 21 that a third round of large-scale securities purchases may become warranted to boost the U.S. economy.
“Gold is being pushed up as a safe-haven bet,” Fred Schoenstein, a trader at Heraeus Precious Metals Management in New York, said in a telephone interview. “Everyone wants to know the details from Europe.”
Gold futures for December delivery gained 1.1 percent to $1,654.40 an ounce at 9:49 a.m. on the Comex in New York. On Oct. 21, the precious metal jumped 1.4 percent.
Bullion is in the 11th year of a bull market and futures reached a record $1,923.70 on Sept. 6 as investors sought to diversify away from equities and some currencies. Before today, the metal gained 15 percent this year.
“Gold investor interest has stabilized, and physical demand continues to emerge, albeit at softer levels,” Suki Cooper, an analyst at Barclays Capital in New York, wrote today in a report. “We continue to expect gold prices to be cushioned amid the seasonally strong period for demand, and this remains key before investment demand returns to the driver’s seat. We retain our positive view on gold, given the macro backdrop.”
Silver futures for December delivery rose 1.6 percent to $31.685 an ounce. Before today, prices climbed 3.7 percent this month.
read more on this article here
Gold Climbs Most in Seven Weeks as Commodities, Equities Rally
Bloomberg BusinessWeek
Gold futures gained the most in seven weeks as commodities and equities rallied amid optimism that European leaders will take steps to resolve the region’s debt crisis.
The Standard & Poor’s GSCI index of 24 raw materials surged as much as 3.6 percent, while the MSCI All-Country World Index jumped as much as 4 percent. In the previous three sessions, gold tumbled 12 percent, the most since 1983, on sales by investors to cover losses in other markets amid mounting concern that the global economy would slump.
“Gold is behaving like a classic commodity and is moving in tandem with the equity market,” Adam Klopfenstein, a senior market strategist at MF Global Holdings Inc. in Chicago, said in a telephone interview. “The selloff was overdone.”
Gold futures for December delivery gained $57.70, or 3.6 percent, to settle at $1,652.50 an ounce at 1:33 p.m. on the Comex in New York, rising the most since Aug. 8. Yesterday, the metal tumbled as much as $104.80 to $1,535, the lowest since July 8.
Greek Prime Minister George Papandreou won parliamentary backing for a property tax to meet deficit-reduction targets required to avoid default.
The precious metal has gained 16 percent this year, surging to a record $1,923.70 on Sept. 6.
“There is a small but growing group who believe this pullback will prove to be a good buying opportunity,” Edel Tully, a London-based analyst at UBS AG, said in a report. “Gold needs to stabilize after suffering a good deal of reputational damage with recent wild moves.”
Silver futures for December delivery advanced $1.56, or 5.2 percent, to $31.536 an ounce, the biggest gain since July 13. In the previous three sessions, the price tumbled 26 percent, touching a 10-month low of $26.15.
read more on this article here
Gold Climbs on Value-Store Demand as Bernanke Offers no Boost
Economic Times
Gold on Monday climbed after Federal Reserve Chairman Ben S Bernanke held off from offering more stimulus to help economic growth, boosting the appeal of investments that can act as a protection of wealth.
The gold on the Comex rose 2.5 per cent to USD 1,841.50 an ounce before trading up USD 19.20, or 1.1 per cent at USD 1,816.50. Silver also rose 0.5 per cent to USD 41.20 an ounce.
The gold has fallen as much as 11 per cent from its all-time high of USD 1,917.90 on Aug 23 as equities rebounded.
Bernanke said in a speech at Jackson Hole, Wyoming, on August 26 that the central bank still has tools to stimulate the economy, without providing details or signalling when or whether policy makers might deploy them.
Hedge funds and other money managers trimmed their net-long gold positions by six per cent to 187,681 contracts in the week to August 23.
read more on this article here
Gold Climbs to Record as U.S. Debt Talks Stall
Bloomberg
Copper, oil and grains declined while gold climbed to a record as a lack of progress in raising the U.S. debt ceiling boosted concern that the U.S. may default, hurting industrial commodities and foodstuffs and boosting demand for a haven.
Immediate-delivery gold gained as much as 1.4 percent to $1,624.07 an ounce and traded at $1,613.20 by 10:21 a.m. in Singapore. Copper on the London Metal Exchange declined as much as 0.4 percent to $9,636 a metric ton. Crude for September delivery fell 1 percent to $98.86 a barrel on the New York Mercantile Exchange. The U.S. is the biggest consumer of crude oil and the second-largest user of copper.
House Speaker John Boehner told Republicans that there’s no agreement on a plan for raising the ceiling before a default threatened for Aug. 2. The impasse has boosted the chance Standard & Poor’swill cut the U.S. credit rating from AAA within three months to 50 percent, the company said July 21.
“We see classic risk-off mode and they’ll certainly be selling commodities, gold the exception,” said Paul Deane, an economist at Australia and New Zealand Banking Group Ltd. in Melbourne.
Investors boosted gold holdings in exchange-traded products to a record 2,122.6 tons last week as European policy makers met for the second time in a month in a bid to calm Greece’s financial distress and inoculate Spain and Italy from contagion.
The S&P GSCI Index of 24 commodities dropped 0.7 percent and the MSCI Asia Pacific Index lost 0.8 percent. The Dollar Index, a six-currency gauge of the dollar’s value, declined as much as 0.3 percent.
Credible Solution
A Republican congressional official said Boehner, speaking by telephone to lawmakers, is reporting that discussions are continuing on raising the $14.3 trillion debt ceiling. Standard & Poor’s said in a report that even if Congress raises the limit in time to avert a default, it might lower the U.S. AAA sovereign credit rating to AA+ with a negative outlook if a deal isn’t accompanied by a “credible solution” on the debt burden.
“EU resolve on Greece shifts market focus to stalled U.S. debt-ceiling talks, which gold pricesare likely to track,” James Steel, an analyst at HSBC Securities USA Inc., wrote in a note dated July 22. Still, “a sudden agreement on the debt ceiling is always possible, and we would expect gold to react quickly and negatively to any such news,” Steel said.
read more on this article here
Gold Steadies; US Dollar Retreats From Highs
CNBC
Gold steadied on Friday as the U.S. dollar retreated from highs, while jitters about whether Greece was edging closer to default and fears of economic spillover from the country's debt crisis could spur safe haven buying from investors.
Greek Prime Minister George Papandreou fought to form a cabinet to avoid defaulting on the national debt and postponed announcing the cabinet until Friday, in a sign of how difficult his task is.
Spot gold was hardly changed, standing at $1,528.26 an ounce, and is heading for its second weekly drop this month if it fails to rally by a couple of dollars on the debt crisis in Europe.
"In the last 48 hours, it's just floundering, trying to work out what it wants to do. If anything, the strength of the dollar and the political fears are just getting the bulls and bears at loggerheads," said Jonathan Barratt, managing director of Commodity Broking Services.
"I think it's been well supported by the political concerns, obviously Greece and inflationary issues that we've seen over the week. The strength of the dollar is the one that seems to really trying to push it."
Gold is well below a lifetime high around $1,575 touched in early May. Recent gains were driven by debt problems in Europe and inflation fears in China following strong economic data and worries about a U.S. economic slowdown.
The dollar index slipped to 75.419 from a three-week high of 76.015 after the European Union's top economic official, Olli Rehn, said he expected the EU and the IMF to release a crucial 12 billion euro loan tranche in early July to keep Athens afloat.
Any solution to Greece's debt woes must avoid the coercion of bondholders or a default, European Central Bank President Jean-Claude Trichet was quoted as saying on Friday.
read more on this article here