Gold Gains as Investors Await EU Summit
MarketWatch
Gold prices rose Monday, as investors looked ahead to a European Union summit later in the week and read the metal’s heavy losses last week as an opportunity to get back into the market.
Gold for August delivery gained $18.60, or 1.2%, at $1,585.50 an ounce, hovering around the day’s highs.
The gains follow a mildly positive Friday session that wasn’t nearly enough to lift gold out of the red for the week. The contract ended the week off 3.8%.
“You’ve got some fear buying” as equities trade sharply lower, said Charles Nedoss, senior market strategist with Olympus Futures in Chicago. He also noted short-covering after last week’s losses.
Investors were pessimistic the summit would result in concrete measures to stanch the debt crisis, which took the Dow Jones Industrial Average down more than 1.2% in recent dealings Monday.
The dollar traded stronger, which is typically a negative for oil and other commodities as it makes them more expensive to holders of other currencies. The ICE dollar index recently rose to 82.447 from 82.267 late Friday.
In a weekend note, Societe Generale pointed to fading hopes for a breakthrough at the gathering of EU leaders that gets underway Thursday.
Meanwhile, Nomura Securities trimmed its gold-price target this year. But it kept its view of an overall positive environment, lifting its targets in 2014 and 2015 in what it said was a continuing uptrend in precious-metals prices.
Among the positives, Nomura noted central-bank buying, continuing strong Chinese demand, persistently negative real interest rates, and a growing bunker mentality for those investors who see dark scenarios on the horizon.
“The further deterioration of the economic recovery, enhanced potential for quantitative easing and continued structural problems in the euro zone lead us to believe that gold prices will stay stronger into 2014 and 2015,”.Nomura analysts said in a research brief Monday.
Gold Rises Above $1600/oz as Euro Hits Session High
BusinessDay
Gold rose back above $1600 an ounce on Tuesday, gathering momentum as it pushed through key levels, while the euro hit session highs against the dollar and other commodities firmed, with copper prices moving higher and crude oil paring gains.
Spot gold was up 0,5% at $1602,45 an ounce at 1.42pm GMT, off an earlier low of $1586,29. US gold futures for August delivery were up $5,30 an ounce at $1591,50.
The euro briefly rose back above $1,25 just before the US open, recovering early losses made on concerns over Spain’s bank bail-out deal and uncertainty after Greek elections this Sunday, although trading was choppy.
"(We had) a small pop higher in the euro and that was it," Saxo Bank vice-president Ole Hansen said. "The market wants to go higher now and it has taken comfort from the fact that buyers returned fairly quickly after the sell-off last week."
Prices fell below $1600 an ounce on Thursday as expectations for a fresh round of potentially dollar-negative quantitative easing in the US, sparked by very weak jobs data, dissipated.
While rising risk aversion in the euro zone has not tended to boost interest in gold as a haven from risk, signs that the economic crisis is having an impact in the US have tended to push prices higher.
"Gold is sitting waiting for something to happen, but I would argue it is waiting for something to happen in the US, rather than Europe," Natixis analyst Nic Brown said. "(We need) more clarity in the US over whether the economic data is going to improve again ... or whether the weakening data is a sign of slower economic growth, and that therefore the Fed will have to do something."
He added: "For me, the focus is definitely on the US side of the Atlantic. In the meantime, gold is going up, down or sideways dependent on what is going on in the euro/dollar rate, and there isn’t a great deal else that is moving it around."
European shares rose in choppy trade on Tuesday, with concerns about knock-on effects from Spain’s banking rescue and unease ahead of Greek elections prompting investors to take refuge in defensive plays such as food and utilities stocks.
CHARTISTS SEE SUPPORT
Technical analysts, who study past price moves to determine the next direction of trade, identify strong resistance for gold near $1609.
Barclays Capital said in a note that it sees near-term support at $1579, and is neutral on gold in the medium term.
"Selling interest near $1650 keeps gold within the seasonal mid-year range," it said. "While $1520 underpins, we look for a move above $1700 to signal further upside toward $1800."
Among other precious metals, silver was up 1,2% at $28,85 an ounce.
Holdings of silver-backed exchange traded funds monitored by Reuters rose by 570000 ounces from June 10 to June 11, Reuters data showed, after an inflow into the Julius Baer Physical Silver fund.
Spot platinum was down 0,1% at $1435,49 an ounce, while spot palladium was down 0,1% at $616,75 an ounce.
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Gold, Silver Rally to Multimonth Highs
MarketWatch
Gold futures on Tuesday rose to a three-month high as value-buying and a lower dollar lifted the metal, and silver surged more than 4.5% to end at its best since September.
Gold for April delivery added $13.50, or 0.8%, to settle at $1,788.40 an ounce on the Comex division of the New York Mercantile Exchange.
That was gold’s best finish since mid November. Year-to-date, gold has gained 14%, while prices have risen 2.8% on the month.
Prices had taken a hit on profit-taking in the previous two sessions, but the lower prices were met with vigorous buying as analysts said long-term support for higher gold is intact.
Metals were also buoyed by the combination of a stronger euro and a weaker dollar, with silver rallying and other base and precious metals also ending higher.
Silver for March delivery gained $1.62, or 4.6%, to settle at $37.14 an ounce. That was silver’s highest settlement since September
Silver is often said to be gold’s poor cousin because of its ability to attract investors priced out of the yellow metal.
Silver recently broke through technical levels that, after some consolidation late last week, freed it for Tuesday’s rally, said Charles Nedoss, a senior market strategist with Olympus Futures in Chicago.
Silver also caught some tailwind from firmer U.S. equities, he added.
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Gold Rises to Two-Month High, Eyes U.S. Payrolls
Reuters
Gold rose on Thursday for a third consecutive day on a larger-than-expected fall in new U.S. claims for unemployment benefits, but analysts said bullion could pull back due to an upcoming U.S. jobs report.
Bullion hit a two-month high, reversing initial losses after encouraging jobless claims data pointed to a recovery jobs market, ahead of the closely watched January U.S. nonfarm payrolls report on Friday.
The precious metal has risen nearly 12 percent this year, as gains accelerated after the U.S. Federal Reserve said last week it would hold interest rates near zero until at least late 2014.
"If you get a disappointing nonfarms tomorrow, you may see a flight into short-term market U.S. dollar securities. That tends to create a corrective action in stocks and in precious metals," said Richard Hastings, macro strategist at investment bank Global Hunter Securities.
Spot gold was up 0.8 percent at $1,757.70 an ounce by 11:59 a.m. (1659 GMT), having earlier peaked at $1,760.70, its loftiest since December 2.
U.S. gold futures for April delivery rose $11.50 an ounce to $1,761.
Silver was up 1.2 percent at $34.10 an ounce.
U.S. employment growth probably slowed in January as temporary workers hired during the holiday shopping season were laid off, but the improving labor market trend should remain intact. A Reuters survey shows nonfarm payrolls to rise 150,000 in January after increasing 200,000 in December.
"We expect gold to reach new highs in 2012, although episodes of extreme risk aversion may trigger corrections along the way," said Anne-Laure Tremblay, an analyst at BNP Paribas.
Tremblay said the recent rebound in risk appetite has encouraged gold buying, and anecdotal evidence suggests that bar and coin demand remains high in the U.S. and Europe.
Worries over the euro zone debt crisis had driven gold sharply higher for much of last year even as they weighed on the euro. Towards the end of the year, however, the metal behaved more like a commodity, following equities lower as risk appetite retreated.
The market largely ignored official data showing gold output in China, the biggest global producer of bullion, rose to a record 360.95 tonnes last year. Its domestic demand for gold far outstripped that figure, however.
Gold Settles at Six-Week High
MarketWatch
Gold futures rose to a six-week high on Monday, aided by a lower dollar and a bout of geopolitical concerns after the European Union imposed an oil embargo on Iran.
Gold for February delivery added $14.30, or 0.9%, to settle at $1,678.30 an ounce on the Comex division of the New York Mercantile Exchange.
That was gold’s highest finish since Dec. 9. Other metals tracked gold higher, with silver ending nearly 2% up.
“There seems to be a general groundswell of interest” in gold in recent sessions, said James Moore, an analyst with the bulliondesk.com in the U.K.
News of the oil embargo the European Union imposed on Iran reflected broader issues in geopolitical concerns, helping gold’s run, he said.
In addition, the dollar traded lower, offering support for gold and other dollar-priced commodities.
The euro gained as investors grew more optimistic Greece’s debtors would eventually cut a deal with the embattled euro-zone country, reducing Greece’s debt significantly.
The dollar index, which compares the U.S. unit to a basket of six currencies, traded at 79.678 from 80.148 in late North American trading Friday.
Investor interest in gold, which faltered late last year but has outperformed most assets in the new year, has grown.
Net long positions in gold, or bets prices will go higher, are at a four-week high, analysts at Commerzbank said in a note to clients Monday.
Earlier Monday, Europe imposed an oil embargo against Iran and froze assets of its central bank in an effort to get the Iranian authorities to scale back its nuclear program. The embargo includes a block in all gold trading and other precious metals as well as diamonds.
The embargo pushed oil higher, which provided an extra layer of support for gold and commodities in general. Oil traded 1.3% higher on Monday.
Meanwhile, volume for Asian metals trading was reportedly thin, as many Asian markets, including China’s, the world’s top consuming gold nation, were closed for the Lunar New Year holidays.
Without Asian markets “the floor for prices could be fragile this week,” analysts at Barclays Capital said in a note to clients. The “broader backdrop remains favorable for gold,” however, amid the improved market sentiment and “resilient” physical demand in China and India, they said.
The broader suite of metals tracked gold higher on Monday. March silver added 60 cents, or 1.9% to $32.27 an ounce. March copper ended 5 cents higher, or 1.4%, at $3.80 per pound.
Platinum and palladium also ended higher, with April platinum advancing $28.80, or 1.9%, to $1,561.10 an ounce. March palladium added $13.15, or 2%, to $688.85 an ounce.
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Gold Bugs Cheer as Prices Reach New Highs
The Business Times
GOLD, and only gold, will be our salvation when the value of companies, banks, countries and even money itself melts away. Gold, not shifting currencies, is the foundation of wealth and security. Gold is back, for good.
This is the song of the 'gold bugs' - the fervent fans of the precious metal who have clung to its investment value for three generations and now glow in the reflected lustre of a record price approaching US$2,000 for just one ounce.
Monday will mark the 40th anniversary of the United States' abandonment of the gold standard. But gold bugs kept the faith - even when prices stayed under US$500 for nearly 25 years after their 1981 peak.
Fast forward and the financial crisis of 2008 has made gold the darling of investors and sparked a near-doubling of prices.
'Gold has been rising against all national currencies, and that's significant,' said James Turk, founder of bullion dealer GoldMoney.
'When there are problems with a national currency . . . people begin to worry about the value of their money, whether they're going to lose purchasing power because of inflation or other problems. As a consequence, they look for safe havens.'
'My long-standing forecast, made in a Barron's interview in October 2003, is that US$8,000 per ounce will be reached sometime between 2013 and 2015,' he told Reuters. 'I've stayed with that forecast over the years and see no reason to change it.'
The world's financial woes are only going to get worse if current policies continue, he believes, meaning the rally in gold prices is unlikely to stop here.
'Politicians and central bankers are making decisions that debase national currencies, and the resulting bad monetary policies they are following are causing the gold price to rise,' he said.
Gold's latest push to record highs has gone hand-in-hand with a plunge in Wall Street stocks to their lowest in nearly a year.
Long-term gold bull David Beahm, vice-president of marketing and economic research at Blanchard and Co, says that worries over the stability of the stock markets will be a key driver of higher gold prices.
'The best investment right now is gold,' he said. 'By diversifying one's portfolio with a negatively correlated gold, investors can protect themselves from deep plunges in the equity market.'
Traditional investment commentators have dismissed gold - which, with no 'intrinsic' value of its own, is only really as valuable as a buyer thinks it is - as a classic bubble.
But those who have predicted its crash since it rose above US$700 an ounce in 2006, on a simple 'what goes up, must come down' analysis, have consistently been proved short-sighted.
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Gold May Advance on Europe Debt Woes, Fed Policy, Survey Shows
Bloomberg
Gold may gain as concern about Europe’s debt woes and sustained record-low interest rates in the U.S. spur demand for the metal as an alternative investment, a survey found.
Twelve of 16 traders, investors and analysts surveyed by Bloomberg, or 75 percent, said bullion will rise next week. Two predicted lower prices and two were neutral. Gold for August delivery was down 1.3 percent for this week at $1,519.70 an ounce by 11 a.m. yesterday on the Comex in New York. It reached a record $1,577.40 on May 2.
European Central Bank President Jean-Claude Trichet this week said danger signals for financial stability in the euro area are flashing “red” as the debt crisis threatens to infect banks. Policy makers decided to keep the Federal Reserve’s balance sheet at a record to spur the economy after completing $600 billion of bond purchases this month and repeated they will keep borrowing costs low “for an extended period.”
Gold will be supported “due to continuing sovereign-debt and currency risk,” said Mark O’Byrne, executive director of brokerage GoldCore Ltd. in Dublin. The Fed’s “ultra-loose monetary policies and zero percent interest rates are to continue for the foreseeable future,” he said. “This is a continuing positive for gold prices.”
The attached chart tracks the results of the Bloomberg survey, with the red bars derived by subtracting bearish forecasts from bullish estimates. Readings below zero signal that most respondents expect a decline. The green line shows the gold price. The data are as of June 17.
The weekly gold survey, which started seven years ago, has forecast prices accurately in 212 of 368 weeks, or 58 percent of the time.
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Gold Rises to One-Month Highs on Weak U.S. Outlook
Reuters
Gold rose to its highest price level in more than a month on Monday, as fears about a slowing economy and expectations of easy U.S. money policies prompted safe-haven demand.
Bullion prices have gained nearly 6 percent in the past three weeks, boosted by a string of disappointing U.S. economic indicators including Friday's weak job data.
"A lot of people are taking their risk off by getting out of the S&P 500 and other riskier assets. There is too much uncertainty with the U.S. currency and the euro. So, people think the safest place is the gold market at the moment," said Phillip Streible, senior market strategist with Lind Waldock, a unit of futures broker MF Global.
Spot gold was up 0.7 percent at $1,553.50 an ounce by 12:22 p.m. EDT, building on three consecutive weeks of gains and rising to its highest level since early May. Bullion hit a record $1,575.79 an ounce on May 2.
U.S. August gold futures gained $10.40 to $1,552.20.
Spot silver rose 2.4 percent to $37.055, rebounding from near two-week lows in the previous session, bringing the gold/silver ratio to 42.1, its lowest since Thursday, denoting its outperformance over gold in the last few trading days.
Silver prices have fallen by more than a quarter since hitting a record $49.51 on April 28 but are still up 19 percent on the year, compared with gold's 9 percent rise.
Friday's surprisingly weak U.S. employment data kept the dollar near one-month lows and suppressed investor risk appetite.
"Weak U.S. economic data last week are strengthening expectations that the Federal Reserve will maintain key interest rates at the current very low level for even longer, which will keep the opportunity costs for precious metals low," Commerzbank said in a note.
The S&P 500 index hit a more than two-month low as U.S. stocks extended a five-week decline on weak performance by the bank and financial sector. .N
The biggest risks to a rally in the U.S. stock market is that economic growth could be slower and energy and other raw material prices could rise, Goldman Sachs' chief U.S. equity strategist said.
YEMEN, EURO DEBT IN FOCUS
Uncertainty over the future of Yemen while President Ali Abdullah Saleh was recovering from injuries sustained in an attack on his palace on Friday also unnerved markets.
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Gold Looks For Fresh Highs While Silver Sits Tight
International Business Times
Short to Medium Term
- Gold is continuing a rally after a brief correction supported just above 1490. The market looks poised to retest the record high at 1517.90.
- The RSI reading in the 4H chart is returning above 60 after failing to break below 40. A break above 70 will confirm a break above 1517.90.
- The target in the medium term above this high is 1585.
- The RSI reading in the daily chart shows gold on a surge continuing to build on further bullish momentum even at overbought levels.
- The bullish outlook is very likely until a break below 1490, in which case we can expect a correctiontowards 1477, or further towards 1445-1450.
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