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 $688.85 an ounce.
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Gold Settles Higher on Euro Jitters
The Age
Gold futures rose for the second straight session on concern that Greece will default on its debt, spurring demand for the metal as a haven. Silver climbed.
Today was the original target date for approving an 8 billion-euro ($US10.7 billion) loan payment to Greece, the sixth installment of the 110 billion-euro lifeline assembled in May 2010. That decision was pushed back until mid-October. In September, gold tumbled 11 per cent, the most since October 2008, as financial turmoil in Europe prompted sales of the metal to cover losses in other markets.
"The selling is exhausted, and gold is back to trading more like a currency again," James Dailey, who manages $US215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in an e-mail. "The potential for a controlled default in Greece appears to be increasing."
Gold futures for delivery in December jumped $US35.40, or 2.2 per cent, to settle at $US1,657.70 an ounce at 1:51 p.m. on the Comex in New York. The metal gained 0.3 per cent on Sept. 30. The price has climbed 17 per cent this year, reaching a record $US1,923.70 on Sept. 6.
On Sept. 30, holdings in gold-backed exchange-traded products rose 0.2 per cent, the first increase in a week, to 2,213.6 metric tons, according to data compiled by Bloomberg.
"We expect physical demand to be quite decent in the coming days," Edel Tully, an analyst at UBS AG in London, said in a report. "After the recent washout, gold positioning is far from extended, and this is quite a bullish signal for price strength ahead."
Silver futures for December delivery jumped 71.2 US cents, or 2.4 per cent, to $US30.795 an ounce on the Comex. In the third quarter, the metal tumbled 14 per cent, the most in three years.
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Gold Goes Off Charts as Gartman Sees Prices for Metal Heading ‘Parabolic’
Bloomberg
Gold’s rally to a record above $1,900 an ounce has pushed the metal to overbought levels according to technical analysis tools, as economist Dennis Gartman said prices will go “parabolic.”
Bullion’s relative strength index has topped 70 since Aug. 5, a signal to some investors who study technical charts that prices may be set to decline. Gold hugged its upper Bollinger band most of this month, which may signal possible resistance, while a moving average convergence/divergence indicator and Elliot Wave patterns suggest prices are overextended, said Ross Norman, chief executive officer of London bullion brokerage Sharps Pixley Ltd.
Gold futures climbed as high as $1,904 an ounce in New York today and is up 16 percent in August, set for the best monthly gain since 1999. The metal has advanced as concern about debt crises and slower economic growth spurred investors to diversify holdings away from equities and some currencies. The biggest gold-backed exchange-traded product surpassed its equities counterpart as the largest by market value, while bullion rose to record prices in euros, British pounds and Swiss francs.
Set to Drop?
“I think we’re overextended in the short term,” Axel Rudolph, a technical strategist at Commerzbank AG in London, said by phone. “I wouldn’t be surprised if we were to fail around $1,900 to $1,922 and retrace a little bit for a few days or so. It’s still very bullish longer term. Longer term, I think $2,000 will definitely be hit.”
Prices may slip to the Aug. 11 high of about $1,815 if gold stays below $1,925, which is near a 60-minute point-and-figure target, Rudolph said. The metal may move “sideways to up” if no decline takes place in the next couple of days, he said.
Still, a weekly close above $1,900 may push prices to the “psychological” level of $2,000, near the 200 percent extension of the rally from January’s low to May’s high projected from the May low, one of the levels singled out in so- called Fibonacci analysis, he said. Fibonacci analysis is based on the theory that prices tend to drop or climb by certain percentages after reaching a high or low.
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Gold Settles at Record on U.S. Debt Fears
MarketWatch
Gold futures rose to a record Tuesday as U.S. lawmakers remained deadlocked over how to pursue a deal to raise the country’s debt ceiling.
Gold for August delivery GC1Q +0.48% , the contract with the most volume, added $4.60, or 0.3%, to end at $1,616.80 an ounce on the Comex division of the New York Mercantile Exchange.
The December contract GC1Z +0.51% , which has the most open interest, added $4.90 to $1,619.30 an ounce.
August gold had settled at a record $1,612.20 an ounce on Monday, after a weekend of talks failed to produce a deal on the U.S. debt limit and deficit reduction.
“Money is pouring into tangible assets,” said Scott Meyers, a senior trading analyst with Pioneer Futures.
Investors are reallocating more money to gold from other assets such as the stock market as the debt-ceiling impasse is one of the most important developments in recent years, he added.
Late Monday, President Barack Obama and House Speaker John Boehner touted vastly different debt-ceiling plans. The $14.3 trillion debt ceiling needs to be raised by Aug. 2 or the government is at risk to begin defaulting on its obligations.
News of an agreement in the coming days would likely “trigger an immediate correction in bullion prices,” analysts at HSBC said in a note to clients late Monday. The type of agreement reached, however, would matter.
A long-term, specific agreement addressing debt reduction would likely result in a bounce for the dollar and “some unwinding of the recent gains in ‘risk off,’” the analysts said.
Conversely, a shorter-term deal would result in a less-pronounced, shorter correction for gold and other assets deemed as safer, they added.
Silver turned higher alongside gold, with the September contract SI1U +1.39% up 34 cents, or 0.8%, at $40.70 an ounce.
Copper held the line on earlier gains as miners at the world’s largest copper mine, in Chile, continued to strike.
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Gold Settles Higher as Silver, Copper Rally
MarketWatch
Gold futures advanced for the second day in a row Wednesday, as copper and silver led the way on higher hopes for the global economy after Greece’s vote for austerity.
The Greek parliament approved a package of additional austerity measures and asset sales in a bid to avert a potentially devastating default, even as thousands clashed with police in Athens in protest of the spending cuts. Read more about the Greek vote.
The approval also had the effect of putting pressure on the U.S. dollar, benefitting commodities in general.
Gold for August delivery GC1Q -0.09% gained $10.20, or 0.7%, to $1,510.40 an ounce on the Comex division of the New York Mercantile Exchange. It traded as high as $1,513.80 an ounce.
Silver futures rallied 3.3% and copper gained 2.8%.
Richard Hastings, macro strategist at Global Hunter Securities, also attributed gold’s gains to “speculative trending to capture a potential problem in the debt ceiling discussions.”
A proposal to avoid an increase in the federal debt ceiling is “unwise, unworkable, unacceptably risky, and unfair to the American people,” Treasury Secretary Timothy Geithner wrote in a letter released to Sen. Jim DeMint, (R., S.C.), who advocated the approach. The letter was released to the news media on Wednesday. Read more of Geithner’s comments.
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Gold Settles Above $1,392 as Dollar Weakens
CNBC
Gold prices rose to settle above $1,392 an ounce in choppy trade Thursday, rebounding after the previous sessions' losses, helped by a bounce of U.S. Treasury prices and as a dollar rally lost momentum.
Benchmark Treasury yields fell from a six-month high after a successful 30-year bond auction, retracing the dramatic sell-off earlier this week fueled by inflation and deficit fears on a deal to extend federal tax cuts.
The dollar also erased initial gains as Treasury yields fell, after rising in the previous sessions on hopes of improving U.S. economic growth on the tax stimulus.
Gold has reasserted its role as a safe haven after the combined effect of rising U.S. short-term interest rates and a stronger dollar prompted profit-taking in the past two days.
"If people don't have confidence in the value of the currency, it doesn't matter if Treasury yields go up. Because, if the currency is going to lose value, the yield has to go up significantly to compensate for any ... declining value of the dollar," said Miguel Perez-Santalla, vice president of sales of Heraeus Precious Metals Management in New York.
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