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 Recovers from 4-1/2-Month Low as Euro Firms
Reuters
Gold recovered from its lowest since late December on Wednesday, edging back into positive territory as U.S. stocks opened higher and after speculation Germany and France will act to keep Greece in the euro zone lifted the euro into the black.
Spot gold was up 0.3 percent at $1,549.04 an ounce at 1403 GMT, off a low of $1,527.00. The metal was earlier sucked into a broad-based financial market sell-off on the back of alarm over political turmoil inGreece.
Despite its recovery, it remains vulnerable to a further drop after its longest stretch of losses in nearly five months.
Gold fell along with other more industrial commodities such as copper and crude oil, under pressure from an early rise of the dollar, which put silver on track for its longest stretch of consecutive daily losses in nearly four years.
Fears a Greek exit from the euro zone would worsen the European debt crisis gripped European markets on Wednesday, sending shares and other riskier assets lower as investors shifted funds into safe havens like the U.S. dollar.
"Negative market sentiment seems well entrenched and we may see further downside in the price," BNP Paribas analyst Anne-Laure Tremblay said. "In particular, we could see further cross-asset liquidation if the probability of a Greek default increases in the next weeks."
Gold tends to trade inversely to the dollar, so that strength in the U.S. unit encourages non-U.S. investors to sell gold in exchange for greater profits in their own currencies.
The euro recovered after touching four-month lows versus the dollar, while European equities struggled off their lowest level for the year. Gains were muted, however. <MKTS/GLOB>
"It's difficult to see a turnaround just yet. There will be one, but I don't think this is the time, just when we are in the eye of the storm," Societe Generale analyst Robin Bhar said.
"Clearly, with people staring into the abyss, it could (fall) $50 or even $100 lower as it washes out. That is the unpredictability of it all and as equities fall, as the Greeks take money out of the banks and the banking sector collapses, I suppose you'd have to be wary of further price falls just to cover for losses in other markets," he said.
U.S. gold futures for June delivery were down $8.40 an ounce at $1,548.70.
BIG BULLS HOLD
In a small positive for gold, billionaire fund manager John Paulson held on to his stake in the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, in the first quarter of 2012, a regulatory filing showed on Tuesday.
The prospect of improvement in physical demand for gold from the Indian jewelry sector took a knock on Wednesday with the drop in the rupee to a record low against the dollar, driven by the widespread risk aversion.
Buying in India, the world's largest bullion consumer, has emerged with the decline in the dollar-denominated gold price to 4-1/2 month lows this week, but local dealers have said the weakness in the rupee could curb this.
"Definitely physical buying has gone up, although demand is not overwhelming," said a dealer in Singapore.
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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.
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Precious Metals To Edge Higher On US Economic Data
Forex Pros
Spot gold prices erased most of its earlier losses and ended slightly lower on Tuesday. Revival in the global markets due to favorable economic data from the eurozone and weakness in the US Dollar Index supported upside in the yellow metal prices.
Additionally, positive forecast for global economic growth from the IMF also helped gold to trim most of its losses in the evening session. The yellow metal touched an intra-day low of $1634.44/oz and closed at $1649.29/oz yesterday.
On the MCX, Gold June contract dropped around 0.3 percent due to appreciation in Rupee on Tuesday, touching an intra-day low of Rs.28,351/10 gms and closed its trading session at Rs. 28,482/10 gms yesterday.
Silver
Silver traded higher by 0.7 percent on the international markets on Tuesday, on the back of weakness in the US Dollar Index coupled with upbeat sentiments in the markets.
The white metal touched an intra-day high of $ 31.88/oz and closed at $31.68/oz yesterday. On the MCX, Silver May contract gained around 0.2 percent and touched an intra-day high of Rs56,291/kg.
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Gold Rallies More than 1 Percent in Rebound
Reuters
Spot gold prices jumped more than 1 percent on Thursday, with technical buying a strengthening euro and hopes for a Fed stimulus to the U.S. economy cited as driving a late-morning recovery in bullion, which had declined in early trade.
As the euro strengthened against the dollar, bullion rebounded from an intraday low around $1,650 per oz. Some market participants said disappointing U.S. jobless claims data fed hopes that the U.S. Federal Reserve would launch a third round of quantitative easing, or QE3.
Other traders said the rally was technically driven and took many by surprise. They noted that gold was outperforming the euro, which was up 0.5 percent against the dollar.
Spot gold was up 1.05 percent at $1,674.86 per oz at 12:37 p.m. EDT (1637 GMT), headed for its largest weekly gain in six weeks as investors have grown more risk averse. Confidence in the euro-zone economic recovery took a knock this week amid concerns mounting about Spain andItaly.
Gold futures for June on Comex were up $20 an ounce at $1,680.30.
Bullion, which had risen as high as $1,675.31, was still within its recent trading range. Traders said they expected it to hit resistance around $1,685 per oz.
One trader said the rebound from early losses was technically driven after gold hit an intraday low of $1,650 per oz, rather than due to any economic data.
Technical buy stops over $1,665 per oz could be behind the rise, George Gero, senior vice president of RBC Wealth Management, said.
"People decided they wanted to get back into the market. People who thought we'd have a back and forth today were on the wrong side. You can search for news, but you'll come up empty handed," he said.
U.S. data disappointed on Thursday, with weekly jobless claims hitting their highest level since January, raising concerns that the job market was stalling.
Spanish bond yields have jumped to nearly 6 percent, a level viewed as unsustainable. Equities are hovering near three-month lows, while holdings of gold in exchange-traded funds, often seen as a measure of longer-term investment appetite for bullion, held near record highs around 70.3 million ounces.
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Gold Rebounds After Price Rout Draws Buyers
Reuters
Gold rebounded on Thursday as buyers were tempted back to the market by the previous day's 5 percent price plunge, its biggest one-day drop since October 2008, after Federal Reserve Chairman Ben Bernanke gave no hints of a third round of quantitative easing.
Prices failed to gain much traction as they rose, however, retreating from an early high of $1,724.76 an ounce as the euro surrendered gains against the dollar, declining further after dollar-supportive U.S. economic data mid-afternoon.
Spot gold was up 0.8 percent at $1,708.04 an ounce at 1437 GMT. Spot prices fell more than 5 percent on Wednesday as expectations for further easing in the world's biggest economy, which had been a key support of gold prices, faded.
Bullion's healthy bounce from lows and broader support offered to the market by low interest rates and high liquidity suggests prices may steady from here, however.
"In our view, the recent correction is temporary and does not question the mid- or long-term upward path of gold," BNP Paribas analyst Anne-Laure Tremblay said. "We may test $1,700 an ounce, but I would be surprised if we broke this level durably."
In key Asian physical gold markets overnight, jewelers, traders and investors rushed to take advantage of the nearly $100 drop in prices. "It's been a long time since we (saw) such decent buying," said one Hong Kong-based dealer.
"We've seen physical flows coming off steadily since the beginning of February," said Standard Bank analyst Walter de Wet. "Physical demand is just not there when gold is at $1,750-$1,800, and you really need that on top of the financial demand to push gold much higher."
Investment in gold-backed exchange-traded products, which issue securities backed with physical bullion, also rose on Wednesday, with holdings of the largest, New York's SPDR Gold Trust, up just over nine tonnes.
A lack of demand for physical bullion in recent weeks meant gold had little additional support once selling got underway on Comex, after Bernanke's remarks.
"We think a large part of why gold conceded so much came down to three other factors - $1,800 was proving to be too much of a hurdle and a certain staleness had entered the market; positioning had increased very swiftly in recent weeks; and physical demand has been non-existent," said UBS in a note.
"What the physical community do from here is hugely important," it added.
MARKETS RECOVER
A recovery in other markets, many of which also suffered heavy losses on Wednesday, helped gold in early trade, although it softened as the euro gave up gains midmorning.
It fell to a session low against the dollar after data showed new U.S. claims for unemployment benefits edged down last week, holding near four-year lows, suggesting the labor market recovery was gaining momentum.
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Gold Encounters Profit-Booking, Silver Surges
The Economic Times
Gold prices took a pause after a three-day surge at the bullion market here today on moderate sell-off from stockists amidst reduced jewellery off-take on the back of lower European trend.
On the other hand, silver maintained its rally on sustained speculative buying following rising industrial demand.
Standard gold of 99.5 per cent purity declined by Rs 70 to end at Rs 28,530 per 10 grams from Thursday's closing level of Rs 28,600.
Pure gold of 99.9 per cent purity also fell by similar margin to finish at Rs 28,655 per 10 grams as against Rs 28,725 yesterday.
However, silver ready (.999 fineness) jumped by Rs 700 per kg to conclude at Rs 58,190 from Rs 57,490 previously.
In Europe, gold slipped snapping from its three months high following strong dollar amidst profit taking, though eurozone uncertainty limited the fall.
Spot gold was bid lower at USD 1,775.14 an ounce in early trade.
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Gold Prices Climb With Euro on Hopes for Greek Deal
Economic Times
Gold prices rose more than half a percent on Monday as growing optimism that European leaders will sign off on a rescue deal for Greece lifted the euro, and after China's central bank further loosened monetary policy.
Spot gold was up 0.6 percent at $1,734.19 an ounce at 1210 GMT, while U.S. gold futures for February delivery were up $10.10 an ounce at $1,736.00.
Gold prices are up nearly 11 percent this year, benefiting from a rebound in the euro and expectations that U.S. monetary policy will remain loose, cutting the opportunity cost of holding non-yielding bullion. But analysts say the appeal of other investments could keep gold prices rangebound this year.
"The risks (in Europe) could dissipate modestly in the near term. Certainly, in China, there is a growing acceptance that the government will step in to support growth, and things look like they're stronger than expected in the United States," said Deutsche Bank analyst Daniel Brebner
"Globally, it looks like risk assets are being accumulated by investors, and in that kind of environment, gold should perform reasonably well," he added. "But I would argue it could underperform some of the other metals, the base metals and the white precious metals."
The euro rose 0.5 percent on Monday after China eased monetary policy to stimulate growth and expectations mounted that euro zone policymakers were set to approve Greece's long-awaited second bailout, averting a messy default.
Euro zone finance ministers are expected to approve a second deal for Greece when they meet at 1600 GMT, a move they hope will draw a line under months of turmoil that has shaken the currency bloc.
"The market's attention is to remain fixated on developments in the euro zone as finance ministers gather in Brussels to finalise the details of the second bailout for Greece," said VTB Capital in a note. "We see subdued action today as a positive decision on Greece is pretty much priced in."
Other assets seen as higher risk rallied along with the euro, with European equities reaching their highest in nearly seven months and oil prices up more than $1 a barrel. Safe-haven German government bonds slipped.
MONEY MANAGERS CUT GOLD LENGTH
Money managers in gold futures and options reduced their net long position by about 6 percent in the week of Feb. 14, their first decline in weeks, latest data from the U.S. Commodity Futures Trading Commission showed on Friday.
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China Buying Gold Like Cheap Cabbage, COMEX Gold Speculator Positions Surge
Commodity Online
The spot market price of buying Gold climbed to $1728 an ounce Monday morning London time – a slight drop from last week's close – while stock markets, commodities and the Euro all fell and government bond prices rose as European leaders met for their latest summit in Brussels.
The cost of buying Silver fell to $33.08 at one point – a 2.6% drop from where it ended last week.
Gold fell as low as $1718 per ounce Monday morning, dropping steadily during Asian trading, though this represented a loss of only 1% on Friday's closing price.
CHINA
"Everybody seemed to be expecting profit taking out of Shanghai after the two Chinese bourses came back online," said one Hong Kong dealer.
"As far as we can see, there wasn't much of that."
During last week's Lunar New Year holiday, China saw a "gold rush", with consumers spending more on buying gold than during the 2011 festival, according to a China Daily report.
"People seem crazy about gold, snatching it up more like a cheap cabbage than such a precious metal," it quotes Beijing resident Miao Miao.
The value of sales at two of Beijing's top gold retailers, Caibai and Guohua, reportedly hit 600 million Yuan ($95.28 million) – a 49.7% rise on last year's sales, almost 50% increase in purchases!The gold price in Dollars meantime rose around 25% over the same period.
The Yuan also appreciated against the Dollar over that time, gaining around 3.6%, which implies a rise in Chinese domestic gold prices of around 20%.
EUROPE
Despite strike action in Belgium that has brought transport to a halt, European leaders met in Brussels on Monday, where the issues of budget discipline and the Greek debt crisis were expected to dominate discussions.
"Solidarity and reliability are really coming together in this context," German finance minister Wolfgang Schaeuble said last week.
"We are credibly addressing the problems in the affected countries...and in the meantime we have to demonstrate solidarity."
Britain however has already walked away from the new budget treaty currently being drafted.
"To write into law a Germanic view of how one should run an economy and that essentially makes Keynesianism illegal is not something we would do," one British official told newswire Reuters.
Denmark, which does not use the Euro, has negotiated a concession that fines imposed on a country that breaches new deficit rules would only go into the Eurozone bailout fund if the fined country were a Eurozone member – otherwise they will go to the European Union's general budget.
Greece meantime has rejected a German proposal that an EU budget commissioner should have power over Greek taxes and spending.
"I think it's wrong that money from the EU's structural development fund is being spent on bicycle stands," German foreign minister Guido Westerwelle said on Friday, arguing that EU funds are being squandered.
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Gold Up on Safe-Haven Buying, Dollar Weakness
MarketWatch
Gold futures inched higher Friday, leaving behind early-session losses as a lower dollar and safe-haven buying ahead of the weekend supported prices.
The early price weakness was met with buying interest that quickly pushed prices higher, a good sign for gold’s short-term gain prospects, analysts said.
Gold for February delivery rose $6, or 0.4%, to $1,732.70 an ounce on the Comex division of the New York Mercantile Exchange after tapping a low of $1,714.20 earlier.
A close in the black would be gold’s third straight session of gains.
Gold surged more than 3.6% in the past two days, and on Thursday settled at its highest in seven weeks.
The metal has enjoyed strong recent gains spurred by the Federal Reserve’s projection of ultra-low interest rates through 2014.
Gold prices have risen nearly 10% so far this month.
“Gold looks great in the charts and a lot of people are taking it as a sign to buy gold,” said Adam Klopfenstein, a market strategist with Archer Financial Services in Chicago.
Ahead of the weekend and potential for headlines out of Greece and the euro zone, some are also adding gold to their portfolio as a safe haven, he added. A lower dollar also helped push prices higher, Klopfenstein said.
The Wednesday Fed decision “awakened the positive gold sentiment” that had been underneath the surface but cloaked in caution after the selloff in fourth quarter, said Jeffrey Wright, a senior research analyst with Global Hunter Securities.
“Inflation is in the market; (it is ) just being under-reported in my opinion,” he said. In addition, the “miss” on fourth-quarter gross domestic product will give the Fed an “additional cover” to continue its “easing” stance and will also contribute to gold going higher, he added in emailed comments.
Earlier Friday, investors parsed out news U.S. GDP expanded 2.8% in the fourth quarter, compared to expectations of a rise around 3%.
Other metals more linked to industrial uses, and therefore more sensitive to the GDP news, felt the pressure on Friday, but silver turned higher.
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