Malaysia Gold Investment

Many central banks around the world continued to add to their gold holdings

noreply@blogger.com (Durian Edge) — Fri, 25 May 2012 07:24:00 +0000

Many central banks around the world continued to add to their gold holdings in recent months, according to data from the International Monetary Fund (IMF).

The largest increase was by the Philippines, which raised its gold holdings by 1.03 million ounces to 6.245 million in March. This represented the biggest reported increase in a nation’s gold reserves since Mexico purchased 2.5 million ounces in March of 2011. Furthermore, it marked the seventh consecutive month in which The Philippines added to its gold reserves.

Mexico was the second largest buyer of gold in April, as it purchased 94,000 ounces to bring its total to 4.04 million. Other substantial purchases were made by Turkey, Kazakhstan, Ukraine, and Sri Lanka.
Notably, the countries that have added the most to their gold reserves in recent years have relatively small economies and have not engaged in unprecedented quantitative easing measures. This suggests that these nations are seeking to protect themselves from the rampant currency debasement being implemented by the likes of the Federal Reserve, European Central Bank (ECB), Bank of England, and Bank of Japan.

The IMF data should “gather much attention from market participants…[and] should somewhat help sentiment for gold,” according to UBS precious metals analyst Edel Tully.
Last year, central banks added 456.4 tons of gold – the largest amount in nearly 50 years – and are expected to buy as much as 400 tons in 2012, according to the World Gold Council.

Greek exit, while most likely fuelling considerable physical gold demand in Europe

noreply@blogger.com (Durian Edge) — Wed, 23 May 2012 23:59:00 +0000

The gold price tumbled $21.33, or 1.4%, to $1,545.09 per ounce Wednesday morning amid widespread liquidation on Wall Street. The spot price of gold moved modestly lower alongside other commodities in overnight trading, but later extended its losses as the U.S. dollar surged higher against a composite of foreign currencies.

The gold price sell-off was accompanied by particular weakness the euro, which fell 0.8% to 1.2584 against the dollar ahead of a key euro zone meeting. With the decline, the euro reached its lowest level against the dollar since July 2010, during the depths of an earlier phase of the European sovereign debt crisis.

Later today, European policymakers will hold an informal summit to consider proposals to improve economic growth, including the possibility of euro-zone bonds. However, officials in Germany and France remain divided over various policy measures, and the looming Greek election on June 17 is likely to continue to weigh on the global economy in the weeks ahead.

Commenting on the implications for the gold price, analysts at UBS wrote in a note to clients that “As uncertainty mounts leading up to the June 17 Greek elections, we’re more inclined to bet on a higher gold price but a Greek exit, while most likely fuelling considerable physical gold demand in Europe, could spark a sizeable deleveraging and dis-investment in financial markets.”
UBS added that “The paper gold market would not be immune to this selling. That is gold’s risk and it’s feasible to think the metal could fall below last week’s low of $1,527 before ultimately rebounding sharply.”

Sovereign debt crisis in Europe is likely to continue to be a primary driver for gold prices

noreply@blogger.com (Durian Edge) — Mon, 21 May 2012 23:50:00 +0000

Gold prices oscillated between gains and losses while the U.S. dollar held firm Monday morning. The spot price of gold climbed to $1,600.30 per ounce in overnight trading, but slid back toward $1,590 as U.S. financial markets opened.

Since falling last Wednesday to $1,526.87 per ounce – its lowest level since December 29, 2011 – the gold price has now rebounded over 4.0%. Furthermore, on a year-to-date basis the price of gold returned to positive territory, by 1.7%, after its best two-day advance last Thursday and Friday since October of 2011. However, the yellow metal is coming off of three consecutive monthly declines for the first time since 2001, which has left many strategists cautious on gold going forward.

Analysts at UBS wrote in a recent note to clients that “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…Momentum will be key, and follow-through buying will have to kick in to encourage investors to jump in.”

In contrast to UBS, LGT Capital Management analyst Bayram Dincer was more constructive on the outlook for the gold price. “In this multi-crisis environment, we are seeing a change in attitude towards risk in gold, so we are very optimistic…We got to the point where the year-to-date performance was zero, and from a risk perspective people started to recognise that this was somewhere with lower risk compared to other asset classes.”

Looking to the week ahead, the ongoing sovereign debt crisis in Europe is likely to continue to be a primary driver for gold prices and broader financial markets. In the U.S., the economic calendar is relatively light this week, but does include a few key reports. Existing Homes Sales for April will be released on Tuesday morning, followed by New Home Sales for April on Wednesday. Thursday’s schedule includes Weekly Jobless Claims and the April Durable Goods data. The week then concludes with University of Michigan Consumer Sentiment on Friday, prior to the Memorial Day Weekend.

Gold prices continued their recent resurgence on Friday with a $15.50, or 1.0%, advance to $1,590.10 per ounce

noreply@blogger.com (Durian Edge) — Sat, 19 May 2012 07:36:00 +0000

Gold prices continued their recent resurgence on Friday with a $15.50, or 1.0%, advance to $1,590.10 per ounce. Since reaching a four and a half month low of $1,526.87 just two days ago, the spot price of gold has surged higher despite ongoing strength in the U.S. dollar. In doing so, the gold price returned to positive territory on a year-to-date basis, by 1.7%.

Analysts at UBS wrote in a note to clients that “Yesterday, gold defied a stronger dollar, weaker equities, and another raft of negative EU headlines (to rise). It felt like the gold market of yesteryears.” The firm went on to say that “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. Momentum will be key, and follow-through buying will have to kick in to encourage investors to jump in.”

Nick Moore, a commodity analyst at Royal Bank of Scotland, stated on Thursday that “This is a value buy; in volatile times people go back to the charts…We have had a sharp selloff which has uncovered the value of the metal and people are seeing $1,530 as an attractive entry point for gold.”

In the currency markets, the euro fell to a multi-month low of 1.2644 against the U.S. dollar in overnight trading after Moody’s downgraded 16 Spanish banks last evening. This followed a downgrade earlier this week of 26 Italian lending institutions by Moody’s. However, the euro subsequently recouped its losses to trade slightly higher at 1.2708 against the dollar later this morning.

More upside than downside risk for gold at the moment

noreply@blogger.com (Durian Edge) — Thu, 17 May 2012 23:29:00 +0000

Gold continued to surge higher in mid-day trading on Thursday, as the spot price climbed $38.93, or 2.5%, to $1,578.85 per ounce. In doing so, the yellow metal was on pace for its best day since a 2.7% rise on January 25, 2012.

The rally in gold was fueled by several worse than expected U.S. economic reports – including Weekly Jobless Claims, the Philadelphia Fed Index, and Leading Economic Indicators.
Commenting on the strength in gold, Afshin Nabavi – head of trading at MKS Finance – stated in a Reuters report that ”Since yesterday we have seen more interest come through from physical buyers…because prices have come down substantially.”

“But there is more upside than downside risk for gold at the moment as the political situation is very jittery with tension in Iran and economic problems especially in the euro zone,” Nabavi added. “People will want to buy physical gold again. Those who went out since December are now waiting for prices to stabilize before getting in again.”

Central bank could launch a third round of quantitative easing (QE3) if the U.S. economy worsens

noreply@blogger.com (Durian Edge) — Thu, 17 May 2012 00:02:00 +0000

The gold price bounced back from overnight losses on Wednesday alongside European and U.S. financial markets. The spot price of gold fell as much as $16.38 to $1,526.50 per ounce in overnight trading – its lowest level since December 29, 2011 – before rebounding into positive territory by $6.67 at $1,549.55. The SPDR Gold Trust (GLD), a proxy for the gold price and the world’s largest gold ETF, advanced $0.89 to $150.63 per share.

Greece's feared new elections and possible withdrawal from the euro have markets moiled and sweating. What do they do when they're worried? They run to US dollars, which they see as "safety." For me, I see that as escaping a lion by running into a bear's den -- with the bear inside. I reckon they'll discover that. Now is on month of May and high gold demand season is on Oct so now is a good time to buy in gold.

Yesterday US time release of the latest Fed minutes – a recap of the most recent FOMC meeting – indicated that the Ben Bernanke-led central bank could launch a third round of quantitative easing (QE3) if the U.S. economy worsens. In particular, the minutes noted that “Several members indicated that additional monetary policy accommodation could be necessary if the economic recovery lost momentum or the downside risks to the forecast became great enough.” However, the Fed minutes also stated that “One participant noted the potential risks and costs associated with additional balance sheet actions.”

For gold, there is sustained and strong physical buying coming into the market from the Far East

noreply@blogger.com (Durian Edge) — Wed, 16 May 2012 00:19:00 +0000

The fallout in gold (and most other asset classes) continued yesterday, with a strengthening dollar weighing heavily on the complex. The liquidation continued on Asian metal exchanges, with arbitrage selling the major theme. Japanese remained net sellers on both the physical and investment fronts.
This morning, we had better-than-expected German GDP data (+1.7% y/y, compared to a consensus of +0.9% y/y) which curbed the euro sell off and helpedgold price gain some ground.

Eurozone economic activity figures were also better than expected, showing that the region’s economy did not contract (zero y/y growth was recorded). However, the support for the euro already shows signs of fading, which is again seeing gold price wobble. For gold, there is sustained and strong physical buying coming into the market from the Far East, which should see the metal hold the $1,550 level.
Later today we have some US data flow which if disappointing could prompt a turnaround for markets on increased expectations of further Fed monetary accommodation. This seems unlikely though given the modest expectations for these numbers.

Of most importance is probably April retail sales, for which analysts are forecasting a meagre 0.1% m/m increase. Gold support is at $1,547 and $1,537. Resistance is $1,578 and $1,597.

ETF have turned net buyers of Gold

noreply@blogger.com (Durian Edge) — Mon, 14 May 2012 23:56:00 +0000

Net speculative length for COMEX gold dropped dramatically, surrendering 84.9 tonnes this past week. The change in the net position was largely the result of speculative shorts being added (51.3 tonnes, the strongest increase of the last 12 months), with the 33.6 tonnes unwound from longs also contributing significantly to the overall deterioration. Net speculative length (at 388.9 tonnes) appears decidedly weak compared to historical norms (the 5-year average is 611.7 tonnes), signalling a continued lack of confidence. What is more disconcerting is that while investors have over the past few weeks appeared cautious of running too short on gold, this fear seems to have evaporated.

ETFs, however, have turned net buyers, for the first time in four weeks, with 2.0 tonnes of gold bought over the past week. The mild increase is hardly an indication of investor confidence — ETFs have not completely shrugged off their bearish view on gold. Despite current investor positioning, we believe that, from a fundamental perspective, getting bearish on gold at current levels (c.$1,560) would be wrong and too late. In fact, we believe that from a risk/return perspective, gold should be bought, not
sold, on dips lower than this.

Gold seems to be currently trading more as a risky asset than a safe haven

noreply@blogger.com (Durian Edge) — Sat, 12 May 2012 03:46:00 +0000

The gold price declined on Friday alongside the broader financial markets as the U.S. dollar held firm in morning trading. The spot price of gold fell to a fresh 4-month low of $1,571.20 per ounce in overnight trading, but pared its loss to trade down by $10.56, or 0.7%, at $1,583.74.

Commenting on the gold price, Anne-Laure Tremblay – a precious metals strategist at BNP Paribas – stated that “Gold seems to be currently trading more as a risky asset than a safe haven. While the U.S. dollar has gained on the back of higher risk aversion, gold was sold off.” She added that “The decline is likely a consequence of liquidation in the paper market rather than lack of interest on the physical side.”

Political risk in Europe is doing anything positive for gold prices

noreply@blogger.com (Durian Edge) — Thu, 10 May 2012 23:38:00 +0000

The gold price held firm Thursday morning near $1,597 per ounce amid modest weakness in the U.S. dollar and a rebound in the broader financial markets. The price of gold clung to a slight gain after weekly U.S. jobless claims came in at 367,000 – in-line with the consensus estimate among economists.

Commenting on the outlook for the price of gold, Nic Brown – Natixis head of commodity research – stated that “It’s not as though the escalation of the political risk in Europe is doing anything positive for gold prices at all, and this is totally different to how we were between 2008 and 2010, when all the correlations were totally reversed and the weakening of the euro actually led to a strengthening in the gold price.”

Brown went on to say that “This very much suggests that we are not getting demand for gold from European investors. The dynamic is purely from the impact of the crisis on to the FX market and from that directly on to the gold price.”

The sell-off in the gold price was driven by escalating euro zone sovereign debt concerns

noreply@blogger.com (Durian Edge) — Wed, 09 May 2012 23:35:00 +0000

Gold prices continued to slide on Wednesday, by $21.04, or 1.3%, to $1,585.95 per ounce. The sell-off in the gold price was driven by escalating euro zone sovereign debt concerns, which put considerable pressure on financial markets in Asia, Europe, and North America.

Commenting on the relationship between the currency markets and the gold price, Deutsche Bank analyst Michael Lewis wrote in a recent note to clients that “It is a much more hazardous environment (for gold) at the moment because of the downside risks to euro/dollar.”

However, Lewis added that “One of the supportive factors (is) we’ve already seen quite a dramatic scaling-back in speculative length in gold over the last few months, so that might reduce the positioning risk for the market, but it is definitely going to be an environment where gold is going to struggle and the correlation (of gold to the euro/dollar rate) is going to cause quite substantial headwinds.”

One item that could support gold prices is increased demand for the yellow metal from China. Yesterday, the Census and Statistics Department of the Hong Kong government announced that imports of gold from Hong Kong to China during the first three months of 2012 were 135,529 kilograms, or 135.53 metric tons. This represented a more than six-fold rise over the 19,729 kilograms imported during the first quarter of 2011.

In a note on the Chinese data, analysts at Commerzbank stated that “Rising prosperity levels among the population coupled with tighter laws governing property speculation are likely to contribute to sustained high demand for gold in China…Above all, Chinese gold demand should lend key support to the price of gold during the course of the year.”

China Imports Gold Up 587% in 1Q2012

noreply@blogger.com (Durian Edge) — Tue, 08 May 2012 23:52:00 +0000

While the price of gold has not performed particularly well since reaching its $1,923 all-time high in September 2011, this has not deterred Chinese citizens from accumulating the yellow metal.
The Census and Statistics Department of the Hong Kong government reported that during the first quarter of 2012, imports of gold from Hong Kong to China were 135,529 kilograms (135.53 metric tons) – a 587% increase over the 19,729 kilograms imported from January through March of 2011 – according to Bloomberg.

The story went on to say that “Demand has climbed in the world’s second-largest economy as rising incomes and curbs on property speculation boosted purchases. China may become the biggest user annually this year, according to a forecast from the producer-funded World Gold Council. Last year, total Indian demand including for jewelry and investment was 933.4 tons to China’s 769.8 tons.”
Nick Trevethan, senior commodities strategist at Australia & New Zealand Banking Group Ltd, commented that “We’re looking at another solid year for Chinese demand based on these early numbers. While it’s largely related to price, negative real interest rates should keep demand strong.”
Liang Ruian, a director at Pinpoint Investment Consulting Ltd. in Beijing, stated that “Summer is usually the low season for gold consumption. If we can see growth even in the low season, it represents the resilient nature of China’s gold consumption.”

Barclays Sees “Sideways Chop” for Gold, Then 2nd Half Rebound

noreply@blogger.com (Durian Edge) — Mon, 07 May 2012 23:30:00 +0000

The gold price dipped Monday morning, by $3.29 to $1,639.60 per ounce, as the U.S. dollar advanced modestly in the aftermath of elections in France and Greece. The price of gold held in a narrow range in overnight trading despite substantial volatility in financial markets across the globe. Stocks and cyclical commodities initially came under heavy selling pressure after French and Greek election results raised concerns that each nation will not adhere to various austerity measures aimed at alleviating the euro zone sovereign debt crisis.

Commenting on the jobs data, PIMCO CEO Mohamed El-Erian stated that “Data point to sluggish job growth, declining labor market participation and for those employed, stagnant purchasing power. Consumption, as a growth engine, is less dynamic at a time when headwinds from Europe and a potential fiscal cliff are still material.”

With gold futures continuing to languish near the lower end of the $1,620-$1,700 range they have occupied in recent months, several market strategists see further consolidation in the months ahead.
In a recent report, analysts at Barclays Capital wrote that “Gold remains locked in a range” with the $1,600 per ounce level likely to provide support. However, the firm noted that “A move above the 1,690 area would confirm our bullish view toward the range highs near 1,800.” Barclays went on to say that “Seasonality leads us to expect a mid-year sideways chop before we become more bullish in the second half of the year.”

Gold price had continues drop since hits sky high at USD1,900 per oz

noreply@blogger.com (Durian Edge) — Mon, 07 May 2012 00:24:00 +0000

Gold price had continues drop since hits sky high at USD1,900 per oz. US and Europe continues sale out they gold to manipulate the market price so that the Gold price will not hits too high. Big buyer in Asia, India and China had slow down since begin of this year had give big impact to gold price.

However, base on the chart gold price may hold on USD1,600 per oz. Likely this level will be broken due to money printing on Euro and USD. Paper gold may be manipulate but physical gold will not.

Gold price turned higher after the latest U.S. jobs data came in below expectations

noreply@blogger.com (Durian Edge) — Sat, 05 May 2012 08:03:00 +0000

The gold price turned higher Friday morning, by $4.81 to $1,642.45 per ounce, after the latest U.S. jobs data came in below expectations. The price of gold fell to as low as $1,626.93 in overnight trading, but rebounded after the April non-farm payrolls report showed job additions of 115,000 – well short of the 160,000 figure economists were expecting. Randgold Resources (GOLD) was the latest large-cap gold producer to miss analysts’ estimates. The Company reported quarterly adjusted earnings per share of $1.01 – well beneath the $1.11 median forecast among analysts. Royal Gold (RGLD), one of the world’s largest precious metals royalty companies, also announced worse than expected earnings results. Shares of GOLD and RGLD finished the day down by 5.1% and 3.1%, respectively.

Commenting on the recent economic data and the potential impact on the gold price, Saxo Bank vice president Ole Hansen stated that “The focus for the next 24 hours will be the jobless report tomorrow. The (jobless) claims were a bit lower than expected and could have done some of the damage…We are still rangebound (on gold), but people do worry that the technical picture could increasingly turn negative over the coming weeks unless we see a weak number tomorrow.”

Gold price tumbled $17.42, or 1.1%, to $1,636.89 per ounce

noreply@blogger.com (Durian Edge) — Thu, 03 May 2012 23:36:00 +0000

The gold price tumbled $17.42, or 1.1%, to $1,636.89 per ounce on Thursday amid better than expected U.S. economic data and the European Central Bank’s (ECB) monetary policy meeting. The price of gold extended its decline after weekly U.S. jobless claims came in at 365,000 – below the 379,000 level economists were expecting. Silver dropped alongside the gold price, by $0.37, or 1.2%, to $30.32 per ounce.

While the price of gold has generally responded favorably to worse than expected U.S. economic data in recent years, yesterday the yellow metal showed a muted – albeit mildly negative – reaction to the ADP data. Commenting on the implications of the employment report, Paul Ashworth – chief U.S. economist at Capital Economics – contended that Friday’s non-farm payroll data could also come in below economists’ estimates.

“Obviously, the weak ADP reading means that there are now clear downside risks to our estimate that the official nonfarm payroll employment figures will show a 175,000 gain. Indeed, it is possible we could see a repeat of March, when payrolls increased by only 120,000.”

Sharp decline in demand for gold from Indian jewelers

noreply@blogger.com (Durian Edge) — Tue, 01 May 2012 23:40:00 +0000

The gold price relinquished its modest gain Tuesday morning after a better than expected economic report on manufacturing activity in the U.S. The price of gold climbed to as high as $1,672.12 per ounce in overnight trading but subsequently dropped to $1,661.14 after the April ISM index came in at 54.8 – above the 53.3 level markets were expecting.

Despite yesterday’s slight uptick in the gold price, the yellow metal finished the month of April fractionally lower, by $2.79, or 0.2%. In doing so, the spot price of gold dropped for the third consecutive month – a development it had avoided since January through March of 2001.

However, on a year-to-date basis it remains higher by 6.6% as it looks to post its 12th straight annual gain. The gold price was the recipient of a headwind from HSBC on Monday, after the firm lowered its average gold price forecast in 2012 to $1,760 from $1,850 per ounce and in 2013 to $1,775 from $1,790. James Steel, the firm’s Chief Commodities Analyst, wrote in a note to clients that “Our revisions follow a sharp decline in demand for gold from Indian jewelers after a proposed doubling of import levies, and a steep reduction in market expectations of further quantitative easing (QE) or other monetary stimulus in the aftermath of the congressional testimony by Fed Chairman Ben Bernanke on 29 February.”

Although HSBC reduced its forecast, the firm said that it still anticipates higher gold prices than current levels in the years ahead. Steel based his stance on further geopolitical uncertainty around the world and central bank demand for the yellow metal, among other factors.

In contrast to Steel, Alexandra Knight – an economist at National Australia Bank Ltd – offered a more constructive short-term outlook on Monday for the gold price. “Concern about Spain and its budget might have prompted some demand for safe-haven assets,” Knight contended. “I don’t think anything’s going to change in Europe in the near term that’s going to make people feel comfortable about the situation there, and that will keep gold supported above $1,600.”

Goldman also reiterated its gold price target of $1,840 per ounce

noreply@blogger.com (Durian Edge) — Tue, 01 May 2012 00:13:00 +0000

The gold price fell $3.22, or 0.2%, to $1,659.38 per ounce Monday morning as the U.S. dollar held firm against a basket of foreign currencies. The price of gold climbed to as high as $1,666 in overnight trading, but turned sharply lower to $1,645 after the U.S. Commerce Department reported that personal spending rose at 0.3% in March – below the 0.5% consensus estimate among economists. While the gold price normally benefits from disappointing economic data, today the yellow metal retreated alongside the broader commodities complex.

Analysts at Goldman Sachs echoed Bank of America’s cautious economic outlook in a recent note to clients and discussed the positive implications for the gold price. The firm wrote it expects the price of gold to resume its ascent “as subdued US growth reduces the market’s expectations of real rates and perhaps, most importantly and counter to much of the current market feeling, suggests that the anticipated North American growth slowdown will see a return by the U.S. Fed to some form of quantitative easing.” Goldman also reiterated its gold price target of $1,840 per ounce.

Looking ahead to the coming week, a slew of additional U.S. economic data will arrive for the financial markets and the Federal Reserve to scrutinize. Along with reports on Personal Income, Personal Spending, and the Chicago Purchasing Managers’ Index today, the ISM Index, Construction Spending, and Auto Sales data will be announced on Tuesday. The ADP Employment report is due out on Wednesday, while weekly jobless claims and the ISM Services data will be released on Thursday. The week then concludes on Friday with the most closely-followed data – the monthly non-farm payrolls and unemployment report.

Intentions to keep monetary policy at highly accommodative levels are a bullish case for gold prices

noreply@blogger.com (Durian Edge) — Sun, 29 Apr 2012 23:41:00 +0000

The gold price rose $5.82, or 0.4%, to $1,663.72 per ounce on Friday following S&P’s downgrade of Spain and a worse than expected report on U.S. GDP. The price of gold climbed after Standard & Poor’s lowered its Spanish sovereign credit rating by two notches to BBB+ and first quarter GDP increased by 2.2% – below the 2.5% consensus estimate among economists.

While the gold price has now advanced on five of the past six trading days, it remains lower in April by 0.7%. In doing so, the yellow metal is still on pace for its first stretch of three consecutive monthly declines since early 2001.

As financial markets had a chance to digest the outcome of the Fed meeting, several strategists weighed in with their view of the implications for the price of gold. James Steel, a precious metals analyst at HSBC, stated that “Although the Fed did not announce another round of easing, intentions to keep monetary policy at highly accommodative levels are a bullish case for gold prices…The decline of gold prices on the Fed announcement was an overreaction. The ability of gold prices to bounce back is a good sign.”

Andrey Kryuchenkov, an analyst at VTB Capital, contended that “There is little reason to sell gold at the moment. Risk aversion is not where it should be for gold to rally much, but at the same time sentiment is cautious at best.”

Tom Kendall, head of precious metals research at Credit Suisse, wrote in a note to clients that “The message out of the Fed didn’t really change much. We had a little sell-off immediately after the statement came out, but it quickly recovered.”

“I think it would have taken a much greater change in stance coming out of the Fed for gold to really make a big break one way or the other,” Kendall added, “and given the disappointing U.S. data coming out over the last couple of weeks, I don’t think that was particularly likely.”

No Posting Today Due To Attend Bersih 3.0

noreply@blogger.com (Durian Edge) — Sat, 28 Apr 2012 01:07:00 +0000

Bernanke’s dovish remarks helped lift the price of gold back into positive territory

noreply@blogger.com (Durian Edge) — Thu, 26 Apr 2012 23:46:00 +0000

The gold price rose $6.04, or 0.4%, to $1,649.84 per ounce Thursday morning following a worse than expected report on the U.S. labor market. The price of gold advanced as weekly jobless claims came in at 388,000 – above the 375,000 median estimate among 48 economists surveyed by Bloomberg.

On Wednesday the gold price oscillated between gains and losses as investors digested developments from the latest Federal Open Market Committee (FOMC) meeting. The price of gold initially dropped to $1,625 per ounce following the release of the Fed statement, which did not include any signals that a third round of quantitative easing (QE3) is forthcoming.

However, the gold price bounced back to finish up by $2.56 at $1,643.80 after Chairman Ben Bernanke stated in his press conference that “We remain entirely prepared to take additional balance sheet actions if necessary…Those tools remain very much on the table” in the event that the U.S. economy requires further monetary stimulus.

Yesterday’s Fed statement included few surprises for the markets, according to Goldman Sachs chief U.S. economist Jan Hatzius. In a note to clients, Hatzius wrote that “The committee retained its guidance that the funds rate would likely remain exceptionally low ‘at least through late 2014’. Unsurprisingly, the committee decided to continue the ongoing Maturity Extension Program (MEP)—the ‘twist’.”

The Goldman Sachs economist went on to say that “The FOMC made a few small changes to its description of the economic backdrop. First, it removed the phrase that strains in global financial markets ‘have eased’. Second, the statement said that the unemployment rate ‘has declined’ instead of ‘has declined notably’, acknowledging the slower pace of decline more recently.”

While the Fed statement was largely in-line with market expectations, Bernanke’s dovish remarks helped lift the price of gold back into positive territory. Furthermore, the Chairman’s comments reflected a prediction made earlier in the day by noted bond fund manager Jeffrey Gundlach – head of DoubleLine Capital, which manages over $30 billion.

71% of central bankers recently stated that now is a better time to invest in gold

noreply@blogger.com (Durian Edge) — Wed, 25 Apr 2012 23:27:00 +0000

The gold price held steady near $1,640 per ounce Wednesday morning as investors awaited this afternoon’s statement from the Federal Reserve meeting. The price of gold stabilized in a tight range between $1,637 and $1,645 in overnight trading despite a broad-based rally in financial markets across the globe.

The gold price received a boost on Tuesday from a report by the International Monetary Fund (IMF) showing that several nations around the world added significantly to their gold reserves in the month of March. According to IMF data, Mexico purchased the largest amount of gold, 16.81 tons, bringing its total to 122.6 tons. Russia bought the second most gold, 16.55 tons, which increased its holdings to 895.75. Other nations that purchased noteworthy quantities of the yellow metal included Turkey, the Czech Republic, Argentina, Ukraine, Belarus, Kazakhstan, and Tajikistan.

The IMF also noted that a poll showed 71% of central bankers recently stated that now is a better time to invest in gold than during the start of last year. Bayram Dincer – an analyst at LGT Capital Management in Pfaeffikon, Switzerland – commented that “We expect that the recent trend of the official sector being a net buyer will continue in the medium and long term. Gold will continue to be a preferred central bank reserve asset. It is currency protection and stabilization.”

Commenting on the gold price in light of the IMF’s report, analysts at UBS wrote in a note to clients that “The confirmation of official central buying should help gold find some stability today, after a poor start to the week. With positioning light, participants could certainly use this as an excuse to become a little friendlier towards the yellow metal.”

Looking ahead, UBS cautioned that “This sentiment is likely to be put on hold until the FOMC meeting is out of the way tomorrow. After all, Fed-speak still remains the largest determinant of gold’s direction for now.”

Gold doesn’t seem to be trading on anything other than externally derived sentiment

noreply@blogger.com (Durian Edge) — Tue, 24 Apr 2012 23:36:00 +0000

The gold price advanced $6.85, or 0.4%, to $1,645.25 per ounce Tuesday morning as the U.S. dollar Index fell by a modest 0.3% to 79.155. Silver rose alongside the price of gold, by $0.18, or 0.6%,t o $31.08 per ounce. Strength in precious metals and the dollar’s weakness was driven in part by worse than expected data on the U.S. housing market.

Commenting on the outlook for the yellow metal, Nick Trevethan, senior commodities strategist at ANZ Bank, wrote in a note to clients that “Gold doesn’t seem to be trading on anything other than externally derived sentiment. There is still pressure for gold prices. The market has been trying to push the support level at $1,630-$1,640, although the push is rather half-hearted right now.”

Looking ahead for the gold price, it is likely to stabilize ahead of Wednesday’s Federal Reserve meeting, according to Standard Bank’s head of commodity trading, Yuichi Ikemizu. “We probably won’t see much move before the Fed meeting,” Ikemizu stated, “as people are sidelined and waiting for new cues from the Fed and Bank of Japan.”

Gold price fell $12.07, or 0.7%, to $1,630.55 per ounce

noreply@blogger.com (Durian Edge) — Tue, 24 Apr 2012 00:15:00 +0000

The gold price fell $12.07, or 0.7%, to $1,630.55 per ounce Monday morning amid widespread liquidation in financial markets and strength in the U.S. dollar. Silver fared worse than the price of gold, as it dropped $0.87, or 2.8%, to $30.81 per ounce. In doing so, the prices of gold and silver reached their lowest levels since April 4th and January 20th, respectively.

Commenting on the gold sector’s weakness of late, analysts at UBS wrote in recent notes to clients that “Physical demand is currently underwhelming – barely even blinking when prices dipped below $1640 yesterday – and this hardly offers any assurance that gold can easily find support on any further price drops… Gold could certainly use fresh catalysts from external markets at this stage to shake it out of this stupor.”

One potential catalyst for the yellow metal that surfaced last week was from John Paulson, the billionaire hedge fund magnate whose firm – Paulson & Co. – is the largest shareholder in the SPDR Gold Trust (GLD). Paulson told investors that he recently transferred some of his own capital out of his firm’s Credit Opportunities Fund and moved it into the Paulson Gold Fund to take advantage of the sector’s weakness.

UBS later stated in its report that “Until there is a clear sign as to whether it is taking on a safe-haven or a risk persona, investors are likely to continue keeping participation small and timelines brief. Instead, it’s quite likely that gold will wait and take its next directional cue from the FOMC (Federal Open Market Committee) meeting next week.”

As the firm alluded to, the Federal Reserve’s next monetary policy meeting will occur on Wednesday April 25th. There, the Ben Bernanke-led Federal Reserve is expected to maintain but not add to its current slate of accommodative policies. However, investors will be keeping a close eye on the language and tone of the FOMC meeting for any hints on a potential third round of quantitative easing (QE3).

At last month’s Fed meeting, the central bank exhibited a less dovish stance than most investors were expecting – which helped pressure the price of gold in the days that followed. However, several economists still expect the Fed to launch further accommodative measures by the June FOMC meeting. One individual in this camp is Jan Hatzius, chief U.S. economist at Goldman Sachs. Hatzius recently stated that the firm’s “baseline” scenario is that “we will see something in the second quarter” with regard to additional Fed easing.

Chairman Bernanke and his fellow central bankers are “encouraged by the improvements in the labor market they’ve seen but they want to keep them going,” the Goldman Sachs economist added. “And they’re concerned if the economy doesn’t accelerate and GDP growth doesn’t pick up from here, that maybe we’ll see a slowdown in the pace of those gains.”

Gold price correction since the high last August drawer to a close

noreply@blogger.com (Durian Edge) — Sun, 22 Apr 2012 23:35:00 +0000

The gold price ranged closing last week meager $7.74, practically dead and not twitching. Rose $1.50 to $1,642.10, but fell $17 (1%) for the week. Aha! What's that I see on a one year chart? Could that be a bullish falling wedge that began in March and neareth its completion? Why, yes, indeed it could be, and is. It also argues that gold will not again visit $1,600.

The sad time of this long gold price correction since the high last August drawer to a close. It may yet be weeks away, but higher gold is coming soon. A break through $1,682 will prove it, a break below $1,600 gainsays it, but only for the nonce.