All about gold

Growing fears of rising inflation and a weak dollar continue to benefit gold

2011-04-30T21:42:00.000-07:00

Growing fears of rising inflation and a weak dollar continue to benefit gold and silver at the start of the week. Inflation-hedge buying is providing the main impetus for gold and silver, although a reduced appetite for risk is also playing its part. Chinese authorities raised reserve requirements over the weekend (to take effect on 21 April), the seventh consecutive increase since October last year. The move was not surprising off the back of March price data released on Friday which revealed that a) consumer inflation stands at 5.4% y/y, the highest level since August 2008, and b) producer inflation which also came in higher than expectations (consensus 7.2% y/y) at 7.3% y/y, indicating strengthening pipeline inflationary pressures.

Gold and silver have shrugged off the promise of more aggressive Chinese monetary conservatism. The reaction of platinum and palladium is in line with base metals, and could be ascribed to concerns over industrial demand in China should authorities continue to tighten monetary policy. Moody’s downgrade of Irish long-term bank deposits could further increase interest in Gold, in that it might return nvestor focus to the Eurozone debt situation and the threat of financial contagion. However, given the current lack of interest in PGMs, we would expect gold and silver to be buoyed the most by this news.

While gold and silver seem to be enjoying support it is worth noting some changes in speculative activity. According to the most recent CFTC data, net speculative length for COMEX Gold declined marginally, ending three weeks of consecutive gains. Given that the changes in speculative positions were minimal, we would not take this as a signal of a market turning
bearish on gold as yet, but do consider it something to keep an eye on. The dramatic increase in short silver positions over the past two weeks and last week’s fall in speculative longs do raise concerns that markets expect a correction in silver’s recent rally; this has pushed prices to record highs.

Gold support is at $1,471 and $1,463. Resistance is at $1,489 and $1,497.

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An encouraging sign that investors are less bearish on gold

2011-04-30T17:31:00.000-07:00

Last week saw open interest begin to climb after having reached the lowest point for March in the previous week. As of last Friday, gold open interest stood at 1,622 tonnes on COMEX, from 1,609 tonnes the previous Friday. Accompanying this rise in open interest was a modest 0.8% w/w rise in the gold price.

Net speculative length also signalled tentative interest in gold, as it too rose from March’s low of the previous week. Rising 15.8 tonnes over the past week, the net speculative position for gold now stands at 676.9 tonnes. The rise was largely due to a removal of 35.5 tonnes in speculative shorts, even though at the same time, speculative longs fell by 19.7 tonnes. Although the increase was modest, it is an encouraging sign that investors are less bearish on gold. Should safe-haven demand remain intact, we could see gold recover from the liquidations seen in the immediate aftermath of the earthquake in Japan.

Speculative shorts, currently at 111.2 tonnes, are within touching distance of this year’s low (recorded in early January) of 103.6 tonnes. Should risk aversion continue to dominate markets (political unrest in the MENA region and debt concerns in the Eurozone), these short positions could fall further. The rise in open interest was more than offset by the increase in net speculative length, pushing the ratio of the two marginally higher, to 28.4% (from 28%). This is still largely in line with the 31% average seen during 2010. Although ETF holdings shed 0.5 tonnes, this is a fairly modest decline and should not cause alarm.

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Gold rebounded briefly yesterday off light physical interest and investor bargain-buying

2011-04-30T14:25:00.000-07:00

Gold rebounded briefly yesterday off light physical interest and investor bargain-buying. However, with the open of New York markets, investor confidence faded and selling ensued. This liquidation gained momentum overnight ahead of the Asian market open, as investors grew anxious about a repeat of the previous day’s massive sell-off on TOCOM. In addition, sales of gold and silver were mostly likely worsened by the need to cover losses on equities and other commodities.

Asian trade began with initial bout of good buying of gold and silver, and even a light uptake of PGMs, however sentiment once again soured as the Nikkei initially plummeted 4%. Equities subsequently recovered bringing the Nikkei to close down by only 1.4%. Gold mirrored the rebound in equities, and the momentum as continued into this morning’s trading session. Buying interest remains relatively strong, although PGMs remain vulnerable to liquidation.

Developments in the nuclear crisis in Japan will have a significant influence on whether Gold, can sustain the upward momentum. US bond markets reflect speculation that monetary policy tightening could be put off for a while longer than originally expected. Given that break-even inflation remains largely unchanged, we ascribe this more to lower economic growth prospects rather than lowered inflation expectations. While a slowdown in growth might hurt PGMs, a longer period of loose monetary policy would benefit gold and silver from a liquidity perspective.

Gold support is at $1,393 and $1,385. Resistance is at $1,408 and $1,414.

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Gold shrugged off fears over an earlier monetary tightening in the US

2011-04-30T09:53:00.000-07:00

Gold shrugged off fears over an earlier monetary tightening in the US, and continued to climb yesterday. The support for prices is largely attributable to persistent global uncertainty in the form of the ongoing conflict in Libya (and unrest in other parts of MENA), a renewed focus on the European sovereign debt situation (Moody’s has most recently downgraded Portugal’s sovereign rating), and a stronger oil price (Brent is back at $120) that has stoked fears over global inflation.

Bernanke’s comments that the Fed views the increase in inflation driven by commodity prices as transitory is good from a liquidity perspective, as it implies that the fears over an earlier exit from the Fed’s monetary accommodative stance are unwarranted. The downside is that this might deter Gold buying by investors with an inflation-hedge motive. For now, we
believe that the liquidity view still dominates, and together with the MENA political tensions and Eurozone fiscal issues, should continue to support Gold.

Today’s increase in China’s lending and deposit rates will most likely prompt some knee-jerk selling of Gold. However, we maintain that this is temporary, with the true negative effects on commodities only evident in 12-18 months, when monetary policy actions start to impact on the real economy. In addition, base metals feel the impact far more than Gold. For the rest of today, markets will be looking to the release of the FOMC minutes this afternoon, for any change in the Fed’s inflation outlook or monetary policy stance.

Physical buying in gold and silver is still evident on dips, which is placing a limit on any downside.
Gold support is at $1,427 and $1,420. Resistance is at $1,441 and $1,447.

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Volatility in Gold markets increase as the QEII deadline of June draws near

2011-04-30T05:50:00.000-07:00

Yesterday saw some weakness across the Gold, most likely in response to strengthening initial US employment numbers. Challenger job cuts data showed a 36.6% y/y fall (from a 20% y/y increase in previously). ADP figures revealedthat 201k jobs were added. This might’ve buoyed optimism over the US economy and strengthened fears over monetary tightening. Hawkish comments by Fed members Hoenig and Bullard added to these concerns. As highlighted yesterday, uncertainty and increased speculation concerning US monetary tightening, could see volatility in Gold markets increase as the QEII deadline of June draws near. This could be particularly acute next as investors attention will be drawn to the issue as the ECB prepares to hike rates.

For now, markets are more firmly focused on the unrest in Libya and concerns over the European debt situation. The results of the Irish Central Bank’s stress tests will be crucial to market sentiment. Consensus predicts that banks will have to raise an additional $38.7bn. A particularly disappointing outcome could see Gold benefit.

Gold support is at $1,417 and $1,405. Resistance is at $1,436 and $1,443.

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Gold support is at $1,447 and $1,435.

2011-04-30T02:06:00.000-07:00

As oil prices dropped dramatically yesterday (fuelled by concerns that higher oil prices would result in demand destruction, implying a deterioration in the global growth outlook), Gold tracked the rest of the commodities complex lower.

However, as the Asian markets opened this morning, some resilience was evident among the Gold, in particular gold and silver. This recovery from yesterday’s fall has been steady, although the complex is far from yesterday’s highs. A weaker dollar and a recovery in oil prices are providing support for gold and silver. As usual, it is silver which is benefiting the most, with large volumes indicating that technical buying is largely responsible for the gains. For PGM, sporadic demand has managed to lift prices, although this group still looks vulnerable. Eurozone industrial production for February, although disappointing expectations, has shown an improvement on January (7.3% y/y, compared to 6.3% y/y respectively).

The release of the Fed’s Beige book later today will most likely be closely watched. As highlighted before, markets will most likely focus on any signals that the Fed might be contemplating an early exit to its planned $600bn in monetary accommodation. To this end, signs of a strengthening US economy or rising inflation might darken the outlook for continued monetary accommodation and abundant global liquidity. Given the strong positive relationship between Gold and global liquidity, this could shake confidence in the complex, prompting some downside for prices.

Chinese money supply figures (including new yuan loans) are also scheduled for release this week. These might spark a knee-jerk sell-off in Gold should they reveal a slowdown in monetary expansion.

Gold support is at $1,447 and $1,435. Resistance is at $1,470 and $1,480.

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Gold have run into some light selling into the start of this week

2011-04-29T21:12:00.000-07:00

After ending last week on a high note, Gold have run into some light selling into the start of this week. Market participants are tentatively seeking out riskier positions, which has reduced safe-haven demand for precious metals. In addition, after the recent rally some investors are starting to feel that precious metals might be overbought (especially silver), which has led to some profit-taking.

Once again, with not much in terms of data flow today, comments by Fed members, this time Dudley and Yellen (scheduled to speak at events later today) may prompt some activity in Gold markets. Should any comments increase speculation that Fed members are becoming increasingly polarised on the issue of monetary accommodation, we could see volatility in Gold. We still foresee that as the deadline for QEII draws near, increased uncertainty and speculation among market players concerning the possible paths the Fed might follow could result in increased volatility in Gold prices.

For the week ahead, the release of the Fed’s Beige book and US inflation figures will most likely be closely watched. Here too markets will focus on any indications that the Fed might be contemplating an early exit to its planned $600bn in monetary accommodation. To this end signs of a strengthening US economy or rising inflation might darken the outlook for continued
monetary accommodation and abundant global liquidity. Given the strong positive relationship between Gold and global liquidity, this could shake confidence in the complex, prompting some downside for prices.

Gold support is at $1,457 and $1,447. Resistance is at $1,477 and $1,486.

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Growing fears of rising inflation and extended dollar weakness

2011-04-29T18:06:00.000-07:00

During late afternoon trade yesterday, in particular gold and silver, enjoyed support from growing fears of rising inflation and extended dollar weakness. The trade-weighted dollar index drifted to a low of around 74.7, a level last seen in December 2009. After the ECB’s rate hike last week and Fed members’ comments, together with the Fed’s Beige book indicating that the US central bank would be staying the current course of monetary accommodation, investors have been drawn to the euro in anticipation of a widening US-Eurozone interest rate differential.

Speculation that Chinese consumer inflation would be closer to 5.3% y/y (rather than the consensus expectation of 5.2% y/y) also pushed precious metals markets higher on inflation-hedge buying. As it turns out, China’s price data revealed that consumer inflation for March stood at 5.4% y/y, well above expectations and the highest level since August 2008. Producer inflation also came in higher than expectations (consensus 7.2% y/y) at 7.3% y/y an indication of strengthening pipeline inflationary pressures. At the onset this contributed to further inflation-hedge buying, but since the darkens China’s outlook for inflation it might raise the threat of more aggressive monetary conservatism by Chinese authorities (especially given that Q1:11 GDP figures were also unexpectedly strong). This could be bearish for commodities
in general, although the effect on base metals could be particularly acute.

Eurozone consumer inflation figures also bested expectations, coming in at 2.7% y/y for March (consensus: 2.6% y/y). This should provide support for precious metals from two angles, in that it both
(a) heightens fears over rising inflation and
(b) raises the prospect for further ECB rate hikes and consequently a weaker dollar.

Gold support is at $1,458 and $1,444. Resistance is at $1,482 and $1,490.

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Volatility in Gold markets as the QEII deadline of June draws near

2011-04-29T13:21:00.000-07:00

Gold in particular, were buoyed by disappointing US consumer confidence numbers. The Conference Board’s measure fell to 63.4 in March, from a revised 72.0 in the previous month. Given that expectations were already quite low at 65.0, this result proved particularly disheartening. As an indication that the US economy was still fragile (consumption expenditure
accounts for 70% of GDP), the consumer confidence figure would ease worries over a premature exit from the Fed’s monetary accommodation. Given the strong positive relationship between global liquidity and precious metals (especially gold), this is supportive of the complex.

However, subsequent comments by various Fed members shows that the FOMC might be increasingly polarised on the issue of the timing of monetary tightening. Such uncertainty and increased speculation, could spark a rise in volatility in Gold markets as the QEII deadline of June draws near. Physical buying of gold has been relatively quiet overnight, dampened perhaps by speculation that India is considering regulatory changes to commodity imports.

Gold support is at $1,412 and $1,405. Resistance is at $1,425 and $1,430.

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Gold once again came under pressure off the back of encouraging US data flow

2011-04-29T08:25:00.000-07:00

Gold once again came under pressure off the back of encouraging US data flow. Personal spending figures for February increased by 0.7% m/m, a better-than-expected result (consensus: 0.5% m/m) and a marked improvement on January’s increase of 0.3% m/m (revised). Pending home sales data also showed an unexpected increase, showing a 2.1% m/m in
February. This was particularly encouraging after the 2.8% m/m and 3.2% m/m declines seen in January and December, respectively.

The uptick in consumer spending and signs of a strengthening housing market have boosted investor optimism that the US economy is entering a more solid phase of growth. Consequently, the appeal of precious metals as a safe-haven has been diminished. However, over the medium term, global uncertainty (unrest in the MENA region, the Eurozone debt crisis and the prospects for the Japanese economy) remains high and we could see renewed interest in the complex, especially if there are any developments perceived as negative on these issues.

For today, given the focus on US data flow, we would watch this afternoon’s consumer confidence release closely. A disappointing number could dent the current optimism surrounding the US recovery and see safe-haven demand come back into vogue. However, given that expectations are already quite low (the measure is expected to fall to 65.0 in March, from 70.4) we believe that the risk of a disappointing figure is relatively low. Consequently, interest in precious metals could remain lacklustre for today.

Gold support is at $1,406 and $1,398. Resistance is at $1,426 and $1,438.

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Gold and silver which have benefited the most from inflation-hedge buying

2011-04-29T04:40:00.000-07:00

In general, the Fed’s Beige Book was read as favourable to maintaining the current course of monetary accommodation. To this end, the impact on Gold was minimal. The report showed that manufacturing continued to improve modestly, with “slight gains” in consumer spending. While inflation pressures off the back of rising commodity prices was mentioned, the lack of wage pressure implies no significant change to the Fed’s outlook for inflation.

Consequently, this does not warrant any consideration being given to withdrawing monetary stimulus, as yet. The release of Chinese monetary supply and credit extension data this morning, in that it bested market expectations should provide some short-term support for commodities. In addition, the unexpected increase in China’s foreign reserves (currently $3,044.7bn, from $2,991.4bn) should provide support for Gold from a global liquidity perspective. Investor speculation that the Fed will lag the ECB in raising interest rates has led to a weaker dollar (both in relation to the euro and from a trade-weighted perspective), which is broadening the appeal of precious metals as an alternative investment.

In light of tomorrow’s release of Eurozone and China’s price data, the threat of rising inflation is also front of mind for many investors. Again, in particular gold and silver which have benefited the most from inflation-hedge buying.

Gold support is at $1,451 and $1,446. Resistance is at $1,463 and $1,468.

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Gold buying as an inflation hedge

2011-04-29T00:05:00.000-07:00

After a relatively lacklustre trading day in New York, Gold ran into some selling at the open of Asian markets. Platinum and palladium were the hardest hit, with fund liquidations suspected on both NYMEX and TOCOM. For the most part though, Asian trading volumes were light as participants took to the sidelines in anticipation of today’s ECB rate decision.

Other global markets will most likely follow suit, with not much activity expected as participants await the ECB decision later today. It is widely expected (given the explicit signals from the ECB) that rates will be hiked by 25 bps, therefore, the actual decision should not spark much activity. However, the tone of the announcement will be looked at for an indication of whether this is a one-off or forms part of continued policy of monetary tightening. The latter might raise fears of future inflation and contribute to some Gold buying as an inflation hedge. In addition, sings of further rate hikes in Europe could lead to some dollar weakness against the euro, lending further support to Gold prices.

With Portugal in the face of record high borrowing costs now seeking a bailout from the European Union the threat of sovereign debt contagion in the Eurozone should keep investors sufficiently interested in the safe-haven aspect of Gold. Once the ECB announcement is out of the way, this should provide the potential for further upside.

Gold support is at $1,451 and $1,445. Resistance is at $1,463 and $1,468.

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Gold yesterday on raised risk aversion, stemming from several developments

2011-04-28T19:21:00.000-07:00

Gold yesterday on raised risk aversion, stemming from several developments. A bombing in Jerusalem further raised concerns over political stability and the possibility of further turmoil in the MENA region. The rejection of austerity measures by the Portuguese parliament has once again brought the Eurozone sovereign debt crisis into the spotlight. In addition, sentiment has been soured further by speculation that Moody’s will downgrade Spanish banks. The threat of financial contagion throughout the Eurozone is continuing to encourage interest in precious metals as a safe-haven. Not much is expected, in terms of a comprehensive package to address the debt crisis from the EU Summit starting today. For the most part, the rally in gold and silver continues, with silver leading the way on approach of new highs.

Gold support is at $1,430 and $1,420. Resistance is at $1,446 and $1,451.

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Steady support for gold intact

2011-04-28T15:31:00.000-07:00

According to last week’s CFTC data, gold’s net speculative length remains largely unchanged w/w. The futures market positioning remains largely natural for gold. However, we still see gold’s bias to the upside on a 12-month basis. Last week, COMEX non-commercial longs in gold increased by13 tonnes, from 788 tonnes to 801 tonnes. The shorts have increased by a mere 2 tonnes, to 113 tonnes. The net non-commercial, or speculative position currently stands at
688 tonnes, still well below the 800 tonnes plus of Q3:10.

The speculative position as a percentage of open interest (OI) is at 31.8%, in line with the average level of 33% over the past two years. We believe that the current speculative length reflects gold’s range-bound trade ($1,400 to $1,450) over the past two months. While the futures market is not overly bullish on gold, the physical market is still a steady buyer of gold. This buying interest is not exceptionally strong but certainly persistent.

Also, the physical market is once again adjusting to a higher gold price — which we view as bullish. Before March, we were unlikely to see much buying above $1,400. Now, we see increased buying whenever gold dips towards $1,400. Tactically, we see good value in gold below $1,385. At the moment, gold looks overbought above $1,450. This trading range could well prevail for most of Q2:11 until seasonal jewellery demand improves in Q3:11. Our strategic view remains unchanged: we maintain that gold will push higher in 2011. We still target $1,500 for Q3:11.

Core to our strategic view on gold is global liquidity and real interest rates — we view these as the casual long-term drivers of gold. Real interest rates remain exceptionally low. As far as liquidity is concerned, we measure global liquidity as the Fed's balance sheet plus global FX reserve holdings. Therefore, if the Fed contracts its balance sheet by 5%, global liquidity declines by only 1.5%. Any decline in the Fed’s balance sheet is negative for gold. However, we also
note the other component in our measure of global liquidity — FX reserve holdings — is likely to grow as long as governments in major economies need to borrow. In fact, global FX reserve holdings are up 3.5% YTD. Our strategic view is unchanged: we believe that gold will
push higher in 2011 and we still target $1,500 for Q3:11.

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Gold support still firm

2011-04-28T12:26:00.000-07:00

Gold is finding resistance on approach of $1,430. While this may continue for some time, and we do not discount a correction towards $1,380, we still believe that gold will touch new highs in 2011. As pointed out on in Commodities Daily of 25 Feb 2011, apart from heightened risk aversion due to the political tensions in the Middle East, the rise in crude oil is resulting in
secondary developments which we believe are adding further support to gold. Also, real interest rates have been dropping like a stone again. Currently, the US 5 year inflation linked bond yield is at its lowest level since at least 2004.

The decline in real interest rates is the result of a rapid increase in inflation expectations in recent days, while nominal interest rates remain largely unchanged. As pointed out in Commodities Daily yesterday, given that
inflation has been largely absent in the US, and the US Fed doesn't target inflation explicitly, the likelihood of the US raising nominal rates remains small. In fact, the probability the futures market assigns to a rate hike of 25 bps by year-end has declined in recent weeks, from 36.8% at the start of January, to only 22% yesterday.
Furthermore, we view the statement by the Bank of Japan this morning, where they indicate they would pursue powerful monetary easing and continue to pursue ample liquidity, as bullish for gold. Therefore, given that short-term nominal rates aren’t likely to rise, real interest rates should remain low by historical standards. Furthermore, as long as the Fed continues to expand
its balance sheet, and other countries continue to accumulate foreign reserve assets, global liquidity should continue to grow. We therefore expect gold to move higher in 2011.

We believe that gold could touch $1,500. At this stage, we target $1,500 in Q3:11, as in the interim we foresee seasonal weakness in the physical gold market. The end of Q1 and Q2
typically see gold scrap volumes increase, which is likely to subdue the gold price.

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Gold continued to benefit from safe-haven

2011-04-28T08:01:00.000-07:00

Gold continued to benefit from safe-haven demand through most of yesterday’s trade. Technical buying and short covering added further impetus to gold and silver prices as the New York session opened. With the re-opening of Asian markets, some profit-taking was evident as Chinese investors returned after two days of holiday. However, this was not enough to
significantly reverse gains. As anticipated, the negative impact on prices in response to the increase in China’s lending and deposit rates was short-lived.

However, in the long term, as the real economy begins to feel the affects of monetary policy (we find a lag of about 12-18 months), the effect on commodities should become evident. Amongst the Gold, it is platinum and palladium that are worst affected by tighter monetary policy in China (although base metals are affected far more). Whilst assuring that the Fed was unlikely to change the current asset purchase plan expiring in June, the release of FOMC minutes revealed an increasing polarisation amongst members. Some are calling for “exceptional monetary accommodation” to be extended beyond 2011, while others warn that inflationary pressures warrant tighter policy this year. As the deadline for QEII draws near, we foresee increased uncertainty and speculation among market players concerning the possible paths the Fed might follow, resulting in increased volatility in precious metals markets.

Gold support is at $1,438 and $1,420. Resistance is at $1,466 and $1,476.

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The environment for Gold trade should remain favorable this week

2011-04-28T03:23:00.000-07:00

The environment for Gold trade should remain favorable this week, with a fresh focus on the Fed likely to offer strong support. Gold prices should advance toward $1,540/oz over the next couple weeks, while silver could easily rise toward $50/oz. Support will come from accommodative monetary policy, tensions in the Middle East, a weaker dollar, and signs of investment inflows. First-notice in silver is on Friday and any potential squeezes could keep it buoyed. Thursday’s news regarding Scotia Mocatta’s registered silver inventories could do the same.

Moderate pressure will come from overbought conditions and strength in the stock market, but we think these will be fairly minor. We favor trading gold and silver as positive trading affairs, and maintaining our long position in July platinum from $1,740. We’ve been unable on our long gold recommendation for the last week.

The focus this week will be on the FOMC meeting on Tuesday and Wednesday, with a policy decision to be communicated on Wednesday. This will be the first Fed meeting with a press conference afterward, which could create additional volatility for markets as every statement is read into. The meeting has been expected to lay the groundwork for an exit from quantitative ease, as the next meeting comes only about one week before the June 30th finale of QE2. The issue to watch will be whether QE3 is signaled, or conversely how fast the Fed’s balance sheet
will be unwound. The WSJ reported on Thursday that Fed Chairman Bernanke appears intent on leaving ultra-low rate policy in place for now. That would suggest that there will not be a QE3, but that previous quantitative ease will not be unwound quickly. Such a condition should be supportive for Gold because it would signal that the Fed still has an uncertain view on the economy and is holding the potential for new rounds of QE close at hand.

Support will also come from ongoing tensions in the Middle East. The main opposition group in Bahrain warned the government that angry Shiite youths could “explode” if the Sunnite led government did not end its efforts to purge Shiites from state jobs. Violence is still prevalent in Libya, where the war between Gaddafi and rebels has been in a stalemate. Concerns for Gold center on safe-haven inflows as well as on oil price inflation sparked by shortages of Libya’s supply of light sweet crude oil. The loss of Libyan oil has increased competition between buyers
of other sweet grades from Algeria and Nigeria. Supplies in Nigeria aren’t certain because of renewed violence there in the wake of the Apr 16th elections.

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Gold Price Hits USD1,500

2011-04-27T22:51:00.000-07:00

Despite a resurgence in risk appetite (equities are up across the globe and emerging market currencies are strengthening), Gold continue to benefit from steady safe-haven demand. Gold posted another record high, for the fifth consecutive day, while silver pushed to the highest price seen since January 1980, before easing slightly lower. Even PGM, the laggards in recent weeks, have posted some strong gains.

The main impetus appears to be concerns over rising inflation, leading investors into Gold as a means of protecting their wealth. Lingering concerns over the Eurozone debt situation (speculation is that the Greek fiscal restructuring might occur as early as this weekend) and the Libyan stalemate are also making for healthy interest in precious metals. Extended dollar weakness (a trade-weighted basis the dollar currently stands at 16-month low) is another factor providing support for the metals.

We expect the impetus to remain to the upside today. However, markets are relatively illiquid ahead of the holidays. Therefore, we would caution that prices could respond erratically to any developments/announcements. In terms of data flow, the most significant today would be US jobless claims and leading indicator figures. Should the numbers prove to be appreciably worse
than expected, this might limit they upside for PGM, given the market’s recent concerns over industrial demand.

Gold support is at $1,498 and $1,488. Resistance is at $1,512 and $1,516.

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US Consumer Confidence numbers - poor result might benefit gold and silver

2011-04-27T19:50:00.000-07:00

Yesterday saw an aggressive bout of speculative selling and profit-taking in afternoon trade. For gold and silver the trigger occurred around the $1,450 and $38 levels. Since then, gold and silver have started to rebound, with silver leading the way.

Continued conflict in Libya, growing focus on the European debt crisis and uncertainty surrounding the longer-term impact of the Japanese earthquake should keep investors interested in gold and silver. Poor durable goods out of the US, may also be lending support. Durable goods orders fell 0.9% m/m in February, far short of the 1.2% m/m increase the market expected. Signs that the US economy remains fragile are bullish for precious metals as it alleviates fears over an early reigning in of monetary accommodation.

To this end, US Consumer Confidence numbers, out later today, could prompt some reaction. Given that consumer buying remains the engine of the US economy (consumption expenditure accounts for around 70% of GDP), a poor result might benefit gold and silver.

Gold support is at $1,422 and $1,411. Resistance is at $1,447 and $1,460.

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Gold soared within touching distance of $1,500

2011-04-27T15:17:00.000-07:00

The announcement that S&P has changed the US credit rating outlook to negative, broadened the appeal of gold and silver has an alternative investment amid fears of a faltering global recovery. This added to the risk-off sentiment stemming from continued unrest in the MENA region, and the ongoing fears over the Eurozone region’s lingering sovereign debt problems.

Gold soared within touching distance of $1,500, before profit-taking spurred a fall below $1,490 during Asian trade. Interestingly, silver was not leading the charge the time around, with erratic price action curbing the metal’s gains as investors appeared to ignore the market. With risk aversion at heightened levels and the dollar weakening, we expect gold and silver to enjoy continued support today, although the $1,500 mark proves a significant psychological barrier for gold.

Gold support is at $1,482 and $1,470. Resistance is at $1,503 and $1,510.

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Gold has long-term resistance at $1,540/oz.

2011-04-27T11:41:00.000-07:00

Gold will witness an environment today that is nearly as positive as has recently been the case, but we favor taking on a more cautious tone today. The market will look for support from the potential that the Fed leaves monetary policy accommodative at tomorrow’s meeting, ongoing tensions in the Middle East, and to inflows of investment in order to keep the rally in motion. Gold has long-term resistance at $1,540/oz. Opposing pressure will be offered by signs that silver has entered a speculative frenzy due to wide price swings and from yesterday’s 9.2% hike in silver margins by the CME. We had been treating both gold as positive affairs in the last few
weeks, but would go neutral in the short-term until the markets settle down a bit.

The second focus of the market will be the Fed. An article in yesterday’s WSJ suggested that the Fed is discussing how to raise rates rather than when to raise them. The article was a change from Thursday’s suggestion in the paper that Fed Chairman Bernanke was intent on leaving ultra-low rate policy in place for now. Yesterday’s article showed that the Fed is apparently in discussions on either shrinking the balance sheet or paying interest on reserves held at the bank. It suggested that because there is so much liquidity held by banks, raising the Fed Funds rate may not have a normal effect. Because the Fed decision now appears to possibly go either way, we think it’s prudent to turn neutral on Gold in the short-term.

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Gold have enjoyed the support coming from a weaker dollar

2011-04-27T08:06:00.000-07:00

Along with the other commodity groups, Gold have enjoyed the support coming from a weaker dollar, after yesterday’s rate hike by the ECB. A clear indication that the moves are mostly driven by the forex market is that in euro terms, precious metals prices remain largely unchanged. Although some profit-taking was evident, short-covering managed to push
prices higher.

With not much in terms of data flow today, comments by Fed members Fisher and Lockhart (scheduled to speak at events later today) may be seized upon. Should any comments increase speculation that Fed members are becoming increasingly polarised on the issue of monetary accommodation, we could see some volatility in precious metals markets. As highlighted previously, we foresee that as the deadline for QEII draws near, increased uncertainty and speculation among market players concerning the possible paths the Fed might follow could result in increased volatility in Gold prices.

Gold support is at $1,459 and $1,449. Resistance is at $1,472 and $1,475.

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Gold price as bulls found it difficult to break through the $1,500 level

2011-04-27T03:56:00.000-07:00

Overnight there was little movement in the gold price as bulls found it difficult to break through the $1,500 level. A quiet trading session saw the price confined to a $10 range. Resistance was short lived however with a combination of dollar weakness and fresh buying this morning finally propelling gold above $1,500 during London trade.

Fears that the global economic recovery might be in jeopardy, sparked by S&P’s ratings outlook downgrade of the US, have been dispelled by strong corporate earnings results and a steady improvement in US housing data. US Treasury Secretary
Geithner’s assurances that the government was making progress towards a deficit-reducing budget might also have emboldened
markets. He even ventured so far as to say in a television interview that the US would “absolutely” keep its AAA credit
rating. Despite the general sentiment appearing to have shifted to a risk-on stance, precious metals are still managing to gain
ground. Part of this can be explained by resurgent dollar weakness, both against the euro and in trade-weighted terms.
Given that the recent concerns over the global recovery appeared to reignite doubts over industrial demand for PGM (as evidenced
by the divergence in PGM prices from gold), this renewed bout of optimism should provide support for platinum and
palladium today.
Gold support is at $1,494 and $1,485. Resistance is at $1,507 and $1,509.

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Target Gold Price Hits USD1,500 in Q3:11

2011-04-26T23:52:00.000-07:00

COMEX gold has seen the net long non-commercial position decline to 27.96% of OI, down from 30.5% the previous week. Current levels are below the average level of 33% over the past 2 months. We believe that gold could touch $1,500. At this stage, we target $1,500 in Q3:11, as in the interim we foresee seasonal weakness in the physical gold market. The end of Q1
and Q2 typically see gold scrap volumes increase, which is likely to subdue the gold price.

The Gold support is at $1,406 and $1,393. Resistance is at $1,436 and $1,458.

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The physical market remains a net buyer of gold

2011-04-26T19:27:00.001-07:00

Gold, which are closely linked to liquidity, there is also risk of a really good employment number. We believe that a sell-off in especially gold would be a kneejerk reaction rather than a fundamental shift. As pointed out yesterday, the market may interpret a good number as a sign that the Fed will start to decrease their balance sheet. However, the Fed's balance sheet is only about a third of global liquidity (as we measure it). We measure global liquidity as the Fed's Balance sheet plus global FX reserve holdings. Therefore, if the Fed contracts their balance sheet by 5%, global liquidity declines by only 1.5%. 5% of the Fed's balance sheet is large — $130bn.

We also note that the other component in our measure of global liquidity — FX reserve holdings — is likely to continue to grow. In fact, global FX reserve holdings are up 3.5% YTD. FX reserve holdings make up two-thirds of total liquidity. The physical market remains a net buyer of gold, with some scrap coming to the market when gold approaches $1,440.

We believe that this demand should remain in place, especially when the metal approaches $1,400. Support for gold is at $1,419 and $1,407. Resistance is at $1,442 and $1,452.

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Gold can be profitable

2011-04-19T06:45:00.000-07:00

Gold has attracted much attention as an investment product, and as a hedge against inflation.

One is to invest through a bank to provide capital account transactions of gold investors can buy and sell gold in the press, and even for physical gold.

However, prospective investors should consider the advantages and disadvantages.

The most obvious risk is the volatility of gold prices. The price has rallied recently, which is the main reason investors are interested. But it also could go the other way.

Investors to purchase the asset class, the bank should be aware that there is no principal protection on their investment, it attracts interest. If gold prices fall, investors suffered huge losses. Only by appreciating the potential benefits of the gold price.

Gold is still a good variety of investment products have the potential, especially in this period of global financial uncertainty and rapid inflation.

But small investors, especially the elderly, have a decent education costs and risks of investing in gold.

Bank to promote this product has a moral responsibility to explain to potential investors, all of the risks and costs, and involved the terms and conditions of the legal agreement will be signed.

Tips to Get the Most Money For Your Gold Article

2011-04-19T00:42:00.000-07:00

When I started to sell the first hint of gold jewelry, I met with a lot of confusing information, is frankly, I found a lot of garbage there. My goal, if you decide to sell valuables for extra cash in these very difficult economic times you can help you get more money for your gold jewelry It is used to identify the resources available. This is what you are looking to build your valuables, the advice to help you get more money. These tips will help move some of the various options when looking at the best place for you to sell their gold.

Tip Number 1

Before selling your unwanted gold and pawn shops, please think again. The gold buyer, this type, so the average person has merely benefited from your money, why. Lombard, offer low-income and the resale gold refinery, to be the maximum, allowing for the money. I have absolutely nothing against the Lombards. To find a large shopping local pawnshop has been my hobby for many years. You have a great home theater system to be used, if you search for a bike or lawn mower, and I go to the store, I think you find such a large purchase these items. But you are selling their gold, the real benefit actually, if you want to consider other options before selling to pawn gold items.

Tip Number 2

Before you start to sell gold jewelry locally unwanted confusion. As part of the precious metal made from you is nice, very nice piece of gold jewelry that has great value, and if there might be the best choice for your jewelry store. However, damaged or if you need gold earrings, several gold items, items only if you have a local jeweler, they have a real interest in any of these types of resale not. They may be able to buy the scrap gold, they will provide a lot of money does not exist.

Tip 3 №

Please try to find a buyer thinking about buying gold. If you've never heard of this type of gold buyers, I can fill you in on how they work. Normally, you'll go to my website where you enter information to receive a free set of mailing lists so you can send them your unwanted gold in your email. Various online gold buyers, call it something else, different things will be explained, they are basically the same service. Their overhead is low, many of them are actually a lot of ads. Since been reduced advertising expenses and other overhead costs are low, they usually pay cash offer for the money than the pawn shops and jewelry stores. Yes, it is easy.