Browsing all articles tagged with Commodity
Apr
29

Precious Gold Rises 1 percent, Holds near One Week High

Yellow metal rose more than 1 percent on Monday and held near its highest level in more than a week as a bounce back in prices from multi-year lows failed to control investor appetite for the gold’s, leading to a shortage in physical supply.

Current bleak US growth statistics that raised expectations the Federal Reserve will keep its current pace of bond buying at $85 billion a month also supported precious metal that is typically seen as a hedge against inflation.

However investors are still roiled by the very recent event of the tumble. The question is how supportable is this physical buying as at the same time, we are still seeing funds flowing out of yellow metal. Retail investors won’t be buying bullion in hundreds of millions of dollars like the funds.

Both cash gold and futures dropped to around $1,321 on April 16, their weakest in over two years, subsequently drop below $1,500 sparked a sell-off that encouraged investors to slash their holdings on exchange traded funds. They touched an 11 day high above $1,484 on Friday.

I don’t consider gold is out of the woods yet, however there’s room for upward correction. One of the reasons why precious metal has plunged so much was the strong signs of US economic recovery.

US gold futures which often give trading cues to cash metal, hit a high of $1,472.20 per ounce. By 0226 GMT, prices stood at $1,469.60 climbed $16.00. Spot gold gain $7.51 per ounce to $1,470.01.

Premiums for gold bars have jumped to multi-year highs in Asia as of strong demand from the physical market, which has led to a shortage in gold coins, bars, nuggets and other products.

In other markets, shares in Asia crept ahead on Monday however the US dollar lost ground to the yen as markets braced for a busy week for economic statistics and central bank policy meetings in the United States and euro zone.

Holdings on the biggest gold-backed exchange-traded-fund ETF, New York’s SPDR Gold Trust continue to drop, which was a sign investors have yet to reinstate their confidence in gold. The holdings are currently at their lowest since September 2009.

The current string of underwhelming statistics will strengthen the hand of the doves at the Fed and temper any talk of tapering back the bond buying programme. The policy setting Federal Open Market Committee will announce its decision at 1815 GMT on Wednesday.

Report by the Commodity Futures Trading Commission showed on Friday that yellow metal rallied to an 11-month high in October previous year after the Fed announced its third round of aggressive economic stimulus, raising fears the central bank’s money printing to buy assets would stoke inflation, money managers and Hedge funds trimmed their net longs in gold futures and options in the week to April 23 as investors reduced optimistic bets.

 

Apr
10

Gold Added on Japan Policy, Firm Equities May Weigh

Gold climbed up on Wednesday because Japan’s aggressive monetary easing policy enhanced bullion’s appeal as a hedge against inflation, while gains may be capped as stronger equities lure buyers seeking superior returns.

Brian Lan, managing director of GoldSilver Central Pte Ltd said that what the Fed really releases in the minutes tonight will influence the direction of gold. Yellow metal needs to test $1,600 before we see it trading in a higher band. If it does not there might still be a downside risk.

Investors are shifting their focus to minutes from the previous US Federal Reserve monetary policy conference for insight on the Fed’s bullion friendly bond buying programme, which sent prices to an 11 month high in October previous year.

It has fall about 5 percent so far this year, following posting annual additions in the past 12 years.

Investors will be looking out for any reveal of quantitative easing. The decision on whether the Fed will continue to print money, limit the print or slowly ease it out will definitely drive gold’s prices.

Precious metal had gained $2.14 per ounce to $1,586.84 by 0610 GMT, following hitting $1,590 on Tuesday, its highest since April 2.

Gold futures on Tokyo Commodity Exchange moved towards a ever high at 5,081 per ounce yen a gram strike in February as of a weak yen, however the climb in TOCOM failed to spur more additions in cash gold.

The addition in Tokyo gold futures weighed on yellow metal bars offered to investors. Precious metal were at discounts of 75 cents to spot London prices in Tokyo, against premiums of 50 cents previous week.

South Korea said it has invite China, North Korea’s only major supporter, to restraint the hermit state and has raised its surveillance following the North moved at least one long-range missile in readiness for a possible launch.

Gold future for June delivery were losing 90 cents, or 0.1%, in Asian trading hours to $1,585.80 per ounce. US gold for June delivery were stable at $1,587.00 per ounce.

Mar
29

Gold Knock Down, On Track For 5 Percnet Quarterly Slump

Yellow metal marked lower on Friday, on way to end the quarter with a loss of almost 5 percent, because the euro continued to weak and a rally in equities increased appetite for riskier assets. Shares climbed up in Asia and the gold’s safe haven appeal waned following banks in debt ridden Cyprus reopened on Thursday without rooting a huge run on deposits despite a contentious bailout that taxed huge depositors. Doubts regarding the fiscal stability of the euro zone had sent precious metal prices to a 1 month high previous week.

Kaname Gokon, general manager at Okato Shoji Co’s research section said that looking ahead, bullion is expected to stay in the current range of $1,590 and $1,605 per ounce, referring to coming week’s trading range.

However there is probability that those who have bought TOCOM futures on a weaker yen may start closing their long positions if a market focus is altering to a stronger dollar, which is negative to yellow metal.

Precious gold knock down $1.18 per ounce to $1,594.99 by 0332 GMT in particularly thin trade as many markets in Asia were closed for Good Friday. Prices were losing 4.7 percent for the first quarter its second consecutive quarterly loss.

US gold futures were not-traded. However the most active contract on Tokyo Commodity Exchange, In February strike a low of 4,842 yen a gram its lowest in three weeks, on position squaring on the previous business day of the fiscal year.

Gold future for June delivery knock down $11.50 per ounce or 0.7%, to settle at $1,595.70 per ounce on the Comex division of the New York Mercantile Exchange.