Browsing all articles tagged with Federal reserve
Jun
1

Gold falls 1.6 Percent Notches Second Sharp Monthly Loss

Precious metal knock down almost 2 percent on Friday following US data showing low inflation and improving consumer confidence dampened investor interest, with gold notching sharp losses for a second consecutive month.

A combination of declining fund interest, option expiration and squaring of books following investors covered short positions also sent open interest in US gold futures to its lowest in approximately four years traders said.

Data showing a six-year high in consumer sentiment weighed on yellow metal a traditional safe haven.

Carlos Perez-Santalla at brokerage Marex Spectron said that the metals were previously under pressure going into the end of the month as many people have a lot of short positions outstanding and the consumer confidence statistics just added fuel to selling.

Spot gold knock down 1.6 percent to $1,390.80 per ounce by 3:17 p.m. EDT (1917 GMT), its largest one-day loss in two weeks.

US Comex gold futures for August delivery settled down $19 at $1,393 per ounce, with trading volume almost 30 percent below its 30-day average.

Yellow metal had gained more than 3 percent in the previous three sessions as discouraging US growth data and jobless claims figures boosted expectations for continued Federal Reserve stimulus.

However for the month of May, precious metal fall 5.8 percent following April’s decline of more than 7 percent. On Thursday, CME data showed Comex gold futures open interest inched up less than 1 percent to 385,901 contracts, hovering near its weakest level since September 2009. The market gauge was 13 percent lower versus 445,517 lots previous Thursday.

Economic optimism and increasing investor interest in better-performing assets such as equities explained decreasing interest in the safe-haven metal.

Holdings in the SPDR Gold Trust, the world’s biggest gold backed exchange traded fund, remained unchanged at 1,013.15 tonnes on Thursday, following increasing for the first time in three weeks on Wednesday. However these are still near four-year lows, having lost almost 337 tonnes in 2013 so far.

May
18

Gold Drop Further in Longest Losing Streak in Four Years

Precious metal knock down on Friday for a seventh straight session, in its greatest losing streak since March 2009 because the dollar strengthened and investors cut exposure to the gold fearing further drops and choosing equities instead.

Yellow metal has lost almost 6 percent of its value in the six sessions through Thursday as stocks added on the back of strong US economic statistics and on fears the Federal Reserve could end its bullion friendly bond buying program.

Spot gold was losing 0.34 percent at $1,380.91 per ounce by 0538 GMT, having plunge to a four-week low of $1,369.29 on Thursday as renewed liquidation in precious metal’s ETFs and a recent drop below the $1,400 per ounce level spooked investors.

The gold is down 17 percent for the year and is on track for its worst weekly turn down in a month. Holdings in SPDR Gold Trust, the world’s major gold-backed exchange-traded fund, knock down to their lowest in four years.

Traders and dealers said Physical demand was also quiet on Friday as consumers in the largest gold buyers, China and India, wait for prices to stabilize or fall further.

Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore said many people are waiting on the sidelines as they are expecting another fall.

Demand in India is being hurt by central bank curbs on gold imports. Limits on bank batch have hit supply and triggered a sharp jump in premiums.

Indian gold futures chop down 1.5 percent on Thursday, extending losses for a second straight session to their lowest level in almost a month in line with global markets.  Lan said buying in India had plunge considerably from Monday, which saw the celebration of Akshaya Tritiya, considered an auspicious day to buy metal.

Premiums for gold bars in Hong Kong the main supply of gold for China, strike record highs this week on supply constraints.

Yellow metal demand knock down 13 percent to a three year low of 963 tonnes in the first quarter because rising jewelery demand and strong appetite for coins and bars failed to offset a sharp fall in investment, the World Gold Council says.

SPDR said holdings knock down 0.55 percent to 1041.42 tonnes on Thursday, the weakest in four years.

US gold future for June delivery was down 0.52 percent at $1,379.70 per ounce.

May
2

Precious Metal Holds Near 1 week Low, ETFs Outflows Persist

Precious metal held near its weakest level in practically a week on Thursday, following declines in holdings of exchange traded funds, equities and other commodities overshadowed the US Federal Reserve’s decision to uphold its loose monetary policy.

Prices fall $225 per ounce between April 12 and 16 on fears of a withdrawal of the Fed’s monetary stimulus and after the International Monetary Fund and the European Central Bank asked Cyprus to sell reserves as part of a bailout deal.

While the Fed’s money-printing to buy assets could stoke inflation, yellow metal has been overwhelmed by fears of sales by central banks and a fall in global bullion ETF holdings to their lowest since September 2009.

However this is unlikely to be sold on the open market. I consider another central bank will be buying it. China’s physical demand is still strong. This morning they are perhaps keeping a lookout to see where the market is going before purchasing.

Precious metal fell $3.05 per ounce to $1,453.69, having shed more than 1 percent in the previous session its largest daily drop since gold’s historic decline in mid-April. It smash a low of $1,439.74 on Wednesday, the weakest since April 25.

Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore said that people are more wary as yellow metal has been trading within the same trading band. Moreover, Europe has agreed on a loan deal for Cyprus, and one of the terms state that assets in bullion might be sold.

US gold for June delivery stood at $1,453.70 per ounce, climbed up $7.50.

In its statement subsequent a two-day meeting, the Fed reiterated it would carry on to buy $85 billion worth of bonds each month to support a moderately expanding economy that still has too high an unemployment rate.

Investors are now waiting for US non-farm payrolls report for April scheduled for release on Friday, which will signal the longer term predictions for the Fed’s monetary stimulus.

However instead of rallying on the news, yellow metal tracked other markets lower on renewed doubts over the Chinese and US economies following the latest economic data from both countries elevated doubts about the strength of the global economy.

The US economy is likely to have added 145,000 jobs.

March’s number chop down far short of expectations at 88,000, triggering a sell-off in riskier assets. Precious metal for June delivery added $9.70, or 0.7%, to $1,456 per ounce.

China’s factory sector growth eased in April as new export orders chop down for the first time this year, a private survey showed on Thursday, suggesting the euro zone slump and sluggish US demand may be risks to China’s economic recovery.

May
1

Yellow Metal Edges Down, Investors Cautious Ahead of Fed

Yellow metal ticked lower on Wednesday on a shortage of physical buying and as investors waited to see if the US Federal Reserve sticks to its stimulus programme to spur the economy, which may lift the metal’s appeal as a hedge against inflation.

Doubts that central banks money printing to buy assets will stoke inflation have been a key driver in boosting precious metal, which rallied to an 11-month high previous October following the Fed announced its third round of aggressive economic stimulus.

The Fed’s policy making committee ends its conference later in the day with a statement that could reflect recent weak economic statistics. Investors also await Friday’s non-farm payrolls data which will signal the longer term predictions for the Fed’s monetary stimulus.

Edward Meir, a metals analyst at futures brokerage INTL FCStone said that accommodative policies are generally seen as supportive for bullion, however as the events of the last few weeks have demonstrated, gold does not always move in lockstep with simple expansion in money supply.

In its place, it seems to pick up steam either as a result of disorder in the financial markets or on the back of higher inflation readings, neither of which seem to be dominant at this particular time.

Gold dropped $1.89 per ounce to $1,474.71 by 0602 GMT, with the market torn between expectations that the Fed will keep its current policy and daily outflows from exchange traded funds, as investors cut their exposure.

US gold futures for June delivery stood at $1,474.20 per ounce added $2.10.

SPDR Gold Trust, the world’s biggest gold backed exchange traded fund, said its holdings dropped 0.19 percent to 1078.54 tonnes on Tuesday, their lowest since September 2009.

However gold has recovered more than half of its $225 loss incurred among April 12 and 16, boosted by strong physical demand, especially in top gold consumers China and India.

The longer term trend has been broken to the downside. This fact is important as in a downtrend the default move of a price is lower in the absence of convincing fundamentals. With fundamentals only neutral, we think certain risk still persists.

Credit Suisse in a report said that with investment flows negative however monetary policy supportive, we consider a neutral fundamental rating is the most appropriate one. In contrast to neutral fundamentals, technical indicators are clearly negative.

Singapore and Hong Kong were closed for a holiday. A rush in buying of gold bars following the recent plunge in prices has led to tight physical supply in Asia.

In other markets, the US dollar eased on Wednesday as investors warily awaited the result of the US Federal Reserve’s policy meeting, although expectations the European Central Bank will cut interest rates on Thursday capped the euro.

Apr
30

Precious metal Down 1 percent; ETF holdings hit lowest Since Sept 2009

Precious metal fell 1 percent on Tuesday, falling into negative territory following some early bargain hunting, however daily outflows from exchange traded funds highlighted investor’s lack of confidence in the gold.

Tim Riddell, head of ANZ Global Markets Research, Asia said that from a technical point of view, while the rebound has been relatively solid it appears to be a more sustained correction of the drop that we saw from late March rather than a turn in trend.

Although yellow metal’s appeal as a hedge against inflation may be burnished by hopes the US Federal Reserve will continue its bond buying programme, flowing stock markets could tempt investors to ditch gold and shift to equities.

Actually what we need to see is a series of closes above $1,505 to take the pressure off, he added that a fall below $1,435 could trigger a favored technical pullback to $1,300 and potentially even as deep as $1,245.

US gold for June delivery gave up early increases and stood at $1,461.10, down $6.30.

US gold futures and Cash dropped to almost $1,321 on April 16, their lowest in more than two years, after a fall below $1,500 led to a sell-off which stunned investors, and encouraged them to slash holdings of exchange-traded funds.

Precious metal fell $14.18 per ounce to $1,461.61 by 0617 GMT.  It had increased slightly on Monday on expectations the Fed would keep the pace of its bond buying unchanged at $85 billion a month following less than expected US growth.

The SPDR Gold Trust, the world’s biggest gold backed exchange-traded fund, said its holdings dropped 0.22 percent to 1,080.64 tonnes on Monday from 1,083.05 tonnes on Friday to their lowest since September 2009.

A weak March employment report in the US and other softer signals from the economy seemed to kill off expectations the Fed could taper the pace of bond buying in next months.

Asian shares edged higher on Tuesday, a day after the S&P 500 index ended at an all-time high and as investor risk appetite was bolstered by expectations the European Central Bank and US Federal Reserve the will continue with growth supportive monetary stimulus measures.

The Fed is currently buying longer dated US Treasuries and mortgage backed bonds every month and is expected to vote to keep doing so at the conclusion of a two day policy setting meeting on Wednesday.

Fears that central banks money printing to buy assets will stoke inflation have been a key driver in enhancing gold, which rallied to an 11-month high in October last year subsequently the Fed announced its third round of aggressive economic stimulus.

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
25

Gold Rise to 1 Week High, Central Bank Purchases Hold up

Bullion climbed to its highest in more than a week on Thursday, enhanced by prospects of more central bank buying following a recent steep sell off in the gold, as a firmer euro also underpinned prices.

Turkey and Russia raised their gold reserves in March, the International Monetary Fund stated on Wednesday raising their holdings ahead of the spectacular plunge in prices this month that shocked ardent yellow metal investors and bulls.

Central bank purchases and surging physical demand helped precious metal bounce from a two year trough about $1,321 per ounce hit previous week. However daily outflows from exchange-traded funds, reflecting sagging investor confidence capped gains.

Gold reversed early losses and stood at $1,445.56 per ounce by 0621 GMT, climbed $14.76. It strike a high of $1,447.66 per ounce earlier in the session its loftiest since April 15 the day it posted its largest ever daily slump in dollar terms.

Bullion is torn between an increase in demand for jewellery and coins, and investors in ETFs cutting exposure because they became gradually more convinced the US Federal Reserve will look to end its bullion friendly bond buying programme by the end of 2013 or beginning of 2014.

Joyce Liu, an investment analyst at Phillip Futures in Singapore said if the price breaks above $1,447-$1,450 levels, there will be more upward momentum. If it does not we may see a further dip in precious metal prices.

Premiums for gold bars soared to multi year highs in Asia following a spate of physical buying ran down supplies, with dealers in top consumer India expecting a surge in imports this month.

Holdings of the greatest gold backed ETF, New York’s SPDR Gold Trust slump 0.38 percent on Wednesday from Tuesday, their lowest since late 2009.

Dealer in Singapore said strong physical buying in China is overflowing into Hong Kong. I heard if you have gold bars now people will buy them at $2.50 to $3.00 premiums.

US gold for June delivery climbed more than 1 percent to as high as $1,447.50, its largest since April 15, however some dealers cautioned the current rebound in cash and gold futures was far from sustainable.

Gold futures rise on Thursday in electronic trade, on track for a second consecutive proceed supported by strengthening physical demand for the gold and downbeat US economic figures.

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.

Apr
9

Precious Metal Pares losses, However Equities Attract Investors

Precious metal pared early losses on Tuesday as speculators and jewellers looked for good deal, however the yellow metal was under downward pressure following US stocks gained ahead of an earnings season that is expected to illustrate modest growth.

Ronald Leung, chief dealer at Lee Cheong precious metal Dealers in Hong Kong said that he can observe the chart point does not look good. The stock markets and bond are more interesting than gold.

He think $1,585 is the crucial point. If it can break above this level, another bull run or small covering will push up the market to $1,600 per ounce.

Speculators have also slashed their bullion net longs as the yellow metal typically seen as a safe haven asset ignored worries on the Korean peninsula and investors moved their money to equities, looking for better returns, despite concerns regarding the health of the US economy.

Precious gold knock down to as low as $1,569.94 per ounce and stood at $1,576.00 by 0628 GMT, increased $ 2.91. It sink to a 10-month low previous week following an unprecedented monetary stimulus from the Bank of Japan and expect for another European Central Bank rate cut failed to stem heavy selling of bullion by funds.

Yellow metal rallied to an 11 month high in October last year following the US Federal Reserve announced its third round of aggressive economic stimulus, lifting fears the central bank’s money printing to buy assets will stoke inflation. Gold has slumped around 6 percent so far this year following having posted annual gains in the past 12 consecutive years.

George Soros, Institutional investor stated that gold had been destroyed as a safe haven asset, however added that he expects continued central bank buying to support prices.

US gold for June delivery was at $1,576.10 per ounce, climbed $3.60.

Gold future for June delivery added $3, or 0.2%, to $1,575.50 per ounce during Asian trade. The move erased Monday’s loss that left June precious metal at $1,572.50 on the Comex division of the New York Mercantile Exchange.

Apr
8

Gold Fall as Fund Shift Observe Intact, TOCOM up on yen

Yellow metal dropped on Monday following rising by the most since November in the previous trading session on poor US jobs data with funds expected to carry on cutting bullion holdings for superior investment yields elsewhere.

Precious metal jumped nearly 2 percent on Friday following statistics showed US employers hired at the slowest pace in nine months in March, backing expectations the Federal Reserve will maintain its bullion boosting monetary stimulus programme.

However gold futures in Tokyo jumped approximately 5 percent to near all time highs following the yen slump to near four year lows on reports that the Bank of Japan would begin buying longer dated bonds instantly to beat deflation.

Joyce Liu, investment analyst at Phillip Futures said that Monday’s price fall shows the fund swing out of precious metal remains intact with the US economy usually expected to perform better in the longer term.

Spot gold slide 0.2 percent to $1,579.06 per ounce by 0309 GMT, also hurt by a firmer dollar against a basket of currencies.

People are actually pulling funds out of precious metal for better investments such as equities and real estate in emerging economies.

The kind of rally that we observe from 2009 to 2011 is no longer going to be there anymore, we are more or less used to having so much money flowing around in the economy.

Liu stated she perceive gold testing a support level of $1,530 per ounce possibly over the coming two weeks.

Gold hit a 10-month low of about $1,539 per ounce previous week and is down almost 6 percent this year.

Evan Lucas, IG Markets strategist said in a note to clients Sunday that the yellow metal was a major beneficiary of this data, because the less than expected jobs numbers saw a slight jump back into safe havens.

Precious metal finished Friday’s session with the climb of $23.50 or 1.5%, at $1,575.90 per ounce on the Comex division of the New York Mercantile Exchange, following the US Labor Department said the economy created 88,000 new jobs in March. That consequence was sharply lower than the 190,000 new jobs.

Gold future for June delivery climbed $1 or 0.1%, during Asian trading to $1,576.90 per ounce.