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May
25

Gold Fall, however 2.15 percent Weekly Rise Biggest in a Month

Precious metal turned modestly lower on Friday as some players exited positions ahead of a long US weekend however registered its largest weekly percentage gain in a month, supported by a fall in stock markets and a softer US dollar.

Comments from a Federal Reserve official that dampened talk the US central bank is set to restrain monetary stimulus also underpinned yellow metal prices, which stuck to a fairly tight range.

Spot gold was down 0.23 percent at $1,387.51 per ounce by 2:37 EDT (1837 GMT), slightly lower than $1,390.40 late on Thursday. It remained up 2.15 percent on the week, its largest weekly rise since late April.

COMEX June gold futures closed at $1,386.6 per ounce, drop $5.2 or 0.37 percent and held about those levels in after-hours business.

Bullion got a boost this week from declining equity markets, which in Europe on Thursday posted their largest one day drop in nearly a year. On Friday, US stocks knock down for a third day, putting indexes on track for their first negative week since mid-April.

Robin Bhar, metals analyst at Societe Generale Group in London, a weaker greenback combined with continued QE, some physical buying at the lower levels out to China in particular all of those factors have helped precious metal in the last few days.

QE refers to quantitative easing, or the Federal Reserve’s program of buying almost $85 billion per month in debt to keep US interest rates low and stimulate the economy.

The US dollar extended its decline against the yen and was on track for its largest weekly loss in three years against the Japanese currency. The euro climbed 0.7 percent this week against the dollar its first weekly addition in three periods.

During the US session, precious metal ventured into negative regions with some players reluctant to hang onto a long gold position over the extended Memorial Day weekend in the US, given the newest uncertainty about Federal Reserve policy.

Speculation the Fed would scale back its monetary easing program evaluate on yellow metal this week after Fed Chairman Ben Bernanke stated the central bank could start scaling back its $85 billion in monthly bond purchases in the next few meetings.

But, St. Louis Fed President James Bullard stated on Friday that US inflation would have to pick up before he voted to scale back stimulus.

Bhar said there’s a lot of uncertainty, there’s still no better than 50/50 chance that the Fed will unwind its stimulus or that the economy performs as they expect it will.

May
4

Job Market Resilience Eases Growth Concerns

Employment rose at a quicker pace than expected in April and hiring was much stronger than formerly thought in the prior two months, a sign of flexibility that should help the economy absorb the blow from belt tightening in Washington.

Labor Department said on Friday,non-farm payrolls increased by 165,000 jobs previous month and the unemployment rate dropped to 7.5 percent, the lowest level since December 2008. The job counts for February and March were revised up by a net 114,000.

Scott Anderson, chief economist at Bank of the West in San Francisco said that this boosts the case that the US economy will be able to survive the joint headwinds of sequestration and a deepening recession in Europe.

Investors on Wall Street cheered the statistics, which beat economists’ expectations for a 145,000 jobs advance and a steady 7.6 percent reading on the unemployment rate.

US stocks rallied, with the Dow Jones industrial average and the Standard & Poor’s 500 index closing at record highs. The US dollar vaulted to a one week high against the yen, however Treasury debt prices tumbled.

Payrolls climbed by 138,000 jobs in March, 50,000 more than formerly reported, and job growth for February was revised up by 64,000 to 332,000, the largest growth since May 2010.

However the gains previous month were far below the 206,000 jobs per month average of the first quarter, the newest evidence the economy is cooling even if not as rapidly as earlier feared.

Construction employment dropped for the first time since May and manufacturing payrolls were flat. The length of the average workweek pulled off a nine  month high and a gauge of the overall work effort knock down.

Economists pin the slowdown mainly on higher taxes that took hold at the start of the year and $85 billion in federal government spending cuts known as the sequester, that went into effect at the start of March. Economies overseas have also weakened cutting into US export growth.

However the US economy grew at a 2.5 percent annual pace in the first quarter, statistics on construction spending, retail sales and trade suggested it ended the period with less speed.

Apr
16

Gold miners face New Challenge in Sinking Gold Price

A steep slump in the price of precious metal will strike profits at mining companies that are already straining under increasing costs, and could prompt some miners to reorganize their capital spending.

Although lower prices are not possible to wipe out miners profits, they will squeeze cash flows because companies are still feeling the impact of pricey acquisitions made at the height of the commodity cycle.

Yellow metal companies big and small sold off on Monday and Tuesday as the outlook of central bank bullion sales and fears that the US might reduce monetary stimulus tipped spot gold prices off a ledge, to a more than two year low around $1,300 per ounce.

Canada’s Barrick Gold Corp, which was forced to suspend construction on the Chilean side of its massive Pascua Lama gold and silver mine previous week over environmental concerns, fall 10.4 percent to C$20.55 on the Toronto Stock Exchange.

Pawel Rajszel, Veritas Investment Research analyst, who is broadly negative on the sector said that everybody was take pleasure in the high tide, and now that the tide is coming down you are seeing who’s swimming naked and the thing is everybody’s swimming naked.

The largest declines hit small and intermediate companies, which usually have less flexibility to focus exclusively on high quality assets than major producers.

The S&P/TSX Global Gold index ended with decreasing 9.3 percent on Monday following touching its lowest point since late 2008.

However competitor Goldcorp Inc was down a comparatively modest 4.7 percent at C$28.66.

Evolution Mining, which owns five gold and silver mines in Australia, drop 17 percent on Tuesday on the Australian Securities Exchange, as Alacer Gold, with gold mines in Australia and Turkey slipped 10 percent.

But bullion prices appeared to be recovering a small piece of that rout on Tuesday with futures up $16.90, or 1.2%, to $1,377.50 per ounce.

Apr
12

Gold Heads for Third Weekly Fall, Firm Shares Reflect

Precious metal prices were stable on Friday however remained on track for their worst week since late February as strong equities lured investors seeking better returns, as outflows from exchange traded funds underlined the shaky attitude for gold.

CIMB regional economist Song Seng Wun said US equities have continued to defy gravity accumulation that the market had also shrugged off the threat of conflict with North Korea.

Usually, given growing tensions there will be flight to safety and bullion will benefit, however he suppose at this point, as they are mindful of the increased risk, nobody really think that the North Koreans will actually carry through on their threats.

Growing tensions on the Korean peninsula have done little to blend safe haven buying, while yellow metal could regain some of its luster if the newest US earnings season disappoints.

Yellow metal was stable at $1,560.84 per ounce by 0628 GMT, heading for a more than 1 percent turn down this week, its third such fall in a row.

Gold has fall about 7 percent so far this year, following increasing for the previous 12 years, lagging added of more than 11 percent in the S&P 500 index.

US government agency has stated North Korea has a nuclear weapon it can mount on a missile, accumulating an ominous dimension to threats of war by Pyongyang, however the assessment was quickly dismissed by several US officials and South Korea.

Dealer in Singapore, it’s a slim market and a two way business. Mean’s we are seeing both buying and selling today, buying is not extremely high from India. I would say there is not anything strange yet.

Gold future for June delivery fall almost $20 or 1.3%, to 3,561.50 per ounce, on track for a weekly drop of nearly 1%. US gold for June delivery was $1,560.90 per ounce, drop $4.00.

Feb
21

ECB’s Mr. Liikanen chaired Banking Reform Will Move Further On

Member of the European Central Bank’s governing council stated in an interview with Finnish media Wednesday that the European banks will face structural changes despite some resistance to banking alteration.

Bank of Finland Governor Erkki Liikanen said that he believe that measures will be taken to limit proprietary trading.

Mr. Liikanen chaired, a European Commission selected expert group that released a report on banking reform in Europe previous year. The report suggested that European banks be forced to ring fence their trading activities if they have trading assets of more than 100 billion euros or if their trading book is equivalent to 15% to 25% of total assets.

Mr. Liikanen noted there are still some unsettled issues, such as separating market making from other trading activities. However banks are bound to experience some kind of structural change. There seems to be agreement.

According to Mr. Liikanen, what is critical now is to prevent financial crises in the prospect similar to the one practiced recently. The principle in the banking sector should be that banks both gathered profits and suffer losses. Dissimilar so far, when banks have kept their taxpayers and profits have persistent losses.

Williamson stated that the February services PMI dropped to a three month low of 47.3 against a January level of 48.6, as the manufacturing PMI for the region edged down to 47.8 from 47.9. The index readings indicate the region is on course for a fourth consecutive quarter of contraction in the first three months of 2013, although the turn down appears likely to be less severe than the 0.6% plunged in GDP seen in the fourth quarter of 2012. A contraction of 0.2% to 0.3% looks likely.