Browsing all articles tagged with metals
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.

Apr
22

Precious Gold Ralled More Than 2 Percent on Technical Buying

Precious metal jumped more than 2 percent on Monday following a rebound over $1,400 ignited technical buying, however sentiment was wobbly as steady outflows from exchange traded funds trimmed their gold holdings to the lowest in three years.

Edward Meir, metals analyst at futures brokerage INTL FCStone said that it remains to be seen which of these offsetting forces ultimately wins out and exerts its influence over yellow metal prices.

The technical stance for gold, which has sink more than 15 percent so far this year, is yet to recover although the safe haven asset could find support from a rush in physical buying in Asia and other parts of the world.

Our guess is that the sharp bounce in retail buying will probably dominate and succeed in sending prices higher over the course of the coming week or two.

It posted its largest ever daily loss in US dollar terms previous Monday, shocking veteran investors who see bullion as portfolio protection against inflation and other market risks. Prices sank to almost $1,321 on April 16, its weakest in more than 2 years.

Spot gold added $16.21 per ounce to $1,420.06 by 0631 GMT following increasing as high as $1,427.20 per ounce.

Tim Riddell, head of ANZ Global Markets Research, Asia  said that the aggressiveness of the drop suggests that we are still in a consolidation rather in a reversal role. For me the $1,435 level is likely to provide resistance.

We actually need to get back into the $1,500s to say that there’s something more substantial taking place. The close over $1,400 may have taken the negative pressure out of percious metal in the near term. A close below that level will heighten the risks of new lows

Outflows on exchange traded funds could also point out that investors were parking their money somewhere else, although previous week’s trading statistics from the Unites States demonstrate that funds had injected new money into gold futures.

Gold had rallied to an 11-month high in October previous year following the Fed announced its third round of aggressive economic stimulus, lifting fears the central bank’s money printing to buy assets would stoke inflation.

Hedge funds and money managers elevated their net longs in gold futures and options in the week to April 16, a report by Commodity Futures Trading Commission known as CFTC showed on Friday, because new money entered the market at lower prices.

 

US gold futures, which frequently dictate the spot market, strike a high of 1,427.3 per ounce climbed 2.3 percent from the previous close of 1,395.60 per ounce. The June delivery later stood at $1,419.80 added $24.20.