Browsing all articles tagged with US
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
1

US Miners Union Charts New Course to Save Benefits in Bankruptcy

As mineworkers and retires battle to salvage their allowances and benefits from the bankruptcy of Patriot Coal Corp, lawyers for their union are annoying an unusual gambit and one that may be a test circumstance for workers rights when companies spin off assets.

With a tough road ahead in bankruptcy court in St. Louis, the United Mine Workers of America has brought a similar lawsuit 500 miles away, in West Virginia, the heart of coal country.

That lawsuit is not against Patriot but instead challenges Peabody Energy Corp, which spun Patriot off in 2007 saying the former parent must pay retiree pensions and remunerations if Patriot cannot.

But experts say the lawsuit is a long shot, if successful it could upend how company’s similar Peabody dispose of assets in the future. And, for mineworkers, the lawsuit seeks to preserve a right to lifetime health and pension coverage that dates back to the Truman administration.

The union claims that when Peabody spun Patriot off in 2007, it knew the new company was going to fail. Parting with only almost 16 percent of its assets, Peabody loaded Patriot up with approximately 60 percent of its post-employment benefit liabilities, the union alleges.

Patriot declared bankruptcy in July, and has said it must cut $150 million a year in employment costs to redeem profitability. It is seeking permission this week from a judge in US Bankruptcy Court in St. Louis to impose drastic cuts, which the union has cast as nowhere near fair.

With the odds weighted against workers in bankruptcy court, where their claims are subordinate to the claims of creditors and lenders, the union last drop brought a separate lawsuit against Peabody in federal court in Charleston, West Virginia. The lawsuit also names as a defendant Arch Coal Inc, which in 2005 sold certain units that were ultimately bought by Patriot after its spinoff.

Contacts like Peabody’s, in which it spun off liabilities as well as assets, are not unusual. If the union’s lawsuit is successful, it could set a pattern by allowing workers to keep a company on the hook for the liabilities it tries to offload.

Mar
30

President Barack Obama Touts Infrastructure In Florida Tour Focused on Economy

President Barack Obama walked into the mouth of a huge tunnel in Miami on Friday to emphasizing proposals to enhanced investment in US infrastructure, a move designed to demonstrate a leader still focused on the economy in the midst of broader policy battles in Washington.

in the past, Obama stated that he wanted to develop a national infrastructure bank and capitalize it with $10 billion. The plan is to pull in private sector funding and select projects based on merit.

He would also generate America Fast Forward Bonds that would facilitate local governments and state attract money for infrastructure projects. These would be direct subsidy bonds in which the issuer would obtain a 28 percent subsidy of the borrowing cost as a way of attracting a wider set of investors.

In addition, Obama would add $4 billion to support two programs that are used to provide funding for infrastructure projects like the Miami tunnel.

It is  not clear that how far the proposals will go in Congress. Republicans are unwilling to support what they consider government stimulus spending following a much criticized $787 billion stimulus plan that Obama managed to push through Congress in 2009.

Since his January inauguration and his re-election in November, Obama has steered a policy push focused principally on passing both immigration reform and tightening the control measures.

But, his State of the Union address in February included a sequence of measures to enhanced the economy and the Florida trip fleshed out some of those ideas.

Alan Krueger, Obama’s chief economist stated that the traveling with the president on Air Force One that the three main suggestion outlined by Obama would cost some $21 billion however that cuts would be made elsewhere to avoid rising the deficit.

Obama’s fiscal 2014 budget proposal will be released on April 10, would spell out how they are paid for, all of the proposals need congressional approval.

While Obama will not run for re-election another time, Florida is still significant for him and his fellow Democrats. The political swing state backed the president in 2012 and will be essential to determining whether a Republican recaptures or whether a Democrat holds on to the White House it in 2016.

Mar
27

Gold Hold Additions As Upbeat US Data Offsets Europe Uncertainties

Yellow metal float about $1,600 per ounce on Wednesday, because optimistic US data curbed safe haven demand as uncertainties regarding the euro zone’s fiscal health continued to support prices following Cyprus’s unprecedented rescue scheme.

Orders for lengthy US made commodities surged previous month and home prices posted their greatest year on year added in six and a half years in January, the current signs the US economy resume momentum early in the first quarter.

Merrill Lynch, Bank of America decreased its 2013 prediction for precious metal to $1,670 from $1,680 per ounce, a second cut in estimate this month. The bank was long on palladium and platinum in the medium term, expecting shortage for both metals this year.

Cyprus is expected to complete capital control process on Wednesday to prevent a run on the banks by depositors anxious regarding their savings following the country agreed a painful rescue package with international lenders.

Holdings of SPDR Gold Trust, the world’s greatest precious metal’s backed exchange traded fund, were unchanged at 1,221.260 tonnes for the third session on March 26.

Spot gold had climbed $1.23 to $1,599.82 per ounce by 0010 GMT, following diminishing for three sessions.

US gold increased 0.2 percent to $1,599.10 per ounce.

Strategist Xiao Fu at Deutsche Bank said that although the continued impact regarding the Cyprus bailout and its participation of bank deposits, yellow metal struggled to maintain the positive energy created in the first two weeks of March, now looks very probable to move lower, towards $1,580 per ounce.

Gold futures for April delivery climbed $2.50 to $1598.20 per ounce during the Asian trading hours.

The precious metal had plunged $8.80 or 0.6%, on the Comex division of the New York Mercantile Exchange on Tuesday. Greater than expected statistics on US durable goods orders facilitate grounds to dent the yellow metal’s safe haven appeal and contributing to a third straight session turn down.

Mar
25

Gold Dropped As Cyprus Nears Bailout Arrangement

Gold dropped during the Monday’s trading session, because Cyprus reached a bailout plan with international lenders awaiting approval from euro zone finance ministers, consider on outlook for the safe haven of yellow metal.

The US dollar dropped 0.6 percent verses a basket of currencies on weakening safe haven demand, which gave some support to dollar denominated commodities including precious metal.

EU sources said that the European Union and Cyprus’s president the have decided the outlines of a rescue deal that would observe the formation of a bad bank and good bank and include the closing down of Cyprus’s second greatest lender.

Investors lift their net long positions in US gold by 63 percent to 70,193 contracts in the week to March 19, climbed up from a more than five year low of 39,631 contracts strike in early March.

Spot gold knock down 0.2 percent to $1,605.16 per ounce by 0005 GMT.

US gold was down $1.40 to $1,604.70.

Holdings of SPDR Gold Trust, the world’s largest gold backed exchange traded fund were remains same on the day at 1,221.26 tonnes on March 22, down 11.736 tonnes in the twelfth week of consecutive turn down.

Gold future for April delivery chop down $7.70, or 0.5%, to settle at $1,606.10 per ounce on the Comex division of the New York Mercantile Exchange.

Mar
22

Easy Federal Reserve Softens Fiscal Policy Strike On Economy

According to economists who have been scrambling to raise their growth forecasts, the Fed ‘s aggressive easing of monetary policy is demonstrating unexpectedly effective at blunting the blow to the US economy from tighter fiscal policy.

Economists had feared deep government spending cuts and higher taxes would exploit growth in the first quarter, however a series of strong economic data has so far proven them wrong. And they principally blame the Fed.

Tom Higgins, global macro strategist at Standish Mellon Asset Management in Boston said that the monetary policy is launch to gain some traction here.

According to Higgins, if it were not for the monetary incentive the economy would perhaps facing growth of a 1 percent annual rate or less, he anticipate growth to come in at a 2.5 percent pace in the first quarter.

The US central bank has held overnight interest rates near zero since December 2008 and has pushed around $2.5 trillion into the economy by acquiring mortgage-backed bonds and Treasury debt in a bid to promote faster growth and decreasing unemployment.

On Wednesday, it recommitted to plans to buy $85 billion worth of bonds each month and stated it would keep buying assets until it sees a considerable improvement in the labor market.

These activities have assist to put the economy in better shape to compact with the end of a 2 percent payroll tax cut, higher tax rates for rich Americans and $85 billion in across-the-board government spending cuts which is known as the sequester.

The easy money position has given a increase to interest rate sensitive sectors of the economy, such as housing and autos.

The vowed to easy policy also emerges to be lifting business confidence, which in turn is underpinning stock market and the job growth. Non-farm payrolls augmented 236,000 in February and the jobless rate knock down to a four-year low of 7.7 percent.

Mar
22

Gold Headed For Greatest Weekly Climb In 4 Months On Cyprus

Yellow metal traded near a 4 week high on Friday, underpinned by safe haven demand on the fear of a possible financial meltdown in Cyprus. The crisis has placed gold on track to phase its largest weekly climb in four months.

Holdings of SPDR Gold Trust, the world’s greatest  precious metal’s backed exchange traded fund, knock down 0.902 tonnes from the last session to 1,221.26 tonnes on March 21, the weakest since July 2011, the fund is started for a twelfth week of outflows.

Concerns regarding Cyprus’s finances resurged, as the European Union gave the country till Monday to lift the billions of euros it wants to settle an international bailout or face the collapse of its financial system and possible exit from the euro zone.

Officials in Cyprus delayed until Friday a discuss on emergency legislation listed by the government to meet the island’s financial crisis, saying they required further time for consultations.

In US a series of data on Thursday on the labor market, home sales and factory activity pointed to a rising energy in the US economy in the first quarter.

The US House of Representatives reduced the threat of a government shutdown coming week, approving on Thursday a stop gap funding bill that eases follower tensions following months of bitter fights over budgets.

Spot gold was traded on little changed rate at $1,614.74 per ounce by 0008 GMT, following increasing to a 4 week high of $1,616.36 during the previous trading session. Gold was headed for a weekly addition of about 1.5 percent in its third weekly climb, its greatest weekly climb in four months.

US gold were traded nearly flat rate at $1,614.20 per ounce.

The new governor of the Bank of Japan stated the central bank is ready to use all resources accessible including buying longer term assets, to attain its 2 percent inflation target.

Gold future for April delivery knock down $1.10 to $1,612.80 per ounce during the Asia trading session.

Mar
21

Gold Continue Additions As Fed Sticks With Stimulus

Precious metal traded little changed rate on Thursday, following shattering four days of addition in the previous session as the Federal Reserve’s vowed to stick with its bond buying programme offset doubts regarding a debt crisis in Cyprus.

Taking the steam out of yellow metal’s current rally, investors are showing some hopefulness the problems in Cyprus might not extended further in the euro zone.

The Federal Reserve on Wednesday pressed forward with its aggressive policy incentive despite developments in the US economy, pointing to still lofty unemployment, fiscal headwinds out of Washington and risks from overseas.

Cyprus extended a bank lockdown to coming week and measured nationalizing pension funds on Wednesday, rushed turn away a financial meltdown following rejecting the terms of a bailout from the European Union and rotating to Russia for a lifeline.

The right-wing Swiss People’s Party known as SVP has collected sufficient signatures to force a referendum on a suggestion to ban the country’s central bank from selling any of its bullion reserves.

Holdings of SPDR Gold Trust, the world’s largest gold backed exchange traded fund remain same from a day earlier at 1,222.162 tonnes.

Spot gold was traded on little changed rate at $1,605 per ounce by 0042 GMT, off a three week high of $1,615.16 per ounce hit earlier this week. US gold slumped down 0.2 percent to $1,604.40 per ounce.

Gold futures for April delivery dropped more on Wednesday in electronic trading. April gold was at $1,606.40 per ounce in electronic on Globex, compared with its $1,607.50 per ounce settlement on the Comex division of the New York Mercantile Exchange.

Mar
20

Cyprus Bank vote Lift an Additional Uncertainty Regarding Euro Membership

The Cypriot parliament’s refusal of a bailout application has missing plans to shore up the country’s banking sector in disorder and opened the door a bit wider to the likelihood of its exit from the currency bloc.

Yet, markets emerged to be taking the dismissal of the 10 billion euro which is equal to $13 billion bailout plan which had at its center a contentious deposit tax, in their stride at current US stocks had typically ended slightly lower on Tuesday, and Asian stocks were split between losses and gains Wednesday.

One cause for the current comparatively optimistic market reaction, is that there is still time for officials to present an additional palatable contract to the Cypriot parliament, prior to bank branches revive on Thursday following an extended holiday.

Vassili Serebriakov, currency strategist at BNP Paribas said that they do not believe that the shift by the Cypriot parliament should be seen as the final, no vote to the bailout, banks in Cyprus are closed until Thursday and they look forward to a new deal to surface over the next 24 hours.

Serebriakov said that the particulars of a new tender stay highly doubtful at this point, while it appears that bank deposits under €100,000 i.e. those sheltered by deposit insurance will possibly not be part of the contribution to the bailout.

That plan would signify a change from the original tender announced on Saturday, when Cyprus and its institutional lenders stated that the country would obtain €10 billion of aid subject to certain conditions together with a €5.8 billion deposit levy.

Although taxing all depositors may be a step too far, analysts pointed to definite factors that set the Cypriot banking sector distant from the rest of Europe and made a conventional bank bailout further difficult.

Those include an overinflated banking system with liabilities and assets valued about 800% of GDP and a public debt of more than 85% of Gross Domestic Product by the end of 2012.

Mar
19

Precious Gold Float Above $1,600, Euro Zone Cyprus Bank Concerns

Precious gold float above $1,600 per ounce during the Tuesday trading session, because of anxiety about Cyprus forthcoming vote on a levy on bank deposits hold up safe haven interest in yellow metal, as outflows from exchange traded bullion funds kept growth in check.

Euro zone ministers recommend Cyprus to let minor savers run off a levy on bank deposits, prior to a parliamentary vote on Tuesday that will either threaten default or secure the island’s financial rescue.

Value for US Treasuries an additional safe haven climbed on Monday, captivating standard yields to their weakest in almost two weeks as the euro zone plan to snatch money from Cypriot bank deposits upset investors.

Holdings of SPDR Gold Trust, the world’s greatest  yellow metal’s backed exchange traded fund, plunged 13.542 tonnes on Monday, the highest one day turn down in nearly a month to 1,219.454 tonnes, the weakest since July, 2011.

Spot gold climbed up 0.1 percent to $1,605.20 per ounce by 0024 GMT, close to a 3 week high of $1,610.81 per ounce strike in the last session.

US gold was traded on a flat rate at $1,604.50 per ounce.

Analysts at HSBC on Monday kept their bullish outlook on precious metal however still cut their price predictions on the gold for this year and next.

They anticipate prices to be supported by current accommodative monetary policies, with geopolitical worries and growing currency wars probably provide an further lift. However they reduced their yellow metal price predictions in light of the weak prices seen earlier this year. HSBC worsen its 2013 average metal price estimate to $1,700 from $1,760 and the 2014 estimate to $1,720 from $1,775 per ounce.

Gold future for April delivery augmented $12 or 0.8%, to reconcile at $1,604.60 per ounce on the Comex division of the New York Mercantile Exchange.