Gold, silver pull back as euro retreats

LONDON (MarketWatch) — Gold futures fell Monday as the euro retreated on fears of rising energy costs and finance ministers from the Group of 20 nations over the weekend demanded the currency bloc to boost its firewall to contain its debt crisis. 

Gold for April delivery GCJ2 -0.29%  lost $8.70, or 0.5%, to 1,767.70 an ounce, extending losses from Friday. On Thursday last week, gold settled at its highest level since Nov. 11, supported by a lower U.S. dollar. 

Silver for March delivery SIH2 -0.08%  shed 21 cents, or 0.6%, to $35.13 an ounce.

Metal prices were weighed down by a decline in the euro as investors were concerned that recent rallies in oil prices could hurt global growth. Oil futures for April delivery CLJ2 -0.90%   reached last week the highest level since May on geopolitical concerns, but were Monday 1.1% lower at $108.55 a barrel. 

The euro decline gave way to a stronger dollar and the ICE dollar index DXY +0.25%  which measures the greenback against a basket of six other currencies, added 0.2% to 78.546. Commodities traded in the U.S. currency tend to fall on the back of a stronger dollar. 

The euro was further pushed lower after the G-20 over the weekend said it would back increased funding for the IMF only after the euro-zone provides a boost to the firepower of its rescue fund. 

High grade copper for March delivery HGH2 -0.63%  was off 0.6% at $3.82 a pound.

 

Source; http://www.marketwatch.com/story/gold-silver-pull-back-as-euro-retreats-2012-02-27

Comex Gold Weaker On Profit Taking, Bearish "Outside Markets"

(Kitco News) - Comex April gold futures prices are trading modestly lower in early U.S. dealings Monday, on a corrective, profit-taking pullback from recent solid gains that pushed prices to a three-month high last week. The key “outside markets” are in a bearish daily posture for the precious metals early Monday, as the U.S. dollar index is firmer and crude oil prices are lower. April gold last traded down $9.00 at $1,767.40 an ounce. Spot gold was last quoted down $7.60 an ounce at $1,766.50.  March Comex silver last traded down $0.223 at $35.115 an ounce.

The Mid-East tensions did not escalate over the weekend, which allowed the European Union sovereign debt crisis to creep back to share the front burner early this week. Moody’s early Monday issued a report saying a default by Greece on its sovereign debt is still very possible. Also, the Group of 20 nations issued a statement over the weekend saying the group is hesitant to keep offering bailouts to debt-strapped EU countries. This put the European stock markets under modest pressure, which in turn pressured the Euro currency.

However, losses in gold Monday are limited by the present stare-down between allies Israel and the U.S, and Iran. Increasing focus in the media on the potential for Israel or U.S. military action against Iran has prompted increase investor anxiety in the market place. That’s bullish for safe-haven gold, and to a lesser degree bullish for silver. The tensions between Israel and the West, and Iran, are and likely will remain a major bullish fundamental factor for the gold market.

The U.S. dollar index is firmer Monday morning on a short-covering bounce from recent selling pressure. This is a bit of a bearish weight on gold and silver Monday. The greenback bears still have some downside technical momentum on their side. Meantime, Nymex crude oil futures prices are seeing a corrective pullback after hitting a 9.5-month high last week. The recent rally in crude oil prices is a major bullish factor for the precious metals. 

U.S. economic data due for release Monday includes pending home sales index and the Texas manufacturing survey.

The London A.M. gold fixing was $1,765.00 versus the previous London P.M. fixing of $1,777.50. 

Technically, April gold futures bulls still have some upside near-term technical momentum. Don’t be surprised to see some bargain hunters step in soon to buy the dip in prices. Gold bulls still have the solid overall near-term technical advantage. Bulls' next upside technical breakout objective is to produce a close above solid technical resistance at the November high of $1,808.00. Bears' next near-term downside price objective is closing prices below solid technical support at the February low of $1,706.70. First resistance is seen at the overnight high of $1,779.80 and then at last week’s high of $1,789.50. First support is seen at the overnight low of $1,762.60 and then at $1,750.00. 

March silver futures bulls still have the overall near-term technical advantage and still have some upside technical momentum. Prices are in a two-month-old uptrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $37.50 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the February low of $32.64. First resistance is seen at last week’s high of $35.72 and then at $36.00. Next support is seen at $35.00 and then at $34.52.

Source; http://www.kitco.com/reports/KitcoNews20120227JW_am.html

Gold Prices Expected To Rise Next Week; $1,800/Oz Possible Target – Survey Participants

Most participants in the weekly Kitco News Gold Survey are expecting gold prices to rise next week, with $1,800 an ounce a possible upside target.

In the Kitco News Gold Survey, out of 32 participants, 24 responded this week. Of those 24 participants, 19 see prices up, while three see prices down, and two are neutral on prices. Market participants include bullion dealers, investment banks, futures traders, money managers and technical chart analysts.

Many of the survey participants cite the heightened saber-rattling between Iran and the Western nations as their reason to see gold prices rise. 

“Increasing tensions with Iran could send both oil and gold much higher and copper lower. Given present trends, $135 per barrel Brent crude is compatible with $120 per barrel WTI (West Texas Intermediate) crude, $2,000+ per ounce gold and $40+ per ounce silver,” said Richard Baker, editor of the Eureka Miner. 

Others suggested technical chart reasons, that the recent upward momentum will continue to lift gold.

Those who see weaker or are neutral both said that gold might struggle in its attempt to recapture the $1,800 level which tempers their outlook. 

Those who look for prices to pull back do not expect a sharp break, but more of a correction in values. “The gold market has steadily been going up without there being a correction… and the lack of physical flow will probably send gold down; it will be a good opportunity for the market hunters to buy gold before it goes up again,” said Afshin Nabavi, head of trading at trading house MKS Finance.

Finally, many survey participants said if the tough talk between Iran and the West starts to cool, gold will inevitably retrace this current rally.

Source; http://www.kitco.com/kgs/goldsurvey_february24.2012.html

Higher Gold Prices Seen For Next Week As Iran Tensions Lend Support

(Kitco News) - Higher gold prices are possible next week as tensions with Iran continue to escalate, market watchers said.

Prices were lower on Friday, but up on the week. The most-active April gold contract on the Comex division of the New York Mercantile Exchange settled at $1,776.40 an ounce, up 2.9% on the week. March silver settled at $35.338 an ounce, up 6.4% on the week.

In the Kitco News Gold Survey, out of 32 participants, 24 responded this week. Of those 24 participants, 19 see prices up, while three see prices down, and two are neutral on prices. Market participants include bullion dealers, investment banks, futures traders, money managers and technical chart analysts.

Gold and crude oil prices rose this week, supported by concerns that heightened tensions between the West and Iran may get out of hand, although profit taking ahead of the weekend weighed on gold. On Friday, Iran’s United Nations’ ambassador said Iran wants to talk further with the International Atomic Energy Agency, although a Western counterpart called negotiations this week regarding the country’s nuclear activities, “very long and fruitless,” according to Reuters.

All of this is supportive for gold prices, and it may prompt people to buy the yellow metal as an inflation hedge as worries that the current high oil prices will last into the summer, said Bart Melek, vice president and director, head of commodity strategy, rates and foreign exchange research and TD Securities.

“The risk of war, the western world sanctions on Iran and the Iranian sanctions on their European consumers will very likely propel oil higher, which is also a good story for gold,” Melek said.

Ralph Preston, senior market analyst at Heritage West Financial, said he’s watching the situation with Iran, along with everyone else. The EU and U.S. have embargoes on Iranian oil, but still other countries are buying from Iran. Paradoxically, the higher oil prices might be offsetting the ban, limiting the pain Tehran may be feeling.

But Preston said a real test might come if the Belgium-based SWIFT actually blocks Iranian banks from using its network to send money. On Feb. 17, Reuters reported that the Society for Worldwide Interbank Financial Telecommunication, which allows banks to move money globally, said that it’s ready to keep Iranian banks from using its system, reacting to international pressure. SWIFT has never blocked a country before. “That could really be the key,” Preston said.

Arnett Waters, chairman of A.L. Waters Capital, said in addition to the Iranian situation, several factors are lifting gold: bullish technical chart factors, higher momentum and expectations for further quantitative easing as Europe’s economy continues to falter and China’s economy slows. Crude oil will be a factor, too. “We expect to see gold, to some extent, follow oil’s direction in the coming weeks,” he said.

Looking at technical charts, Preston said the April gold futures contract is showing a wide “reverse head-and-shoulders” pattern on daily technical charts could be a bullish sign. He points to the Dec. 2 high of $1,769.70 for the left shoulder, the Dec. 29 low of $1,526.20 for the head and the Feb. 3 high of $1,765.90 as the right shoulder.

“I’m really not on board with the rally unless we close above the $1,808-$1,810 area. If that happens, we can be on a path to challenge the highs around $1,925,” Preston said, noting that the $1,808-$1,810 area represents a zone of resistance for gold.

Support is around $1,750. “If we pull back and hold that level, it will confirm that the market wants to run higher,” Preston said.

A close under $1,740 would have him reconsider the recent strength in gold, he added.

SOME LIMITS TO GOLD’S RISE

James Steel analyst, HSBC Securities, said gold has a generally bullish background, but he warns of two situations to mind. “We suggest two factors that may curb – but not reverse – the rally. Higher prices may dissuade emerging-market nations from purchasing jewelry and may also stimulate the scrap market. This combination could free up substantial amounts of bullion that would have to be absorbed by the investment market, if prices did not fall,” he said.

Edel Tully, UBS analyst said that scrap sales have risen by a marginal degree, but she is not concerned about the supply factor. Instead, she and other market watchers point out that the recent rally in gold has not come from the physical side. While she believes gold prices at $1,800 are justified, she is “hesitant” with her enthusiasm regarding this recent rally because it seems one-sided.

SILVER

Silver rose strongly this week and outperformed gold. Support for silver and for the platinum group metals, comes in part to hopes of the U.S. economy can stay on its moderate growth path.

Tully said the recent gains in silver have helped the gold:silver ratio to budge under the 51 area, to 50.41 as of Thursday, the lowest since early November. She said the stout rally silver had on Thursday was in part because the metal rose above its 200-day moving average, triggering resting buy orders.

“Interestingly, while our client flows were generally dominated by sellers, the market barely flinched and prices continued its climb higher. Such resilience could suggest that investors are starting to return to the market. With positive sentiment in gold continuing to grow, it would not be a surprise if some of that optimism is spilling over into silver. But we think it’s too early to make that conclusion just yet,” she said.

Barclays Capital technical analysts are also positive on silver, looking for it to move to the $35.70 area next week, with the gold:silver ratio falling to the 49.40 area.

Yet some analysts are tempering their short-term outlook for silver, noting that the rise in crude oil prices could limit the gains in the industrial precious metals.

“While rising oil prices and geopolitical risk may help support gold, the implications of rising oil prices on U.S. economic activity is worth watching closely for the silver and PGM outlook since silver is sensitive to trends in U.S. manufacturing sector activity and car sales affects PGM demand,” said Michael Lewis, analyst at Deutsche Bank.

Source; http://www.kitco.com/reports/KitcoNews20120224DeC_outlook.html

Gold Price Steady, U.S. Jobless Claims Hit 4-Year Low

GOLD PRICE NEWS – The gold price held steady near $1,780 per ounce Thursday morning despite better than expected data on the state of the U.S. labor market.  The price of gold climbed to $1,787 prior to the release of weekly jobless claims, but relinquished its gains after they came in at a four-year low of 351,000.  In doing so, jobless claims beat the 355,000 consensus estimate among economists and fell to their lowest level since March 2008.  Notwithstanding the encouraging report, European equity markets remained modestly lower and S&P 500 futures dipped 0.1% to 1,354.50.

On Wednesday the gold price rose $19.66, or 1.1%, to $1,779.46 per ounce as precious metals reversed course following earlier losses.  The price of gold hovered near $1,755 in morning trading, but turned sharply higher amid heavy volume on the COMEX.  Gold futures later reached $1,783.40 in electronic trading, their highest level in over three months.

Silver bounced back alongside the gold price yesterday, climbing from an intra-day low of $33.82 to as high as $34.60 per ounce.  In doing so, silver stretched its year-to-date gain to 24.4%.  For comparison purposes, the price of gold has posted a very respectable – but far less – 13.8% return this year.

Gold shares were propelled higher by the gold price as well on Wednesday, as the Market Vectors Gold Miners ETF (GDX) added $1.01, or 1.8%, to $56.83 per share.  With its advance, the GDX extended its gain in 2012 to 10.5%.  Notable gold miners moving higher included Eldorado Gold (EGO), Goldcorp (GG), and IAMGOLD (IAG).  EGO finished up by 2.6% at $14.77, GG by 1.5% at $49.20, and IAG by 3.1% at $17.36 per share.

The gold price displayed a considerable amount of resiliency yesterday in the face of a stronger U.S. dollar.  While the yellow metal has displayed a strong negative correlation to the greenback in recent months, on Wednesday each asset class served as a safe haven amid modest weakness in the broader financial markets.  The Dow Jones Industrial Average and S&P 500 Index each snapped three-session winning streaks by falling 0.2% and 0.3%, respectively.

Concerns over the effectiveness over the latest round of Greek bailout funds drove investors into the gold price and U.S. dollar.  In a note to clients, analysts at HSBC stated that “Even assuming the new Greek programme proceeds as planned, the Greek government crisis is far from over.  This deal will help creditors to be repaid, as the funds will be channelled into an escrow account to ensure that lenders are prioritized, but it will not revive economic growth any time soon.”

HSBC went on to say that “With the Greek economy now in its fifth year of recession and already having contracted in the fourth quarter by 7% year-on-year, even the revised debt sustainability analysis looks optimistic.”

Another factor underpinning the gold price rally was bullish commentary from Goldman Sachs.  In a report published on Wednesday, the firm reiterated his $1,940 target by the end of the year.  Analysts led by Jeff Currie wrote that “We expect US real interest rates to remain lower for longer given our US economics team’s expectation for US economic growth to remain slow through 2012.  Consequently, we expect gold prices to continue to rise through 2012, reaching $1,940 an ounce in 12 months, and we continue to recommend a long gold position.”

Source; http://www.goldalert.com/2012/02/gold-price-steady-u-s-jobless-claims-hit-4-year-low/

Gold futures edge higher as dollar pulls back

Lingering worries about Greece, easy monetary policy lend support

 SAN FRANCISCO (MarketWatch) — Gold futures rose Thursday, boosted by a weaker dollar and expectations that central banks will maintain loose monetary policies for some time to come. 

Gold for April delivery GCJ2 +0.53%  advanced $4.90, or 0.3%, to $1,776.40 an ounce on the Comex division of the New York Mercantile Exchange. A day earlier, the metal settled at $1,771.30 an ounce, the highest since mid-November. 

Bargain hunters stepped in to buy gold durinh the prior session as the metal eased following disappointment over Chinese data and fading optimism about Greece’s bailout deal. 

Wednesday’s move higher for gold “was a reminder, if markets needed it, that central banks are set to remain in accommodative mode for some time to come,” said Michael Hewson, senior market analyst with CMC Markets. 

He said the dovish tone from the Bank of England on Wednesday, last week’s stimulus from the Bank of Japan and a new long-term refinancing operation from the European Central Bank next week will increase money supply and underpin gold prices “for some time to come against most [Group of 10] currencies.

Upside targets: $1,800, then $2,000

“The key level on the upside lies at the November highs at $1,801 and if we can push above here, then the record highs last year will come back into view, with the likelihood we could well see levels above $2,000 an ounce within the next 12 months,” said Hewson, in e-mailed comments. 

 

With Fitch Ratings earlier this week lowering Greece’s credit rating, ratings agencies are debating whether to take the same step of further downgrading Greece and rate it as a “selective default,” analysts at Commerzbank said in a note to clients. 

Greek lawmakers also need to “swiftly rubber-stamp” reform measures, while at the same time it isn’t clear how many private bondholders will agree to the country’s agreed haircut, they added. 

“The sovereign-debt crisis is thus likely to keep the market on tenterhooks for some time yet, which should benefit gold,” the analysts said. 

Gold futures also got a boost as the dollar fell versus most major rivals. 

A weaker dollar is beneficial for gold and other dollar-denominated commodities as it makes them cheaper to holders of other currencies. The dollar index DXY -0.29% , which compares the U.S. unit to a basket of six currencies, fell to 78.083 from 79.207 on Wednesday. 

The euro EURUSD +0.42%  gained against the greenback after the Ifo Institute’s gauge of German business confidence rose more than forecast for February, and the shared currency earlier broke through resistance at $1.33 to trade above $1.3340, its highest against the dollar since mid-December.  

Among other metals, copper for March delivery HGH2 -1.28%  lost 5 cents, or 1.3%, to $3.78 a pound. 

Silver tracked gold higher, with March silver SIH2 +2.03%  advancing 44 cents, or 1.3%, to 34.70 an ounce. 

Platinum and palladium diverged, with platinum moderating steep recent gains on the back of a labor strike called at a top mine in South Africa. 

Platinum for April delivery PLJ2 +0.39%  rose $1.80, or 0.1%, to $1,722.70 an ounce. March palladium PAH2 +0.08%  declined 30 cents to $717.45 an ounce. 

Wednesday saw platinum’s first settlement above $1,700 since late September. For palladium, a settlement of $717.75 an ounce was its highest in five months. 

Source; http://www.marketwatch.com/story/gold-edges-higher-as-dollar-pulls-back-2012-02-23

Comex Gold Higher on Safe-Haven Demand, Fresh Technical Buying

(Kitco News) -Comex April gold futures prices are trading modestly higher and hovering near a three-month high in early U.S. dealings Thursday. The precious yellow metal is boosted by fresh safe-haven investment demand and on fresh upside near-term technical momentum gained by the bulls this week. The key “outside markets” are also in a mildly bullish daily posture for the precious metals so far Thursday, as the U.S. dollar index is lower and crude oil prices are steady to firmer. April gold last traded up $5.70 at $1,777.10 an ounce. Spot gold was last quoted down $0.10 an ounce at $1,776.25.  March Comex silver last traded up $0.291 at $34.55 an ounce.

The gold market is seeing fresh support from the present stare-down between allies Israel and the U.S, and Iran. The recent news Iran has halted oil shipments to some European countries, to pre-empt an EU ban on Iranian oil imports, has been met with increasing focus in the media on the potential for Israel or U.S. military action against Iran. The rising tensions between Israel and the West, and Iran, are and likely will remain a major bullish fundamental factor for the safe-haven gold market.

The Mid-East tensions have pushed the European Union sovereign debt crisis to the back burner this week. Strong German Ifo survey results Thursday have lifted the Euro currency. However, the German data was muted by news the European Commission expects EU, as a whole, to slip back into economic recession this year.

The U.S. dollar index is lower Thursday morning, which is a positive for the precious metals. Trading in the dollar index has turned choppy and trendless just recently. Meantime, Nymex crude oil futures prices are trading slightly higher after hitting a 9.5-month high on Wednesday. The recent rally in crude oil prices is also a major bullish factor for the precious metals. Crude oil and the U.S. dollar index will remain the two key “outside markets” that will generally have at least some daily influence on gold and silver price moves.

U.S. economic data due for release Thursday include the weekly jobless claims report and the weekly DOE energy stocks report. There is also an IMF press briefing.

The London A.M. gold fixing was $1,776.50 versus the previous London P.M. fixing of $1,752.00. 

Technically, April gold futures prices Wednesday hit a fresh three-month high. Price action Wednesday saw the market move above what was stiff overhead technical resistance at the February high, which has given the bulls still more upside near-term technical momentum. Gold bulls have the solid overall near-term technical advantage. Bulls' next upside technical breakout objective is to produce a close above psychological resistance at $1,800.00. Bears' next near-term downside price objective is closing prices below solid technical support at the February low of $1,706.70. First resistance is seen at Wednesday’s high of $1,783.40 and then at $1,800.00. First support is seen at $1,765.90 and then at Wednesday’s low of $1,750.70. 

March silver futures hit a fresh three-month high overnight. Silver bulls have the overall near-term technical advantage and gained fresh upside momentum Thursday. Prices are in a seven-week-old uptrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above psychological resistance at $35.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the February low of $32.64. First resistance is seen at the overnight high of $34.75 and then at $35.00. Next support is seen at the overnight low of $34.23 and then at $34.00.

Source; http://www.kitco.com/reports/KitcoNews20120223JW_AM.html

Higher Gold Prices Expected Next Week Say Survey Participants

 

A sizable majority of participants in the Kitco News Gold Survey expect higher prices next week for the metal, in one of the more lopsided surveys recently.

In the Kitco News Gold Survey, out of 32 participants, 23 responded this week. Of those 23 participants, 16 see prices up, while three see prices down, and four are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Those who see higher prices gave several reasons: gold holding support at $1,700 an ounce, open interest building in the Comex gold futures and continued loose monetary policy. Several also expressed optimism that Monday’s meeting of the Eurogroup finance ministers will come to some agreement to help bail out Greece prior to when the country must make a big bond payment or risk a default.

Mike Zarembski, senior commodity analyst at optionsXpress, cited a technical-chart reason. “Gold prices continue to remain above the downtrend line drawn from the September 2011 highs. We may be seeing a ‘bull flag’ forming in the daily futures charts which, if verified, would further confirm the up-move seen in 2012,” he said.

Survey participants also point out that gold is behaving like a risk asset, so if other risky assets like equities rise, gold will follow. 

That, however, leaves gold at the mercy of headline news. Those who see gold prices weaker said they did not expect positive news out of the Greek situation, which would be bearish for gold. 

Those who are neutral on prices said gold has stayed within its recent range of about $1,705 to $1,750 and it may continue to do so without a new catalyst to push it out of the range.

Source; http://www.kitco.com/kgs/goldsurvey_february17.2012.html

Survey Participants Expect Gold Prices To Rise Next Week, But Stay In Range

Most participants in the Kitco News Gold Survey expect gold prices to rise next week, but stay roughly in the current price range.

In the Kitco News Gold Survey, out of 32 participants, 24 responded this week. Of those 24 participants, 13 see prices up, while seven see prices down, and four are neutral on prices. Market participants include bullion dealers, investment banks, futures traders, money managers and technical chart analysts.

Overall there are more participants bullish on prices than bearish or neutral; however, there are nearly as many in the combined bearish/neutral column as the bullish column.

Those who see prices higher said momentum is continuing to carry gold prices up, along with underlying accommodative monetary policy. 

Afshin Nabavi, head of trading at trading house MKS Finance, said gold prices should continue to rise, although stay in a range. “There is good bargain hunting as gold dips below $1,710 area,” he said.

Views on the how eurozone sovereign debt issue will affect gold are mixed across the board, which underlies how tricky that situation is to understand and price into the market. There are differing views on whether the completion of the Greek debt deal with the private sector is bullish or bearish for gold. Some see the deal as bullish for gold as it adds stability and could mean a turning point that the eurozone may finally be grappling with the situation. Others have said it’s bearish because it lessens the need for gold as a safe-haven. 

Further, there are differing views on whether next week’s meeting of European Union officials will support or weaken gold prices. EU officials have just requested more austerity from the Greeks and there is concern this last-minute request will hamper the country from getting its much-needed loan in mid-March.  

Those who are bearish said they think the market is ripe for a pullback, particularly as it hasn’t had much of a correction since the start of this year. Others point to some technical chart developments that suggest gold is due for a retracement.

Frank Lesh, analyst FuturePath Trading, said gold is not acting like a safe haven. “Markets change and evolve and right now gold is trading more like a currency than the safe haven it once was. It’s correlation with the dollar (negative) and euro (positive) is very strong. It is also trading as a risk asset as well and this is evident as it rises and falls with equity markets now.  Gold is correcting the rally from the 1520’s to the 1760’s. I expect more consolidative trade with a downside bias,” he said.

The few participants who are neutral offer similar reasoning as those who are bearish – that the market has rallied sharply in a short amount of time. That is more a reason to be on the sidelines as the overall fundamentals remain sound.

Generally, most participants overall see gold in a rough range of $1,700 to $1,750 an ounce.

Source; http://www.kitco.com/kgs/goldsurvey_february10.2012.html

Greece Debt Woes Hammer Gold Prices

NEW YORK (TheStreet ) -- Gold prices were hammered Friday as Greece was unable to secure its second bailout, violence erupted in Athens and as China imports slowed in January. 

Gold for April delivery shed $15.90 at $1,724.10 an ounce at the Comex division of the New York Mercantile Exchange. Gold managed to close off of its session lows. The gold price has traded as high as $1,737.20 and as low as $1,706.40 an ounce while the spot price was down $10, according to Kitco's gold index. 

Silver prices lost 31 cents at $33.60 an ounce while the U.S. dollar index was up 0.62% at $79.13. 

The bad news mounted for gold Friday. Leading the charge was a weaker euro and stronger dollar as uncertainty swirled around Greece's ability to commit to its debt deal. This weekend is shaping up to be D-day for the country. Its parliament must pass austerity measures, agreed upon by leadership, in order to secure its second bailout. European leaders need to see the government approve these measures before they will give the green light for the second 130 billion euro bailout, which Greece needs by March 20th when it has 14.5 billion euros of debt maturing.  

Source; http://www.thestreet.com/story/11412189/1/greece-debt-woes-hammer-gold-prices.html

European Woes To Dominate Gold Next Week

(Kitco News) - Precious metals prices will be dominated by events out of Europe next week, particularly after a monkey wrench was thrown into a deal to get Greece its next tranche of aid.

Prices fell on Friday and were lower on the week. The most-active April gold contract on the Comex division of the New York Mercantile Exchange settled at $1,725.30 an ounce, down 0.86% on the week. March silver settled at $33.604 an ounce, down 0.43% on the week.

In the Kitco News Gold Survey, out of 32 participants, 24 responded this week. Of those 24 participants, 13 see prices up, while seven see prices down, and four are neutral on prices. Market participants include bullion dealers, investment banks, futures traders, money managers and technical chart analysts.

Precious metals, along with most other markets, were caught in a “Greece fire” on Friday as a deal struck to get the country its second bailout appears to have been scuttled by last minute demands from European leaders.

Greece was set to receive its 130 billion euro ($170 billion) aid tranche when eurozone finance ministers said they wanted the Greek parliament to impose a package of cuts and reforms agreed with the EU and the IMF. Also Athens must find a further 325 million Euros in budget cuts by Wednesday, when the eurozone finance ministers meet again.

Greece has a bond payment due March 20 and needs its next aid supplement in order to pay bond holders. The new demands pushed financial market prices down across the board, market watchers said. 

“Greece cannot service its huge debt, and there are real fears that a default could endanger Europe's financial stability and even lead to a break-up of the eurozone,” said R.J. O’Brien. 

What’s ironic is that many European finance ministers are concerned this new overall plan won’t put Greece on a sustainable growth path, the firm said.

“This latest demand could be the lighting of the fuse that eventually sets off the default ‘bombshell’ that everyone is supposed to be trying to avoid. But there is now more and more talk on the margins in both Brussels and Athens that a Greek default would not be a disaster,” the firm said.

R.J. O’Brien said default is not necessarily what is causing international lenders sleepless nights. Rather, it’s a possible Greek exit of the eurozone. “If that happens then all Greeks - not just the government - will either default on their debts, or - if it is legally feasible - will convert their debts into new drachmas that are likely to lose over half their value against the euro,” they said.

Brown Brothers Harriman analysts said this latest move is fraught with peril. “Eurozone officials are playing a dangerous game, as opposition to austerity in Greece is surely intensifying, as evidenced by the resignation of the Deputy Labor Minister yesterday and by another socialist MP today.  The poor Greek economic backdrop only makes it tougher to stick with austerity to meet fiscal targets,” BBH said. 

George Gero, vice president with RBC Capital Markets Global Futures, and precious metals strategist, said there are concerns that the continued problems in Europe might push mid-sized and smaller banks to raise cash by selling gold. That’s bearish because it puts more gold supply on the market. 

The lack of a plan for Greece also delays any recovery in that region, which could ultimately weigh on the global economy, he said. “The relationships of gold, euro, crude and base metals like copper are beholden to economic recovery which could be impacted by a Greek default,” he said.

The Wednesday meeting of eurozone leaders makes it the most important event for the market next week, Gero said. “All eyes will be on TV screens, newspapers and websites like Kitco News,” he said.

NEW MARGINS TAKE EFFECT MONDAY

The CME Group, which operates the Comex and the Nymex, said late Thursday it will reduce margins for gold, silver and platinum futures, effective Monday.

Gero said normally the reduction in margin would have helped lift prices, but given the change of heart by the eurozone officials, the supportive news regarding margins was diminished.

Gero said the reduction in margin means the exchange feels the volatility that prompted the previous rise in margins has eased somewhat. “Margins have to do with volatility. It’s insurance for the buyer and the seller,” he said.

Source; http://www.kitco.com/reports/KitcoNews20120210DeC_metalsoutlook.html

Gold edges up; copper gains on Greece hopes

LOS ANGELES (MarketWatch) — Gold extended its gains during Asian trading hours Wednesday, while copper rallied amid hopes for a deal to save Greece from a messy sovereign default. 

Benchmark April gold futures GC2J +0.15%  added $2.40 an ounce, or 0.1%, to trade at $1,751.2, up from its Tuesday settlement of $1,748.40 an ounce on the Comex division of New York Mercantile Exchange.

The move added to a 1.4% surge Tuesday on news Greece was close to a deal on austerity measures that would allow it to receive its next tranche of international aid.

The March silver contract SI2H +0.00%  tracked gold’s gains to rise 0.2% to $34.25 an ounce, compared to Tuesday settlement at $34.19. 

Copper climbed higher after making a modest 0.3% rise on Tuesday to reverse from recent losses. 

On Wednesday, March copper futures HG2H +1.19%  were up 1.2% to $3.92 a pound, improving from $3.88 a pound in the New York settlement. 

Source; http://www.marketwatch.com/story/gold-edges-up-copper-gains-on-greece-hopes-2012-02-08?link=MW_Nav_MA

Gold tests $1,750 as Greece buys more time

(Reuters) - Spot gold briefly rose above a resistance level of $1,750 an ounce on Wednesday, as investors waited for Greece to grind towards a deal on a rescue package that it urgently needs after missing a string of deadlines.

Athens tested investor's patience yet again on Tuesday by postponing a decision on whether to accept austerity and reform measures in exchange for a 130 billion euro ($172 billion) bailout from the IMF and EU.

Gold could face a short-term pullback if Greece strikes a deal, as it may hurt the appeal of safe-haven assets, but in the long run the lingering euro zone debt crisis is expected to support sentiment in gold.

"If Greece were to agree on everything right away, I don't think it would solve everything because they will still have to implement the measures," said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.

"There are plenty of land mines left."

Spot gold edged up 0.3 percent to $1,749.29 an ounce by 1:50 a.m. ET, after rallying 1.5 percent in the previous session.

U.S. gold gained 0.2 percent to $1,752.60.

Friesen said the uncertainty in Europe and the shadow it casts on the global economy will buoy gold, as central banks around the world are expected to promote accommodative monetary policies to spur growth.

But the risk in Europe would make it difficult for other commodities to stage a sustained rally over the next few months, he added.

Technical analysis suggested spot gold could fall to $1,729.51 an ounce during the day, Reuters market analyst Wang Tao said.

The drop in bullion prices to below $1,710 in the previous session prompted some physical buying in Asia, but purchasing interest ebbed and scrap selling emerged as prices moved towards $1,750, seen as a key resistance, dealers said.

Premiums on gold bars in Singapore stood around $1 an ounce over London prices, said a Singapore-based dealer.

The gold-silver ratio, which measures how many ounces of silver is needed to buy an ounce of gold, hovered above 51, its lowest level in three months.

For most part of 2011, the ratio was below 46, compared to a near 30-year average of 64.

Spot silver inched up 0.2 percent to $34.20 an ounce, leading the precious metals complex with a nearly 24-percent gain so far this year.

Edward Meir, an analyst at INTL FCStone, said silver is facing heavy resistance around $35.70, near a previous high hit in late October.

"Should silver take out this level, we will be in a technical breakout stage, possibly setting the complex up for a push to the $40 mark," he wrote in a research note.
 
Source; http://www.reuters.com/article/2012/02/08/us-markets-precious-idUSTRE80T1QZ20120208

China's 2012 Gold Imports From Hong Kong Reflect 'Growing Appetite' For Gold

Kitco News) - Chinese gold imports from Hong Kong declined sharply in December from the record levels of November, but nevertheless full-year data reflect a continuing trend toward rising demand from the country, analysts said.

China does not publish official gold-trade data, so analysts monitor imports to mainland China from Hong Kong as a proxy. China’s gold imports from Hong Kong fell 62% in December to 38.8 metric tons from a record level of 102.8 in November and 85.7 tons in October, according to Hong Kong’s Census and Statistics Department.

Still, for the full year, imports from Hong Kong totaled almost 428 metric tons, compared to 119 in 2010.

“This is impressive testimony once more to China’s rapidly growing appetite for gold,” said a research note from Commerzbank. “Given the high level of domestic demand and in order to diversify its currency reserves, China is likely to continue to import large quantities of gold in future.”

Mu Li, a commodity research analyst with CPM Group who tracks the Chinese market, said a number of factors led to stronger Chinese fabrication and investment demand for gold in 2010, which carried over into 2011. These include elevated levels of inflation in China, “relatively low real interest rates” and concerns about the global macroeconomic picture, she said.

“In 2010, there were increased government measures against speculators in real estate,” she continued. “That helped some investors start to look to alternative assets, including gold.”

Other analysts also said rising incomes in China lead to gold buying.

As China converts toward a capitalistic society, the middle class has developed an “insatiable” appetite for not only precious metals like gold but also diamonds, said Mike Daly, gold and silver specialist with PFGBEST. The citizenry is encouraged to buy tangible assets to protect some of their new-found wealth. “They’ve become real gold bugs over there,” Daly said.

Imports Rise In Months Through November Before December Decline

China’s gold imports from Hong Kong rose from early autumn into November. Much of this was anticipation for demand around Chinese Lunar New Year celebrations in January, analysts said.

“That is typically a time when people are going out and buying gold both for commemorative reasons and also investment reasons,” Li said.

Analysts pointed out that the upswing in Chinese demand occurred in conjunction with a sell-off that occurred in gold after the metal hit a record high above $1,900 an ounce in early September.  So-called “bargain hunting” set in at the same time jewelry manufacturers and retailers were gearing up for expected Lunar New Year demand, Li said. The now-most-active April contract peaked at $1,925 an ounce on the Comex division of the New York Mercantile Exchange on Sept. 6, then fell back as far as $1,553.40 on Sept. 26 and $1,526.20 on Dec. 29.

“You started seeing some physical buying coming in from the Asian sector,” Daly said. “They were buying dips.”

This was followed by the decline in December imports. Analysts with Barclays Capital cited media reports of ample supply in the Chinese domestic product while spot demand slowed, reducing the need for imports.

Li pointed out that China’s gold imports also fell in December 2010.

“They want to stock up in advance (of the Lunar New Year),” she said. “If they determine they have enough stock…there will be less buying in December. It doesn’t mean there is less demand generally in the country. It just means that a lot of buying has occurred in advance.”

Some might interpret the month-on-month contraction in the December total as negative, said Edel Tully, precious-metals strategist with UBS.

“We, however, think the real outliers were shipments in October and November, which…were greatly in excess of previous months’ volumes,” Tully said. “And while December's activity is the lowest since July, it’s still 245.2% higher (year on year). Here’s a statistic that should lay to rest any doubts over Chinese gold consumption: the 2011 trend of imports from HK was up 258% from 2010.”

Like others, she said much of the large November imports might have been buying ahead of the Chinese Lunar New Year celebrations last month, particularly to avoid high premiums.

“Nonetheless, we don’t think that reveals the full picture,” she said. “We've never dismissed the potential for official sector buying either, although the data certainly contains nothing affirmative in this direction. Bear in mind, too, that trade statistics do not typically reveal the black-and-white story of imports and exports; the grey data, often times more interesting, is not accounted for.”

Meanwhile, Tully said, the decline from November to December has been a frequent occurrence. In the last 11 years, December imports have been less than in the previous month every year except 2009, she said. “So it’s quite possible that there is a seasonal factor at play here.”

Analysts will be monitoring future Chinese data for indications on the trend in demand, particularly in the aftermath of the New Year celebrations, Li said.

“Starting in the latter half of 2011, we observed some slower increases in inflation in China,” she said. “The expectation is that the inflation level will continue to moderate in 2012. That may ease some of the upward support for gold demand.

“However, we do see a lot of interest from investors and consumers in general for both commemorative reasons and investment reasons….We still expect increases in Chinese gold demand for 2012 and for years going forward,” Li said.

Source; http://www.kitco.com/reports/KitcoNews20120207AS_china.html

Gold Prices Expected To Rise Next Week – Survey Participants

Most survey participants in Kitco News’ Gold Survey are expecting gold prices to continue to climb next week, building on recent momentum.

In the Kitco News Gold Survey, out of 32 participants, 24 responded this week. Of those 24 participants, 14 see prices up, while seven see prices down, and three are neutral on prices. Market participants include bullion dealers, investment banks, futures traders, money managers and technical chart analysts.

Those who see higher prices expect the bullish trend to continue as gold has put in five weeks of gains, while those who expect price weakness said the market is due for a correction.

The idea that gold prices need a correction is a view that’s held by many in the survey, whether they expect prices to rise or fall next week. It’s the depth of the price correction that determines whether the survey participant is bullish or bearish. 

One example of this thinking is from Mark Leibovit, editor of VRTrader. “(I’m) going to continue to give uptrend the benefit of the doubt, even though it’s a bit 'long in the tooth' from the Dec. 29 lows. I wouldn't do any new buying, however, until we see a retracement.  Ideally, a pullback to $1,680 in gold would be great, but cannot assure you we will see that now.  Frustration for the bears is that gold could see $1,840 first,” he said.

Even those who are neutral on prices cited the one-way move in gold prices as a reason to be on the sidelines for the time being.

Source; http://www.kitco.com/kgs/goldsurvey_february03.2012.html

Gold Prices Could Correct Next Week, But Trend Remains Up

(Kitco News) - Gold prices could retreat a bit next week following five weeks of gains, but overall market watchers said any correction by the yellow metal next week should be light and short-lived, as the overall trend for gold remains higher.

Prices fell on Friday and were mixed on the week. The most-active April gold contract on the Comex division of the New York Mercantile Exchange settled at $1,740.30 an ounce, up 0.28% on the week. March silver settled at $33.749 an ounce, down 0.12% on the week.

In the Kitco News Gold Survey, out of 32 participants, 24 responded this week. Of those 24 participants, 14 see prices up, while seven see prices down, and three are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical chart analysts.

Gold prices slipped following a surprisingly strong report on U.S. jobs for January. The headline figure of 243,000 jobs created was far above even the highest trade estimates and about double the average forecast of about 120,000. The rise in new jobs pushed the unemployment rate to 8.3% from 8.5%. Marc Chandler, head of global currency strategy at Brown Brothers Harriman, said this data has two-fold implications.

“First, it eases fears that this year was repeating the past two years where a fairly robust fourth quarter was followed by a softer first quarter. This coupled with other recent reports for January show the year has begun off on a firm note. Second, it has policy implications. 

The prospects for QE3 (a third quantitative easing), for which recent comments by (Federal Reserve Chairman Ben) Bernanke suggests the bar may be lower than previously perceived, is not as imminent as some observers have argued,” Chandler said.

Jeff Rosen, economist at Briefing Research, said the jobs report shows the U.S. “economy is moving ahead and is on stable footing.”

This was the largest increase in private payrolls since April 2011, Rosen said. “More importantly, aggregate wages increased 0.4% in January. That level is indicative of strong consumption growth. Payroll growth was widespread,” he added.

Ken Morrison, editor and founder of online newsletter Morrison on the Markets, agreed with those sentiments. “Today's U.S. employment report and upward revisions to past months will re-establish some doubt about the need for monetary stimulus in the U.S., thus the expectations for a mild pullback in gold,” he said.

Morrison said a downside target could be $1,700 to $1,680.

Even analysts who look for gold to end next week higher concede that gold could pull back temporarily before moving up. “I would look for prices to pull back to roughly $1,715, maybe a little deeper. Only a close under $1,675 hints at a turn in prices to the downside. After the pullback and a couple days of basing, I expect gold to blast off next week over $1,775,” said Ralph Preston, senior market analyst at Heritage West Financial.

After a heavy week of economic data this week, next week’s offerings are lighter, which should have less impact on precious-metals trade. Consumer sentiment is slated for release on Friday, which will give some insight to how people are feeling about the U.S. economy.

Next week may return investor’s views toward Europe. There still is no deal regarding the private sector involvement in Greek debt negotiations and analysts have said the longer that drags out, the more potentially bearish it is for markets. Nervousness over Europe’s economic situation has been a weight on gold recently.

PGMS BRIGHTEN

Investors seem to be taking a new look at the platinum group metals, which rallied in January with other commodities. Even with the gains, platinum was one of the top commodity performers after dismal end to 2011. Support could continue for the PGMs following the jobs data, said analysts.

“Based on the employment data and the stronger than expected auto sales report (this) bodes well for retail sales.  The jump in manufacturing employment suggests a strong industrial and manufacturing output.  Rise in construction spending should see another strong construction spending report,” Chandler said.

That could trickle into support for the PGMs as platinum and palladium rose in January on the back of a pickup in auto sales. The main industrial use for PGMs is in catalytic converters in autos.

Labor difficulties in South Africa are also underpinning PGMs. Michael Lewis, analyst at Deutsche Bank, pointed to the work stoppages at Impala’s Rustenburg mine, which have been deemed illegal by a court. This particular stoppage is one of a series that has plagued Impala in the past several quarters, Lewis said, adding that the Rustenburg operation produced about 941,000 ounces in the last fiscal year.

“Certainly the challenges facing the PGM mining sector in South Africa seem to be growing ever greater and we expect that the supply growth for platinum, palladium and rhodium face potentially significant disappointment,” he said.

The problems with PGM production in South Africa come on the heels of news from Norilsk, which said PGM output should be flat year-over-year for 2012, at 2.780 million ounces of palladium and 690,000 ounces of platinum.

“We continue to expect PGMs to outperform gold over the next several quarters as a consequence of improving demand conditions and constraints on supply,” he said.

Source; http://www.kitco.com/reports/KitcoNews20120203DeC_metalsoutlook.html