Investors around the world have long been concerned that the sovereign debt problems being witnessed in Greece will spread to other countries and undermine the economic recovery. Now, there are signs that at least one country could be in danger of following in Greece's footsteps.
According to a report from Reuters, the Portuguese government is facing record costs to insure its debt against default, while Greece is continuing to see its own elevated borrowing costs.
"The Greek crisis has started to spread to the rest of the periphery and Portugal seems to be next in line. The situation there is less urgent than in Greece, but the medium-term outlook is challenging," Reuters quoted Darren Williams of Alliance Bernstein as saying.
If one of the countries in the euro zone does end up defaulting on its debt obligations in the foreseeable future, the impact on world financial markets could be unpredictable.
When it comes to concern about unstable financial markets, one traditional safe harbor has always been precious metals like silver and dealer gold. This is especially the case considering how strong prices have been over the past several years.
Wednesday, April 28, 2010
Monday, April 26, 2010
Superior Gold Group - Precious metals end on a strong note
Precious metal prices ended higher on Friday, 23 April 2010 at Comex. Strong economic data weakened the dollar thereby imparting some shine on precious metals. Prices fell earlier in the day due to weak durable goods report. Then strong housing data pulled up prices.
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Friday, gold for June delivery ended at $1,153.7 an ounce, higher by $10.8 (0.9%) an ounce on the New York Mercantile Exchange. Earlier during the day, it fell to a low of $1,135.2. For the week, gold ended higher by 1.5%. For the month of March, gold slid 0.4%. For the first quarter of this year, gold rose by 1.7%, its sixth quarterly rise. On a year to date basis, gold is higher by 5.2%.
On Friday, May Comex silver futures ended higher by 18 cents (1%) at $18.19 an ounce. For the week, silver lost 2.9%. For the month of March, silver ended higher by 5%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 6.9%.
In the currency market on Friday, the dollar index, which measures the strength of the dollar against basket of six other currencies fell by 0.12%.
Among economic reports expected for the day, The Commerce Department in US reported on Friday, 23 April 2010 that demand for U.S made durable goods dropped for the first time in four months as orders for new aircraft plunged 67%. But, excluding transportation, orders rose at the fastest pace in more than two years. As per the report, orders for durable goods fell 1.3% in March to a seasonally adjusted $176.7 billion after a 1.1% gain in February. Excluding transportation goods, however, new orders rose 2.8% to $136.5 billion in March, the fastest growth since the recession began in December 2007.
Elsewhere, The Commerce Department in US reported on Friday, 23 April 2010 that sales of new homes in US surged 27% in March to a seasonally adjusted annual rate of 411,000 after hitting a record low in February. The increase in sales was boosted by soon-to-expire tax break, low mortgage rates, and favorable weather. It was the largest percentage gain in sales since April 1963. It was the highest sales pace since July, and much stronger than the 335,000 expected. Sales in December, January and February were revised higher. In February, sales were revised to a 324,000 annualized pace, up from 308,000. It's still the lowest on record, dating to 1963. Sales are up 24% compared with March 2009, but are down 70% from the peak in 2005.
Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.
source: BloombergUTV
Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.
On Friday, gold for June delivery ended at $1,153.7 an ounce, higher by $10.8 (0.9%) an ounce on the New York Mercantile Exchange. Earlier during the day, it fell to a low of $1,135.2. For the week, gold ended higher by 1.5%. For the month of March, gold slid 0.4%. For the first quarter of this year, gold rose by 1.7%, its sixth quarterly rise. On a year to date basis, gold is higher by 5.2%.
On Friday, May Comex silver futures ended higher by 18 cents (1%) at $18.19 an ounce. For the week, silver lost 2.9%. For the month of March, silver ended higher by 5%. For the first quarter of this year, silver rose by 3%. On a year to date basis, silver is higher by 6.9%.
In the currency market on Friday, the dollar index, which measures the strength of the dollar against basket of six other currencies fell by 0.12%.
Among economic reports expected for the day, The Commerce Department in US reported on Friday, 23 April 2010 that demand for U.S made durable goods dropped for the first time in four months as orders for new aircraft plunged 67%. But, excluding transportation, orders rose at the fastest pace in more than two years. As per the report, orders for durable goods fell 1.3% in March to a seasonally adjusted $176.7 billion after a 1.1% gain in February. Excluding transportation goods, however, new orders rose 2.8% to $136.5 billion in March, the fastest growth since the recession began in December 2007.
Elsewhere, The Commerce Department in US reported on Friday, 23 April 2010 that sales of new homes in US surged 27% in March to a seasonally adjusted annual rate of 411,000 after hitting a record low in February. The increase in sales was boosted by soon-to-expire tax break, low mortgage rates, and favorable weather. It was the largest percentage gain in sales since April 1963. It was the highest sales pace since July, and much stronger than the 335,000 expected. Sales in December, January and February were revised higher. In February, sales were revised to a 324,000 annualized pace, up from 308,000. It's still the lowest on record, dating to 1963. Sales are up 24% compared with March 2009, but are down 70% from the peak in 2005.
Gold had ended FY 2009 higher by 24%. Silver futures had ended 2009 up 50%. The dollar index had lost 4.2% against its counterparts last year.
source: BloombergUTV
Sunday, April 25, 2010
Gold ends higher on housing data bounce
Gold for June delivery, the most active contract, rose $10.80, or 0.9%, to settle at $1,153.70 an ounce on Comex. The contract had earlier hit an intraday low of $1,135.20 an ounce.
Most metals chased gold higher, but palladium posted losses. Palladium for June delivery lost $1.90, or 0.3%, to $563.20 an ounce.
On the week, gold posted a 1.5% increase despite steep losses on April 16 and Monday. Gold prices lost 2% last Friday on a selloff triggered by news U.S. regulators had charged Goldman Sachs Group Inc. with fraud.
"There's been some ups and downs but gold is on a very nice uptrend," said Richard Ross, a technical analyst with Auerbach Grayson in New York. "This ability to dust itself off is very bullish."
Gold often wears two hats -- as a risky asset as well as a defensive one -- and Friday it was benefitting from both, Ross said.
"Gold is taking on a different group of followers," those who are not attracted to gold just on things are dire, Ross said. "Now gold is also seen as a sign of economic sensitivity ... people own it for a lot of different reasons."
Gold prices seesawed early but took a turn for the worse after the U.S. Commerce Department reported demand for durable goods had dropped 1.3% in March after a 1.1% rise in February.
It reversed course again, however, after a report showed U.S. sales of new homes surged in March. The housing report also lifted stocks and other commodities such as oil. Read more about new-home sales.
But as demand from investors was enough for prices to claw back, physical buyers were seen as sidelined.
"We're not seeing physical buying," said Stephen Platt, an analyst with Archer Financial Services in Chicago. "The buying we're seeing is short covering, rather than some real fresh interest in gold."
Meanwhile, silver for May delivery, the most active contract, gained 18 cents, or 1%, to $18.19 an ounce on Comex. Copper for July delivery rose 2 cents, or 0.7%, to $3.5305 a pound.
Platinum, which on Thursday hit its highest level since July 2008, gave back gains Friday. Platinum for July delivery ended 2.50 lower, or 0.1%, to $1,741.70 an ounce on Comex.
Palladium for June delivery retreated $1.90, or 0.3%, to $563.20 an ounce.
Earlier, the euro hit a one-year low against the dollar but came off the session lows as Greece formally requested aid from the European Union and the International Monetary Fund.
Prime Minister George Papandreou asked to tap a 45 billion euro ($59.9 billion) package after soaring borrowing costs were seen as making it nearly impossible for the country to meet its funding needs on the open market.
The news helped spur a relief rally in the euro, and European stocks were clawing back ground after sliding Thursday when Greece's debt rating was cut by Moody's. Read more on Greece request for aid
The dollar index (INDEX:DXY) , which measures the greenback against a basket of six major currencies, traded lower at 81.35.
Gold ended lower Thursday on the back of a stronger dollar and sidelined physical buyers, but investment demand was strong enough to trim some of the losses toward the end of the session.
source: market watch
Most metals chased gold higher, but palladium posted losses. Palladium for June delivery lost $1.90, or 0.3%, to $563.20 an ounce.
On the week, gold posted a 1.5% increase despite steep losses on April 16 and Monday. Gold prices lost 2% last Friday on a selloff triggered by news U.S. regulators had charged Goldman Sachs Group Inc. with fraud.
"There's been some ups and downs but gold is on a very nice uptrend," said Richard Ross, a technical analyst with Auerbach Grayson in New York. "This ability to dust itself off is very bullish."
Gold often wears two hats -- as a risky asset as well as a defensive one -- and Friday it was benefitting from both, Ross said.
"Gold is taking on a different group of followers," those who are not attracted to gold just on things are dire, Ross said. "Now gold is also seen as a sign of economic sensitivity ... people own it for a lot of different reasons."
Gold prices seesawed early but took a turn for the worse after the U.S. Commerce Department reported demand for durable goods had dropped 1.3% in March after a 1.1% rise in February.
It reversed course again, however, after a report showed U.S. sales of new homes surged in March. The housing report also lifted stocks and other commodities such as oil. Read more about new-home sales.
But as demand from investors was enough for prices to claw back, physical buyers were seen as sidelined.
"We're not seeing physical buying," said Stephen Platt, an analyst with Archer Financial Services in Chicago. "The buying we're seeing is short covering, rather than some real fresh interest in gold."
Meanwhile, silver for May delivery, the most active contract, gained 18 cents, or 1%, to $18.19 an ounce on Comex. Copper for July delivery rose 2 cents, or 0.7%, to $3.5305 a pound.
Platinum, which on Thursday hit its highest level since July 2008, gave back gains Friday. Platinum for July delivery ended 2.50 lower, or 0.1%, to $1,741.70 an ounce on Comex.
Palladium for June delivery retreated $1.90, or 0.3%, to $563.20 an ounce.
Earlier, the euro hit a one-year low against the dollar but came off the session lows as Greece formally requested aid from the European Union and the International Monetary Fund.
Prime Minister George Papandreou asked to tap a 45 billion euro ($59.9 billion) package after soaring borrowing costs were seen as making it nearly impossible for the country to meet its funding needs on the open market.
The news helped spur a relief rally in the euro, and European stocks were clawing back ground after sliding Thursday when Greece's debt rating was cut by Moody's. Read more on Greece request for aid
The dollar index (INDEX:DXY) , which measures the greenback against a basket of six major currencies, traded lower at 81.35.
Gold ended lower Thursday on the back of a stronger dollar and sidelined physical buyers, but investment demand was strong enough to trim some of the losses toward the end of the session.
source: market watch
Wednesday, April 21, 2010
Gold futures up on positive global trend
Gold prices rose by Rs 26 or 0.16 per cent to Rs 16,747 per ten gram in futures trading today on sustained buying and firming global trend.
At the Multi Commodity Exchange, gold for August-month contract rose Rs 26, or 0.16 per cent to Rs 16,747 per ten gram, with an open interest of 1,217 lots.
The metal for delivery in June contract also moved up Rs 23, or 0.14 per cent to Rs 16,650 per ten gram, with a business volume of 16,931 lots.
Marketmen said, sustained buying by traders after reports of firming global trend, led to a rise in gold prices at futures market.
Meanwhile, gold rose by $4 to $1,144.40 an ounce in the Asian region.
source: TOI
At the Multi Commodity Exchange, gold for August-month contract rose Rs 26, or 0.16 per cent to Rs 16,747 per ten gram, with an open interest of 1,217 lots.
The metal for delivery in June contract also moved up Rs 23, or 0.14 per cent to Rs 16,650 per ten gram, with a business volume of 16,931 lots.
Marketmen said, sustained buying by traders after reports of firming global trend, led to a rise in gold prices at futures market.
Meanwhile, gold rose by $4 to $1,144.40 an ounce in the Asian region.
source: TOI
Monday, April 19, 2010
Oil prices cause alarm in some quarters
Commodities investors who have benefited from rising precious metals prices in recent months may be a bit more wary when it comes to another key resource - oil.
This is because financial experts are becoming concerned that oil prices could be rising at a rate that will impede the slowly emerging economic recovery around the world.
A report this week in London's Financial Times newspaper noted that the current $87 price level for a barrel of oil is inviting speculation that the commodity is headed back over $100. This would raise the danger of a double-dip recession by increasing the existing financial burden on consumers and businesses.
The newspaper added that some major Wall Street institutions predict that oil will be priced above $100 next year, due in part to increased economic activity.
Investors who are unconvinced that the current recovery will take hold have a handful of options to consider when it comes to stability. For example, dealer gold has long been seen as a safe haven investment during times of uncertainty.
This is because financial experts are becoming concerned that oil prices could be rising at a rate that will impede the slowly emerging economic recovery around the world.
A report this week in London's Financial Times newspaper noted that the current $87 price level for a barrel of oil is inviting speculation that the commodity is headed back over $100. This would raise the danger of a double-dip recession by increasing the existing financial burden on consumers and businesses.
The newspaper added that some major Wall Street institutions predict that oil will be priced above $100 next year, due in part to increased economic activity.
Investors who are unconvinced that the current recovery will take hold have a handful of options to consider when it comes to stability. For example, dealer gold has long been seen as a safe haven investment during times of uncertainty.
Wednesday, April 14, 2010
Greece bailout might increase gold prices
The recent plan to help bail out the struggling Greek economy will have a positive effect on the gold market.
That's the assessment of GFMS Ltd. Executive chairman Philip Klapwijk, who, according to Bloomberg News, told a precious metals meeting that gold could reach up to $1,300 per ounce as investors look for alternatives to bonds.
By the end of trading Monday, gold had slipped from a high of $1,170.70, to close the day at $1,160.10.
Analysts like James Moore from thebulliondesk.com feel that there is still plenty of growth potential for gold.
"Gold still needs to close above $1,162 to confirm the upside breakout," Moore said in his daily metals report Monday, according to The Street. "Gold still has room before entering overbought territory and is well placed to push on towards the $1,200 mark."
However, the earlier sentiment about gold prices was tempered by a revision in the 2010 and 2011 gold forecast by Goldman Sachs. Although the bank still sees gold hitting record highs in 2011, it reduced its 2010 forecast from $1,265 to $1,165 an ounce and its 2011 numbers to $1,350 an ounce from an earlier forecast of $1,425.
That's the assessment of GFMS Ltd. Executive chairman Philip Klapwijk, who, according to Bloomberg News, told a precious metals meeting that gold could reach up to $1,300 per ounce as investors look for alternatives to bonds.
By the end of trading Monday, gold had slipped from a high of $1,170.70, to close the day at $1,160.10.
Analysts like James Moore from thebulliondesk.com feel that there is still plenty of growth potential for gold.
"Gold still needs to close above $1,162 to confirm the upside breakout," Moore said in his daily metals report Monday, according to The Street. "Gold still has room before entering overbought territory and is well placed to push on towards the $1,200 mark."
However, the earlier sentiment about gold prices was tempered by a revision in the 2010 and 2011 gold forecast by Goldman Sachs. Although the bank still sees gold hitting record highs in 2011, it reduced its 2010 forecast from $1,265 to $1,165 an ounce and its 2011 numbers to $1,350 an ounce from an earlier forecast of $1,425.
Monday, April 12, 2010
Greek credit rating downgraded over debt
People who have been considering investments in dealer gold as a way to wait out any upcoming economic difficulties may have gotten further motivation this week when Fitch Ratings downgraded Greece's credit rating.
Greece has been alarming investors for weeks amid speculation that it will be unable to cover its future debt obligations, largely because of a budget deficit that is far above the level deemed permissible by European Union standards.
There has been growing speculation that the country will require a financial bailout package from either the EU or the International Monetary Fund if it is to get its fiscal situation back under control.
Further complicating the matter has been the unrest among some workers in Greece that proposed budget cutbacks have led to. There have also been reports in recent days of wealthy Greeks withdrawing their deposits from the country's banks, which could make it even harder to get back to fiscal health.
In the latest development on this situation, Fitch Ratings indicated Friday that it had downgraded Greece's long-term default ratings to BBB- from BBB+ with a negative outlook.
"The downgrade reflects the intensification of fiscal challenges in response to more adverse prospects for economic growth and increased interest costs. It also reflects ongoing uncertainties about the government's financing strategy in the context of increased capital market volatility," explained Fitch, adding that the country also faces a "sharp rise in interest rates" as well as a weaker outlook for economic growth.
The credit rating company acknowledged that there were also "some early indications of improvements in fiscal outturns and the strength of the government's commitment to fiscal consolidation measures."
For Greece, one of the biggest financial problems in the coming months could be an elevated cost of borrowing brought on by the rating downgrade and other factors.
Looking ahead though, Greece may be just one of a number of nations around the world with ticking debt time bombs. Spain and Portugal are widely cited for their own possible deficit woes, while even the United States has not been immune to speculation that it could end up struggling to meet debt obligations in the coming years.
For investors who are wary of these disturbing financial prospects, one option could be to consult with silver and gold dealers about the stability that investing in precious metals can offer in the current fiscal climate.
Greece has been alarming investors for weeks amid speculation that it will be unable to cover its future debt obligations, largely because of a budget deficit that is far above the level deemed permissible by European Union standards.
There has been growing speculation that the country will require a financial bailout package from either the EU or the International Monetary Fund if it is to get its fiscal situation back under control.
Further complicating the matter has been the unrest among some workers in Greece that proposed budget cutbacks have led to. There have also been reports in recent days of wealthy Greeks withdrawing their deposits from the country's banks, which could make it even harder to get back to fiscal health.
In the latest development on this situation, Fitch Ratings indicated Friday that it had downgraded Greece's long-term default ratings to BBB- from BBB+ with a negative outlook.
"The downgrade reflects the intensification of fiscal challenges in response to more adverse prospects for economic growth and increased interest costs. It also reflects ongoing uncertainties about the government's financing strategy in the context of increased capital market volatility," explained Fitch, adding that the country also faces a "sharp rise in interest rates" as well as a weaker outlook for economic growth.
The credit rating company acknowledged that there were also "some early indications of improvements in fiscal outturns and the strength of the government's commitment to fiscal consolidation measures."
For Greece, one of the biggest financial problems in the coming months could be an elevated cost of borrowing brought on by the rating downgrade and other factors.
Looking ahead though, Greece may be just one of a number of nations around the world with ticking debt time bombs. Spain and Portugal are widely cited for their own possible deficit woes, while even the United States has not been immune to speculation that it could end up struggling to meet debt obligations in the coming years.
For investors who are wary of these disturbing financial prospects, one option could be to consult with silver and gold dealers about the stability that investing in precious metals can offer in the current fiscal climate.
Friday, April 9, 2010
Budget deficit growing larger in just a short time
For taxpayers who are alarmed about the federal deficit's rate of growth in recent years, a look at the short-term numbers for the current year will offer little consolation.
New data from the Congressional Budget Office indicates that for the first six months of fiscal year 2010, the government ran a $714 billion deficit. One potential bright spot here is the fact that this figure was $67 billion than that recorded at this time last year.
The report also noted that federal outlays and revenues had fallen by a respective 6 and 4 percent margin over the past year. Much of the current improvement was said to be fueled by a reduction in the projected cost of the government's Troubled Asset Relief (TARP) program.
Looking ahead though, the federal government may eventually find itself forced to make potentially unpopular and difficult decisions to cope with a budget deficit that in time could threaten the nation's credit rating.
For those who are unconvinced that the current recovery will be strong or lead to substantial long-term improvements, one solid investment option to consider may be dealer gold.
New data from the Congressional Budget Office indicates that for the first six months of fiscal year 2010, the government ran a $714 billion deficit. One potential bright spot here is the fact that this figure was $67 billion than that recorded at this time last year.
The report also noted that federal outlays and revenues had fallen by a respective 6 and 4 percent margin over the past year. Much of the current improvement was said to be fueled by a reduction in the projected cost of the government's Troubled Asset Relief (TARP) program.
Looking ahead though, the federal government may eventually find itself forced to make potentially unpopular and difficult decisions to cope with a budget deficit that in time could threaten the nation's credit rating.
For those who are unconvinced that the current recovery will be strong or lead to substantial long-term improvements, one solid investment option to consider may be dealer gold.
Wednesday, April 7, 2010
Greek budget ripples continuing to be felt
Greece is continuing to affect the value of the Euro with its sovereign debt problems, while also giving investors a glimpse of what could be things to come if other nations, such as the U.S., end up on a similar path in the future.
A Wall Street Journal report noted that early this week, the cost of insuring Greek government debt went up significantly, in part due to questions about whether the country will require a bailout from the International Monetary Fund and whether it has the resources to funds its own budgetary needs at this point.
The financial newspaper noted that the yield on Greek 10-year government bonds was up to 7.1 percent, which was said to be 3.97 percentage points higher than Germany's. The Journal also cited concern among investors who have noticed a trend of wealthy Greeks withdrawing their money from the country's banks, which could result in a decline in available capital.
While U.S. officials have long downplayed the idea that the government will ever default on its own credit obligations, the country already spends hundreds of billions of dollars each year just to pay interest on the national debt.
Given what may eventually prove to be an unsustainable financial climate, investors who consider dealer gold may find themselves better shielded from any fiscal instability in the coming years.
A Wall Street Journal report noted that early this week, the cost of insuring Greek government debt went up significantly, in part due to questions about whether the country will require a bailout from the International Monetary Fund and whether it has the resources to funds its own budgetary needs at this point.
The financial newspaper noted that the yield on Greek 10-year government bonds was up to 7.1 percent, which was said to be 3.97 percentage points higher than Germany's. The Journal also cited concern among investors who have noticed a trend of wealthy Greeks withdrawing their money from the country's banks, which could result in a decline in available capital.
While U.S. officials have long downplayed the idea that the government will ever default on its own credit obligations, the country already spends hundreds of billions of dollars each year just to pay interest on the national debt.
Given what may eventually prove to be an unsustainable financial climate, investors who consider dealer gold may find themselves better shielded from any fiscal instability in the coming years.
Monday, April 5, 2010
Precious metal prices benefiting from economic optimism
Silver and gold dealers are likely to see growing demand for precious metals among investors in the coming months, in light of an improving economy that has provided some momentum for commodities in general in recent days.
For example, a recent Associated Press report noted that platinum and palladium prices had gained last week, along with other metals such as copper and silver. Many of these materials are required for the manufacture of vehicles and electronics, among other consumer products.
The wire service added that improving auto sales had fueled the price gains for platinum, which was reportedly trading around $1,669 an ounce last week, and palladium, which was around $490 at the same time.
Changing technology has also created demand for other materials that may only become increasingly valuable in the coming years. For example, various media reports have noted that companies are now seeking out new deposits of lithium in an effort to meet the long-term demand for its use in batteries for hybrid and electric vehicles.
Precious metals have long been seen as a safe haven investment for times of economic uncertainty, but new technologies have helped make these commodities more in demand regardless of what the financial climate may be.
For example, a recent Associated Press report noted that platinum and palladium prices had gained last week, along with other metals such as copper and silver. Many of these materials are required for the manufacture of vehicles and electronics, among other consumer products.
The wire service added that improving auto sales had fueled the price gains for platinum, which was reportedly trading around $1,669 an ounce last week, and palladium, which was around $490 at the same time.
Changing technology has also created demand for other materials that may only become increasingly valuable in the coming years. For example, various media reports have noted that companies are now seeking out new deposits of lithium in an effort to meet the long-term demand for its use in batteries for hybrid and electric vehicles.
Precious metals have long been seen as a safe haven investment for times of economic uncertainty, but new technologies have helped make these commodities more in demand regardless of what the financial climate may be.
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