Many market observers expect the price of physical, dealer gold - as well as futures - to rise in the next few days, as the Federal Reserve reconsiders its monetary policy at a meeting this week. Given the weak state of the economy, particularly with regards to employment, it seems likely that the central bank will consider engaging in further quantitative easing.
QE means that the bank will buy assets - probably Treasury notes or mortgage-backed securities - with freshly-printed dollars, adding to the supply of money and theoretically stimulating demand. Some, however, have compared these efforts to "pushing on a string" - given banks' and companies' current uncertainties about the economy, monetary policy and taxes, many are simply hoarding cash in case they have some lean years ahead.
If that remains the case, handing out more dollars won't do much beyond devaluing the greenback and increasing the threat of inflation.
In an inflationary environment, hard assets like dealer gold and silver are king and queen. Lately, the dollar and gold bullion have been rising in tandem, an unusual situation brought on by the recession. Many analysts, however, expect that relationship to reverse soon, with gold bullion and spot prices rising as the dollar falls.
Showing posts with label gold prices. Show all posts
Showing posts with label gold prices. Show all posts
Monday, August 9, 2010
Sunday, July 4, 2010
Superior Gold Group - Gold recovers from five-week low as economies struggle
After a rough few days, gold futures rose 1 percent to trade at $1,210.55 per troy ounce in New York. Gold prices hit a record high of $1,266.50 per troy ounce in every major currency in mid-June, but fell for the rest of that month, briefly sinking below $1,200.
The specter of a double-dip recession, combined with inflationary fears that have been dogging the markets, combined to help support the yellow metal today. In Europe, a shift to austerity in England, Germany, Greece and Ireland could undercut growth and leave consumer demand and unemployment sluggish.
In the U.S., the states' budgets are in horrid shape and unemployment fell in June for the first time since 2009. A large portion of the drop in unemployment came from the ending of temporary contracts for census workers, a process which will continue for months, weighing on jobless figures.
If the federal government doesn't step in to artificially stimulate demand, the economy may slump - but if it does, it could trigger rapid inflation.
Investors hedge against both possibilites by putting their money in gold, relying on it as a store of value.
The specter of a double-dip recession, combined with inflationary fears that have been dogging the markets, combined to help support the yellow metal today. In Europe, a shift to austerity in England, Germany, Greece and Ireland could undercut growth and leave consumer demand and unemployment sluggish.
In the U.S., the states' budgets are in horrid shape and unemployment fell in June for the first time since 2009. A large portion of the drop in unemployment came from the ending of temporary contracts for census workers, a process which will continue for months, weighing on jobless figures.
If the federal government doesn't step in to artificially stimulate demand, the economy may slump - but if it does, it could trigger rapid inflation.
Investors hedge against both possibilites by putting their money in gold, relying on it as a store of value.
Friday, June 11, 2010
Superior Gold Group - Euro crisis pushes gold to yet another record
Long-term investors in dealer gold had their foresight rewarded yet again this week as the precious metal soared to another record high due to concern about the European debt crisis.
A Tuesday Reuters report noted that gold's new record price now stands at above $1,250 per ounce, while gold futures for August delivery stood at another record of $1,254.50. The wire service also noted that the gold prices have risen about 12 percent during the current quarter alone.
Elsewhere, a report from Bloomberg News quoted Paul Walker, CEO of GFMS, Ltd., as saying that gold prices could trade between $1,050 and $1,300 for the rest of this year, with the potential to soar as high as $2,000 per ounce if the current European debt crisis extends to other regions of the world.
The current sovereign debt crisis focuses on fears that Greece, followed by Spain and Portugal, will eventually default on its bond obligations, which would result in billions of dollars in fresh losses for European banks.
However, the United States and other countries, including Mexico and Great Britain, have been receiving their own levels of investor concern about heavy budget deficits and long-term fiscal problems.
A Tuesday Reuters report noted that gold's new record price now stands at above $1,250 per ounce, while gold futures for August delivery stood at another record of $1,254.50. The wire service also noted that the gold prices have risen about 12 percent during the current quarter alone.
Elsewhere, a report from Bloomberg News quoted Paul Walker, CEO of GFMS, Ltd., as saying that gold prices could trade between $1,050 and $1,300 for the rest of this year, with the potential to soar as high as $2,000 per ounce if the current European debt crisis extends to other regions of the world.
The current sovereign debt crisis focuses on fears that Greece, followed by Spain and Portugal, will eventually default on its bond obligations, which would result in billions of dollars in fresh losses for European banks.
However, the United States and other countries, including Mexico and Great Britain, have been receiving their own levels of investor concern about heavy budget deficits and long-term fiscal problems.
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
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.
Saturday, March 27, 2010
U.S. losing jobs to trade deficit with China
One reason why the price of dealer gold has remained strong is that many Americans remain unconvinced that an economic recovery has completely taken hold, and that a double dip recession could be on the horizon.
Among the various economic indicators that have provided mixed news in recent months, unemployment has been perhaps the most closely followed, having hovered at or around 10 percent since late last year.
The recession has resulted in millions of lost jobs, but it's not the only thing fueling the unemployment situation in the U.S., notes one report. According to new data from the Economic Policy Institute, the ever-increasing trade deficit between the U.S. and China resulted in 2.4 million lost jobs nationwide between 2001 and 2008.
The report cited an artificially low currency value in China as one of the leading contributors to the job losses, as well as the $2 trillion in foreign exchange reserves it has acquired since 2001.
One problem to watch for with a stubbornly high unemployment rate is whether consumer spending will be held back to a point that undermines the overall economy and continues to contribute to high loan and mortgage default rates.
Among the various economic indicators that have provided mixed news in recent months, unemployment has been perhaps the most closely followed, having hovered at or around 10 percent since late last year.
The recession has resulted in millions of lost jobs, but it's not the only thing fueling the unemployment situation in the U.S., notes one report. According to new data from the Economic Policy Institute, the ever-increasing trade deficit between the U.S. and China resulted in 2.4 million lost jobs nationwide between 2001 and 2008.
The report cited an artificially low currency value in China as one of the leading contributors to the job losses, as well as the $2 trillion in foreign exchange reserves it has acquired since 2001.
One problem to watch for with a stubbornly high unemployment rate is whether consumer spending will be held back to a point that undermines the overall economy and continues to contribute to high loan and mortgage default rates.
Thursday, March 11, 2010
Gold prices continue to offer stability
Dealer gold prices have continued to remain strong even in light of a supposed economic recovery in recent months. This is largely due to the considerable uncertainty that continues to surround the global economy, especially in the area of jobs.
Gold has long been seen as a traditionally safe alternative to equities markets during times of economic uncertainty. However, it may be time to revise this formula as gold continues to enjoy strong support from investors even in light of a rising gross domestic product in recent months.
Part of this is due to lingering uncertainty about whether a recovery is actually at hand. There is also an increase in demand for gold from emerging economies that are building a middle class for the first time, or which have industries that use precious metals for manufacturing activities.
"Investors want to hold a currency that’s going to maintain its value. Gold is a part of the currency crosses now. The international currency is gold," Frank Lesh of FuturePath Trading LLC in Chicago was quoted as saying in a recent Bloomberg News report.
Given the stability that gold and other precious metal investments have produced in recent years, now may be the time to speak with a dealer about the market.
Gold has long been seen as a traditionally safe alternative to equities markets during times of economic uncertainty. However, it may be time to revise this formula as gold continues to enjoy strong support from investors even in light of a rising gross domestic product in recent months.
Part of this is due to lingering uncertainty about whether a recovery is actually at hand. There is also an increase in demand for gold from emerging economies that are building a middle class for the first time, or which have industries that use precious metals for manufacturing activities.
"Investors want to hold a currency that’s going to maintain its value. Gold is a part of the currency crosses now. The international currency is gold," Frank Lesh of FuturePath Trading LLC in Chicago was quoted as saying in a recent Bloomberg News report.
Given the stability that gold and other precious metal investments have produced in recent years, now may be the time to speak with a dealer about the market.
Thursday, February 18, 2010
Gold Prices Fell In After Hour Trades As Fed Raises Discount Rates
Gold prices fell in the after hour trades as the Fed raised the discount rates making markets mistrustful about the buying in commodities.
The Fed statement, released after the close of Thursday's trading, said the moves were approved unanimously by the Federal Reserve Board, and would take effect on Friday, February 19th. The fed said it is increasing the so-called discount rate by 25 basis points to 0.75 percent.
COMEX Gold settled floor trading at $1118.70, down just $1.40, or 0.1%, on the Comex division of the New York Mercantile Exchange. The LOCO Gold prices were at $1108.5 per ounce up $ 1.8.
MCX Gold closed at Rs 16775 per 10 grams up Rs 19. The markets got topped at Rs 16845 per 10 grams.
The U.S. Labor Department said that jobless claims were up 31,000 last week to 473,000, more than expected.
The Labor Department also said that the producer price index was up 1.4% in January and up 4.6% from a year ago, more than expected.
The U.S. Department of Energy (DOE) said that crude oil supplies were up 3.1 million barrels last week to 334.5 million barrels. Supplies of gasoline were up 1.7 million barrels and heating oil supplies were down 1.4 million barrels.
April crude oil finished up $1.69 at $79.42, the highest close in four weeks.
Source: Bloomberg
The Fed statement, released after the close of Thursday's trading, said the moves were approved unanimously by the Federal Reserve Board, and would take effect on Friday, February 19th. The fed said it is increasing the so-called discount rate by 25 basis points to 0.75 percent.
COMEX Gold settled floor trading at $1118.70, down just $1.40, or 0.1%, on the Comex division of the New York Mercantile Exchange. The LOCO Gold prices were at $1108.5 per ounce up $ 1.8.
MCX Gold closed at Rs 16775 per 10 grams up Rs 19. The markets got topped at Rs 16845 per 10 grams.
The U.S. Labor Department said that jobless claims were up 31,000 last week to 473,000, more than expected.
The Labor Department also said that the producer price index was up 1.4% in January and up 4.6% from a year ago, more than expected.
The U.S. Department of Energy (DOE) said that crude oil supplies were up 3.1 million barrels last week to 334.5 million barrels. Supplies of gasoline were up 1.7 million barrels and heating oil supplies were down 1.4 million barrels.
April crude oil finished up $1.69 at $79.42, the highest close in four weeks.
Source: Bloomberg
Thursday, February 4, 2010
Gold Trades Near Three-Month Low After Dollar Extends Rally
Gold traded little changed near a three-month low after plunging the most in 14 months yesterday as the dollar’s rally reduced the appeal of the metal as an alternative investment. Silver traded near a five-month low.
Bullion for immediate delivery rose as much as 0.5 percent earlier after plunging 4.2 percent to a three-month low yesterday. Prices pared gains as the dollar rallied to its highest in more than eight months against the euro amid concern widening deficits will hamper Europe’s economic recovery.
Gold enjoyed a short “pause after yesterday’s sell-off,” said Hiroyuki Kikukawa, general manager of research at Tokyo- based IDO Securities Co. “If you look at the size of yesterday’s price drops in overall commodities and equities, it’s just like one of the big funds being forced to close.”
Gold for immediate delivery fell 22 cents to $1,063.48 an ounce at 10:55 a.m. in Tokyo after touching $1,059.68 yesterday, the lowest level since Nov. 3. Bullion for April delivery, the most widely held contract, gained 0.1 percent to $1,063.80 an ounce on the Comex division of the New York Mercantile Exchange.
The Reuters-Jefferies CRB Index of 19 raw materials fell 2.6 percent to 263.67 yesterday, the biggest drop since Aug. 14. After reaching a 14-month high in January, the commodity gauge ended the month down 6.3 percent, the most since November 2008, on concern that a faltering global recovery will delay increases in consumption.
Unemployment, Deficits
A U.S. Labor Department report yesterday showed first-time claims for unemployment insurance unexpectedly rose to the highest level in seven weeks. Stocks tumbled around the world on concern Greece, Spain and Portugal will have difficulty curbing budget deficits.
The dollar last traded at $1.3681 per euro from $1.3723 in New York yesterday. It earlier reached $1.3669, the strongest level since May 20. Crude oil fell 0.3 percent to $72.95 a barrel after dropping 5 percent yesterday, its biggest decline since July 29.
Silver for immediate delivery gained as much as 0.8 percent to $15.3725 an ounce and last traded at $15.265, down 0.1 percent. The price dropped 6.8 percent yesterday, the biggest decline since December 2008. It touched $15.185 yesterday, the lowest level since Sept. 2.
Palladium dropped 2.9 percent to $397.13 an ounce, the lowest level since Dec. 31. It lost 6.5 percent yesterday, the most since Feb. 23. Spot platinum fell 0.9 percent at $1,493.25 an ounce, after losing 4.4 percent yesterday.
Source: Bloomberg
Bullion for immediate delivery rose as much as 0.5 percent earlier after plunging 4.2 percent to a three-month low yesterday. Prices pared gains as the dollar rallied to its highest in more than eight months against the euro amid concern widening deficits will hamper Europe’s economic recovery.
Gold enjoyed a short “pause after yesterday’s sell-off,” said Hiroyuki Kikukawa, general manager of research at Tokyo- based IDO Securities Co. “If you look at the size of yesterday’s price drops in overall commodities and equities, it’s just like one of the big funds being forced to close.”
Gold for immediate delivery fell 22 cents to $1,063.48 an ounce at 10:55 a.m. in Tokyo after touching $1,059.68 yesterday, the lowest level since Nov. 3. Bullion for April delivery, the most widely held contract, gained 0.1 percent to $1,063.80 an ounce on the Comex division of the New York Mercantile Exchange.
The Reuters-Jefferies CRB Index of 19 raw materials fell 2.6 percent to 263.67 yesterday, the biggest drop since Aug. 14. After reaching a 14-month high in January, the commodity gauge ended the month down 6.3 percent, the most since November 2008, on concern that a faltering global recovery will delay increases in consumption.
Unemployment, Deficits
A U.S. Labor Department report yesterday showed first-time claims for unemployment insurance unexpectedly rose to the highest level in seven weeks. Stocks tumbled around the world on concern Greece, Spain and Portugal will have difficulty curbing budget deficits.
The dollar last traded at $1.3681 per euro from $1.3723 in New York yesterday. It earlier reached $1.3669, the strongest level since May 20. Crude oil fell 0.3 percent to $72.95 a barrel after dropping 5 percent yesterday, its biggest decline since July 29.
Silver for immediate delivery gained as much as 0.8 percent to $15.3725 an ounce and last traded at $15.265, down 0.1 percent. The price dropped 6.8 percent yesterday, the biggest decline since December 2008. It touched $15.185 yesterday, the lowest level since Sept. 2.
Palladium dropped 2.9 percent to $397.13 an ounce, the lowest level since Dec. 31. It lost 6.5 percent yesterday, the most since Feb. 23. Spot platinum fell 0.9 percent at $1,493.25 an ounce, after losing 4.4 percent yesterday.
Source: Bloomberg
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