By Pham-Duy Nguyen
http://www.bloomberg.com/apps/news?pid=20601081&sid=aDyZ2gge5vg0&refer=australia
March 11 (Bloomberg) -- Gold futures rose, rebounding from the lowest price in a month, as the slumping dollar enhanced the appeal of the precious metal as an alternative investment. Silver gained the most in two weeks.
The dollar fell as much as 1.2 percent against a weighted basket of six major currencies. Gold and the dollar historically have moved in the opposite direction. The correlation hasn’t held this year as investors purchased both assets as a hedge against turmoil in financial markets.
“Gold is still an exceptional buy,” said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago. “Traders will start looking at more traditional relationships like future inflation, government spending and devaluing of currencies.”
Gold futures for April delivery rose $14.80, or 1.7 percent, to $910.70 an ounce on the Comex division of the New York Mercantile Exchange. Yesterday, the price touched $891.10, the lowest since Feb. 3.
Silver futures for May delivery gained 26 cents, or 2.1 percent, to $12.80 an ounce, the biggest gain since Feb. 20. Gold has gained 3 percent in 2009, while silver is up 13 percent.
Gold reached a record $1,033.90 on March 17 as the dollar headed for an all-time low against the euro. In the second half of 2008, the dollar rallied as investors sought a haven from declining equity markets. Gold gained 5.5 percent last year, while the dollar rose 6 percent against the basket of currencies.
Gold’s gains accelerated today after U.S. equities pared gains. The Standard & Poor’s 500 Index climbed as much as 1.7 percent before dropping. Yesterday, the gauge jumped 6.4 percent, the most this year. Gold fell as low as $892.60 today.
A rebound in equities would “be a bearish development as investment transfers from gold toward riskier assets,” said Tom Pawlicki, an analyst at MF Global Ltd. in Chicago.
Since March 6, investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, has been unchanged at 1,029 metric tons, close to the all-time high.
“It’s becoming evident that the buying in ETFs may have been led by a small group of hedge funds, whose actions can be incredibly difficult to predict,” Pawlicki said. “It’s also likely that they are now under water on those positions.”
Greenlight Capital Inc., the $5.1 billion hedge fund run by David Einhorn, said last month it invested in gold for the first time in the fourth quarter, making a bullion-backed exchange- traded fund its largest holding.
Showing posts with label Gold. Show all posts
Showing posts with label Gold. Show all posts
Wednesday, March 11, 2009
Monday, March 9, 2009
Gold slides more than 2 percent as dollar rises
Mon Mar 9, 2009 1:00pm EDT
By Jan Harvey
LONDON (Reuters) - Gold prices slipped more than 2 percent on Monday after the dollar rose and data showed a small fall in holdings of exchange traded funds.
Spot gold fell to a low of $913.53 an ounce and was at $916.60/917.60 an ounce at 1629 GMT from $939.60 late in New York on Friday.
"Right now the dollar is a little bit stronger and equity markets (generally) are a bit stronger as well so we don't see much inflows into gold exchange traded funds (ETFs)," said Commerzbank analyst Eugen Weinberg.
The world's largest gold-backed exchange traded fund (ETF) recorded its first decline since January 8. Its holdings dipped 0.3 tonnes to 1,028.99 tonnes as of March 8.
UBS analyst John Reade said the total gold holdings of the nine major ETFs the bank follows fell to 48.30 million ounces on March 6 from a revised total of 48.40 million ounces previously.
The dollar gained across the board as global recession fears and banking sector concerns weighed on world stock markets, spurring safe-haven demand for the greenback.
A higher U.S. currency makes metals priced in dollars more expensive for holders of other currencies. Gold is often also used as an alternative when the dollar falls out of favor.
Earlier a rise in U.S. stocks also weighed on gold, which is used a hedge against financial market instability. .N
SOLID ETF DEMAND
Equity weakness broadly supported gold toward the end of last week, although the precious metal was caught up in a stocks sell-off last Monday as investors sought liquidity.
Demand for the precious metal from ETFs, which issue securities backed by physical stocks of gold, was a major price driver earlier in the year. Taders said expected these inflows to resume as uncertainty grows.
"I think that there will be enough worrying news in the first half of 2009 for ETF demand to remain solid," said David Thurtell, an analyst at Citigroup.
Holdings of Julius Baer's (BAER.VX) gold-backed exchange traded fund rose 109,000 ounces or 18 percent last week, the bank said in a weekly statement on Monday.
Demand for gold from jewelry buyers in traditionally strong markets such as India and China remained weak, however.
Traders said scrap sales also put pressure on premiums for gold bars.
By Jan Harvey
LONDON (Reuters) - Gold prices slipped more than 2 percent on Monday after the dollar rose and data showed a small fall in holdings of exchange traded funds.
Spot gold fell to a low of $913.53 an ounce and was at $916.60/917.60 an ounce at 1629 GMT from $939.60 late in New York on Friday.
"Right now the dollar is a little bit stronger and equity markets (generally) are a bit stronger as well so we don't see much inflows into gold exchange traded funds (ETFs)," said Commerzbank analyst Eugen Weinberg.
The world's largest gold-backed exchange traded fund (ETF) recorded its first decline since January 8. Its holdings dipped 0.3 tonnes to 1,028.99 tonnes as of March 8.
UBS analyst John Reade said the total gold holdings of the nine major ETFs the bank follows fell to 48.30 million ounces on March 6 from a revised total of 48.40 million ounces previously.
The dollar gained across the board as global recession fears and banking sector concerns weighed on world stock markets, spurring safe-haven demand for the greenback.
A higher U.S. currency makes metals priced in dollars more expensive for holders of other currencies. Gold is often also used as an alternative when the dollar falls out of favor.
Earlier a rise in U.S. stocks also weighed on gold, which is used a hedge against financial market instability. .N
SOLID ETF DEMAND
Equity weakness broadly supported gold toward the end of last week, although the precious metal was caught up in a stocks sell-off last Monday as investors sought liquidity.
Demand for the precious metal from ETFs, which issue securities backed by physical stocks of gold, was a major price driver earlier in the year. Taders said expected these inflows to resume as uncertainty grows.
"I think that there will be enough worrying news in the first half of 2009 for ETF demand to remain solid," said David Thurtell, an analyst at Citigroup.
Holdings of Julius Baer's (BAER.VX) gold-backed exchange traded fund rose 109,000 ounces or 18 percent last week, the bank said in a weekly statement on Monday.
Demand for gold from jewelry buyers in traditionally strong markets such as India and China remained weak, however.
Traders said scrap sales also put pressure on premiums for gold bars.
Gold: Weak jewelry demand, strong dollar hit prices
Weak jewelry demand, strong dollar hit prices
SPDR gold ETF records first outflow since early January
Julius Baer's gold ETF up 18 percent last week (Recasts, updates prices, market activity; adds second byline, dateline, previously LONDON)
By Frank Tang and Jan Harvey
http://www.guardian.co.uk/business/feedarticle/8394276
NEW YORK/LONDON, March 9 (Reuters) - Gold prices dropped more than 2 percent on Monday, as a dollar rise and slight drop of holdings of gold-backed exchange traded funds triggered heavy sell-stop orders.
Higher gold prices and global recession weighed down gold jewelry buying, which accounts for about 60 percent of total gold demand, traders said. "There is a big bull-and-bear disparity in gold. There is investment buying but no jewelry buying, which has dropped sharply," said Jonathan Jossen, a COMEX gold floor trader.
Spot gold fell to a low of $911.95 an ounce and was at $918.15 an ounce at 1:22 p.m. EDT (1722 GMT), down 2.3 percent from its last quote $939.60 in New York late Friday.
Gold for April delivery settled down $24.70, or 2.6 percent, at $918.00 an ounce on the COMEX division of the New York Mercantile Exchange. Demand for gold from jewelry buyers in traditionally strong markets remained weak.
On Monday, the dollar rose amid global recession fears and banking sector concerns, prompting investors to divert money out of gold and into U.S. Treasuries. A stronger dollar makes metals more expensive for holders of other currencies. Gold often rises when the dollar falls.
The world's largest gold-backed exchange traded fund (ETF) recorded its first decline since Jan. 8. Its holdings dipped 0.3 tonnes to 1,028.99 tonnes as of March 8.
Investors also favored oil at the expense of gold on Monday. Oil rallied 4 percent at above $47 per barrel. "A lot of people think gold is much too high compared to where crude is, so they are taking profit," Jossen said.
SOLID ETF DEMAND
Demand for gold from ETFs, which issue securities backed by physical stocks of gold, helped drive bullion higher earlier in the year. Traders said they expected these inflows to resume. "I think that there will be enough worrying news in the first half of 2009 for ETF demand to remain solid," said David Thurtell, an analyst at Citigroup. Holdings of Julius Baer's gold-backed exchange traded fund rose 109,000 ounces or 18 percent last week, the bank said in a weekly statement on Monday.
(Additional reporting by Paul Lauener and Pratima Desai; Editing by David Gregorio)
SPDR gold ETF records first outflow since early January
Julius Baer's gold ETF up 18 percent last week (Recasts, updates prices, market activity; adds second byline, dateline, previously LONDON)
By Frank Tang and Jan Harvey
http://www.guardian.co.uk/business/feedarticle/8394276
NEW YORK/LONDON, March 9 (Reuters) - Gold prices dropped more than 2 percent on Monday, as a dollar rise and slight drop of holdings of gold-backed exchange traded funds triggered heavy sell-stop orders.
Higher gold prices and global recession weighed down gold jewelry buying, which accounts for about 60 percent of total gold demand, traders said. "There is a big bull-and-bear disparity in gold. There is investment buying but no jewelry buying, which has dropped sharply," said Jonathan Jossen, a COMEX gold floor trader.
Spot gold fell to a low of $911.95 an ounce and was at $918.15 an ounce at 1:22 p.m. EDT (1722 GMT), down 2.3 percent from its last quote $939.60 in New York late Friday.
Gold for April delivery settled down $24.70, or 2.6 percent, at $918.00 an ounce on the COMEX division of the New York Mercantile Exchange. Demand for gold from jewelry buyers in traditionally strong markets remained weak.
On Monday, the dollar rose amid global recession fears and banking sector concerns, prompting investors to divert money out of gold and into U.S. Treasuries. A stronger dollar makes metals more expensive for holders of other currencies. Gold often rises when the dollar falls.
The world's largest gold-backed exchange traded fund (ETF) recorded its first decline since Jan. 8. Its holdings dipped 0.3 tonnes to 1,028.99 tonnes as of March 8.
Investors also favored oil at the expense of gold on Monday. Oil rallied 4 percent at above $47 per barrel. "A lot of people think gold is much too high compared to where crude is, so they are taking profit," Jossen said.
SOLID ETF DEMAND
Demand for gold from ETFs, which issue securities backed by physical stocks of gold, helped drive bullion higher earlier in the year. Traders said they expected these inflows to resume. "I think that there will be enough worrying news in the first half of 2009 for ETF demand to remain solid," said David Thurtell, an analyst at Citigroup. Holdings of Julius Baer's gold-backed exchange traded fund rose 109,000 ounces or 18 percent last week, the bank said in a weekly statement on Monday.
(Additional reporting by Paul Lauener and Pratima Desai; Editing by David Gregorio)
Friday, March 6, 2009
Bear Hug for Gold?
http://www.minyanville.com/articles/gold-rally-GLD-market-etf-statistics/index/a/21496/from/yahoo
Lance Lewis Mar 06, 2009 2:50 pm
I’ve read some things written by gold bears of late, calling for gold to decline in March due to “seasonal tendencies."
As always with statistics, if one doesn’t know why a particular statistical pattern occurs (as with the “Super Bowl Indicator” for example), one can make incorrect assumptions about future behavior.
In gold’s case, it’s typical seasonality tends to see gold rally in the fall, and then peak in the early spring. But the reason that we typically see this pattern, is due to the seasonality of gold demand coming from the largest gold jewelry consumer on the planet, whose various festivals revolve around gold: India.
However, as I’ve pointed out before, jewelry demand is not what is currently driving the gold price. Indian gold imports in February were virtually 0. Meanwhile, gold rallied $100 during February to $1000 and an 11-month high. As always occurs during a big bull market in gold, investment demand is the primary driver of the gold market, and it displaces jewelry demand. And investment demand is obviously not seasonal.
Lance Lewis Mar 06, 2009 2:50 pm
I’ve read some things written by gold bears of late, calling for gold to decline in March due to “seasonal tendencies."
As always with statistics, if one doesn’t know why a particular statistical pattern occurs (as with the “Super Bowl Indicator” for example), one can make incorrect assumptions about future behavior.
In gold’s case, it’s typical seasonality tends to see gold rally in the fall, and then peak in the early spring. But the reason that we typically see this pattern, is due to the seasonality of gold demand coming from the largest gold jewelry consumer on the planet, whose various festivals revolve around gold: India.
However, as I’ve pointed out before, jewelry demand is not what is currently driving the gold price. Indian gold imports in February were virtually 0. Meanwhile, gold rallied $100 during February to $1000 and an 11-month high. As always occurs during a big bull market in gold, investment demand is the primary driver of the gold market, and it displaces jewelry demand. And investment demand is obviously not seasonal.
Wednesday, March 4, 2009
Gold Pullback Doesn't Inflict Meaningful Technical Damage
Tue, Mar 3 2009, 05:23 GMT
by Mike Paulenoff
MPTrader.com
No, the gold and SPDR Gold Trust ETF (NYSE: GLD) markets have not provided much in any sort of hedge in the past week or so. However, looked at from a relative strength perspective, the enclosed chart pattern of the GLD clearly remains the inverse of the major equity market ETFs. Let's notice that the GLD has pulled back about 7% from its Feb 20th high, but has not inflicted any damage to the underlying chart structure. In fact, the GLD has pulled back to its mid-Feb upside break point, in the vicinity of 90.00-91.00, which thus far has contained the selling pressure. From a near-term perspective, the GLD will have to press and sustain beneath 87.50 to begin to inflict meaningful damage to the enclosed uptrend (channel) pattern. Although my near-term work leaves open a press into the 90.00 area from here, my intermediate-term pattern work indicates that thereafter the GLD should embark on another upleg that hurdles 98.99 on the way to new highs above 100.44.
http://www.fxstreet.com/technical/market-view/the-midday-minute/2009-03-03.html
by Mike Paulenoff
MPTrader.com
No, the gold and SPDR Gold Trust ETF (NYSE: GLD) markets have not provided much in any sort of hedge in the past week or so. However, looked at from a relative strength perspective, the enclosed chart pattern of the GLD clearly remains the inverse of the major equity market ETFs. Let's notice that the GLD has pulled back about 7% from its Feb 20th high, but has not inflicted any damage to the underlying chart structure. In fact, the GLD has pulled back to its mid-Feb upside break point, in the vicinity of 90.00-91.00, which thus far has contained the selling pressure. From a near-term perspective, the GLD will have to press and sustain beneath 87.50 to begin to inflict meaningful damage to the enclosed uptrend (channel) pattern. Although my near-term work leaves open a press into the 90.00 area from here, my intermediate-term pattern work indicates that thereafter the GLD should embark on another upleg that hurdles 98.99 on the way to new highs above 100.44.
http://www.fxstreet.com/technical/market-view/the-midday-minute/2009-03-03.html
Tuesday, March 3, 2009
Fool’s Gold
http://247wallst.com/2009/03/02/fools-gold/
Posted: March 2, 2009 at 6:15 am
Gold has traditionally served as a safe haven for investors in times of economic turmoil or as a store of value during inflationary periods. The Economist recently argued that now is the time to invest in gold. The basic argument is that gold will perform well regardless of how well monetary policy achieves its goal of turning the economy around.
If slashing interest rates has the desired effect, the U.S. economy will likely enter into an inflationary period. This should spur a rally in gold as investors seek a hedge against the effects of inflation. If low interest rates fail to turn the economy around, gold should continue to benefit from the fear-driven buying that has driven it to its current level of around $950 an ounce.
The effect of economic deterioration on gold is evident in the way that it has traded since the first of the year. The average monthly trading volume for SPDR Gold Trust (GLD) is up over 200% since the beginning of the year. Its safe to say that if gloomy economic news continues to emerge gold prices will at least hold up.
However, the argument that increased inflation will be similarly bullish for gold is off the mark. A good deal of the upward pressure on gold prices has been speculative trading. If low interest rates are successful they will bring back more than inflation.
Barring a Carter-era anomaly, inflation will be a function of a recovering economy. When the economy reaches this point speculators will be looking for opportunities in assets that did not experience a run-up while the recession was still in progress. Economic recovery may pose the greatest risk to gold investors.
Posted: March 2, 2009 at 6:15 am
Gold has traditionally served as a safe haven for investors in times of economic turmoil or as a store of value during inflationary periods. The Economist recently argued that now is the time to invest in gold. The basic argument is that gold will perform well regardless of how well monetary policy achieves its goal of turning the economy around.
If slashing interest rates has the desired effect, the U.S. economy will likely enter into an inflationary period. This should spur a rally in gold as investors seek a hedge against the effects of inflation. If low interest rates fail to turn the economy around, gold should continue to benefit from the fear-driven buying that has driven it to its current level of around $950 an ounce.
The effect of economic deterioration on gold is evident in the way that it has traded since the first of the year. The average monthly trading volume for SPDR Gold Trust (GLD) is up over 200% since the beginning of the year. Its safe to say that if gloomy economic news continues to emerge gold prices will at least hold up.
However, the argument that increased inflation will be similarly bullish for gold is off the mark. A good deal of the upward pressure on gold prices has been speculative trading. If low interest rates are successful they will bring back more than inflation.
Barring a Carter-era anomaly, inflation will be a function of a recovering economy. When the economy reaches this point speculators will be looking for opportunities in assets that did not experience a run-up while the recession was still in progress. Economic recovery may pose the greatest risk to gold investors.
Monday, March 2, 2009
Still Looking for Gold Bottom
Posted by Ryno On March - 2 - 2009 10:02 pm
http://www.pick24.com/wp/?p=731
Yesterday, I posed the question of whether or not gold had hit a temporary bottom and was positioned to move back up. Well, it definitely wasn’t ready to move back up today. GLD is still in a free fall with fewer and few buyers coming to the table.
My GLD pullback target is now $87 - $88ish
http://www.pick24.com/wp/?p=731
Yesterday, I posed the question of whether or not gold had hit a temporary bottom and was positioned to move back up. Well, it definitely wasn’t ready to move back up today. GLD is still in a free fall with fewer and few buyers coming to the table.
My GLD pullback target is now $87 - $88ish
Thursday, February 26, 2009
Gold - Haring away
Feb 26th 2009
From The Economist print edition
Burnished by bad news, gold looks like a good each-way bet
http://www.economist.com/finance/displaystory.cfm?story_id=13185396
IT IS 1979 and Harry “Rabbit” Angstrom, the hero of John Updike’s series of novels, is explaining to his wife why he has just spent more than $11,000 on 30 gold krugerrands. “The beauty of gold is, it loves bad news,” he says. Three decades later, gold is once again thriving on despair. Before Christmas, a troy ounce could be bought for around $800. By the third week in February, gold was trading at close to $1,000 an ounce.
A surge in demand for gold as an investment lies behind the jump in prices. Flows into exchange-traded funds, which buy and store gold for their shareholders, rose from 105 tonnes in January to 208 tonnes in the first three weeks of February, according to Suki Cooper at Barclays Capital. At that rate, inflows will soon surpass the total of 322 tonnes for the whole of 2008. Buying by investors has more than made up for a slump in gold-jewellery purchases in key markets, such as India and Turkey, where higher prices and wilting exchange rates have crushed demand.
How high might the gold price go? Gold bugs talk excitedly about it reaching $2,300, which would match the January 1980 peak in real terms (see chart). Already the gold price is above its average since 1972 when calculated in today’s money. There is a limited supply of gold and lots of potential buyers—ideal conditions for a bubble, says Stephen Jen at Morgan Stanley. If gold is burnished by grim news, it seems likely to become still more alluring.
From The Economist print edition
Burnished by bad news, gold looks like a good each-way bet
http://www.economist.com/finance/displaystory.cfm?story_id=13185396
IT IS 1979 and Harry “Rabbit” Angstrom, the hero of John Updike’s series of novels, is explaining to his wife why he has just spent more than $11,000 on 30 gold krugerrands. “The beauty of gold is, it loves bad news,” he says. Three decades later, gold is once again thriving on despair. Before Christmas, a troy ounce could be bought for around $800. By the third week in February, gold was trading at close to $1,000 an ounce.
A surge in demand for gold as an investment lies behind the jump in prices. Flows into exchange-traded funds, which buy and store gold for their shareholders, rose from 105 tonnes in January to 208 tonnes in the first three weeks of February, according to Suki Cooper at Barclays Capital. At that rate, inflows will soon surpass the total of 322 tonnes for the whole of 2008. Buying by investors has more than made up for a slump in gold-jewellery purchases in key markets, such as India and Turkey, where higher prices and wilting exchange rates have crushed demand.
How high might the gold price go? Gold bugs talk excitedly about it reaching $2,300, which would match the January 1980 peak in real terms (see chart). Already the gold price is above its average since 1972 when calculated in today’s money. There is a limited supply of gold and lots of potential buyers—ideal conditions for a bubble, says Stephen Jen at Morgan Stanley. If gold is burnished by grim news, it seems likely to become still more alluring.
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