Gold off 4-1/2 month low, tracks euro

SINGAPORE, May 17 (Reuters) - Gold rose half a percent on
Thursday as bargain hunters resurfaced after prices tumbled to
another 4-1/2 month low in the previous season, but gains could
be limited by fears of a deepening debt crisis in Greece, even
as the euro rebounded.	

    Bullion has this year been moving in tandem with assets that
are perceived to be risky, shedding its status as a safe haven
in times of economic instability.  	
   	

    FUNDAMENTALS	

    * Spot gold added $7.64 an ounce to $1,545.94    	
an ounce by 0046 GMT after falling as low as $1,527 on
Wednesday, its weakest since Dec. 29.	

    * U.S. gold futures for June delivery rose $9.30 an
ounce to $1,545.90.	

    * The European Central Bank has stopped providing liquidity
to some Greek banks as they have not been successfully
recapitalised, the ECB said on Wednesday, confirming earlier
exclusive reports by Reuters. 	

    * Indian gold futures hit their lowest level in six weeks,
extending losses for the third straight session on Wednesday,
attracting bargain hunting by physical traders, though the rupee
hitting a record low capped the downside. 	

     
    	
    MARKET NEWS	

    * Shares steadied in Asia on Thursday, but investors found
no reason to bet on risk amid deepening turmoil in Greece and
fears of contagion to other stressed euro zone economies. The
euro was steady around $1.2730, off a four-month low of
$1.26811 reached on Wednesday. [MKTS/GLOB[  	

     * U.S. crude prices steadied near $92 a barrel on Thursday
as concerns over a Greek exit from the euro zone offset support
from U.S. government data showing a smaller rise in crude stocks
than an industry report earlier this week. 	
         	

    DATA/EVENTS (GMT) 	

    0430 Japan Industrial output rev Mar 

    0700 Spain Q1 GDP 

    1230 U.S. Jobless claims Weekly 

    1230 U.S. Treasury Secretary Geithner speaks 

    1400 U.S. Leading indicators April 

    1400 U.S. Philadelphia Fed business activity index 


  

  

  

Closing Gold & Silver Market Report – 5/16/2012

Gold Has Plenty of Room Below December Low

Weekly Bars

Prepared by Jamie Saettele, CMT

Gold has broken below a major trendline (and channel) that extends off of lows in 2008, 2010, and 2011. Focus is now on the December low at 1522.50 and then support from May 2011 and resistance from December 2010 at 1430/60. Look lower against the Monday high of 1586.

LEVELS: 1612  1586  1522.50 1477 1462 1448 1431

Gold falls as Greece batters global markets

* Gold eases as dollar profits from Greek worries

* Silver set for longest string of declines since 2008

* Coming up: U.S. April industrial production 1315 GMT

By  Amanda Cooper

LONDON, May 16 (Reuters) - Gold fell for a fourth straight day to its lowest since late December on Wednesday, sucked into a broad-based sell-off that dented global markets on the back of alarm over political turmoil in  Greece.

Gold dropped along with other more industrial commodities such as copper and crude oil, under pressure from the rise of the dollar, which put silver on track for its longest stretch of consecutive daily losses in nearly four years.

Fears a Greek exit from the  euro zone  would worsen the European debt crisis gripped financial markets on Wednesday, sending shares and other riskier assets lower as investors shifted funds into safe havens like the U.S. dollar.

The euro touched four-month lows against the dollar, Spanish and Italian bond yields soared, while European equities hit their lowest level for the year.

Spot gold fell 0.3 percent to $1,538.81 an ounce by 1200 GMT, having dropped by nearly 4.0 percent in the last four days. The price was set for its longest stretch of consecutive losses in nearly five months.

" It's difficult to see a turnaround just yet. There will be one, but I don't think this is the time, just when we are in the eye of the storm," Societe Generale analyst Robin Bhar said.

" Clearly, with people staring into the abyss, it could (fall) $50 or even $100 lower as it washes out. That is the unpredictability of it all and as equities fall, as the Greeks take money out of the banks and the banking sector collapses, I suppose you'd have to be wary of further price falls just to cover for losses in other markets," he said.

Gold tends to trade inversely to the dollar, so that strength in the U.S. unit encourages non-U.S. investors to sell their gold in exchange for greater profits in their own  currencies.

Undermining investor sentiment, Greece's president spoke of " fear that could develop into panic" at the country's banks in the weeks before fresh elections that could precipitate Athens' exit from the euro zone, while evidence emerged of locals pulling their euro funds out of banks for fear of their country's exit from the currency bloc.

BIG BULLS HOLD

In a small positive for gold, billionaire fund manager John Paulson held on to his stake in the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, in the first quarter of this year, according to a regulatory filing by his company released on Tuesday.

The prospect of improvement in physical demand for gold from the Indian jewellery sector took a knock on Wednesday with the drop in the rupee to a record low against the dollar, driven by the widespread risk aversion rattling global markets.

Buying in India, the world's largest bullion consumer, has emerged with the decline in the dollar-denominated gold price to 4-1/2 month lows this week, but local dealers have said the weakness in the rupee could curb this.

" Definitely physical buying has gone up, although demand is not overwhelming.  Indonesia  has slowed down because there's a public holiday tomorrow, while Thailand is buying," said a dealer in Singapore.

" India did buy gold last night. They are not really in the market yet today, but I am sure they will be buying."

The wedding season is underway in India and will taper off by the end of the month. Gold jewellery is an essential part of the dowry Indian parents give to their daughters at weddings.

In other precious metals, silver was down nearly 0.9 percent on the day at $27.45 an ounce, having fallen for eight days in a row, its longest losing streak since a 10-day decline that began in late August 2008, just before the global financial crisis claimed some of Wall Street's biggest banks.

Silver has lost nearly 11.5 percent in this time, compared with a 6-percent decline in the gold price over the same number of days.

This has left the gold/silver ratio -- the number of ounces of silver needed to buy one ounce of gold -- at 56.07, its highest since the start of the year. The higher the ratio, the greater the outperformance of gold relative to silver. 

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Gold hits 4-1/2 mo low, Greece heads for elections

* Prices slip again in late New York trade with euro

* Euro, gold fall as  Greece  fails to form coalition government

* Platinum Week enters second day in London 

By  Carole Vaporean  and Jan Harvey

NEW YORK/LONDON, May 15 (Reuters) - Gold slipped to a fresh 4-1/2 month low on Tuesday as the euro continued to lose ground to the dollar after Greece's failure to form a coalition government heightened concerns over Europe's financial crisis and led investors to spurn risky assets.

After six rounds of fruitless wrangling, Greece abandoned efforts to form a government and called a new election that some investors fear may hand victory to the leftists, undo the country's financial bailout package, and push it closer to bankruptcy and out of the  euro zone.

In response, gold slipped with the euro, which tumbled to new four-month lows in late New York trade. The euro had fallen in five of the last six sessions on worries over Greece's June election prospects, dragging gold down with it.

Spot gold was off 0.88 percent at $1,542.60 an ounce by 3:30 EDT (1930 GMT). U.S. gold  futures  for June delivery were down $18.60 at $1,542.50 an ounce.

Gold hit its lowest level since Dec. 29 at $1,541.10 an ounce and is down nearly 7 percent so far in May, on track for its worst monthly performance since December, as talk that Greece could exit the euro zone has spooked investors.

" The euro has done very poorly against the dollar because of everything going on predominantly in Greece. Gold has gotten sold off quite hard in the last couple of sessions. I think people are unwinding and getting into cash and a little bit of Treasuries, German bunds, and that's about it," said Fred Schoenstein, metals trader at Heraeus in New York.

With the precious metal declining to its lowest point since late December, consumers in top purchasing nations such as India have come into the market, which analysts said could protect the bullion price from a more protracted decline.

Some participants view current levels or slightly below as buying opportunities for the precious metal, which they say will at some point turn up again.

" Gold's negative on the year, but in the long term, will it go up? Probably. But, at this point it's just trend following," said Schoenstein.

Analysts said any bounce in the euro could run out of steam above $1.2880-$1.2900, with peripheral bond yields still at elevated levels, highlighting the risk of contagion from the Greek deadlock spreading to other euro zone countries.

" (Gold's) safe haven status has been tarnished," Richcomm Global Services senior analyst Pradeep Unni said. " It will wobble on the euro's weakness, but in a very short term, bargain hunting and pent-up demand will emerge taking it higher."

ASIAN BUYERS STEP IN

Despite gold's tendency to decline in line with the euro, physical demand among major Asian consumers also worked in gold's favour, traders reported, with buyers stepping in to take advantage of its slide below $1,550 an ounce.

" Jewellers have been buying a lot. At the moment supply is a bit tight for immediate delivery," said a physical dealer in Singapore. " Refiners can't deliver immediate gold because there's a sudden surge in demand. We're seeing demand from India, Thailand and  Indonesia."

Nonetheless, dealers in major consumer India say more losses are expected in the precious metal as the rupee strengthens, making dollar-priced bullion more expensive for local buyers.

Holdings of gold-backed exchange-traded funds monitored by Reuters, which issue securities backed by the physical metal, fell by nearly 100,000 ounces on Monday, data from the funds showed.

Among other precious metals, silver dropped to $27.67 an ounce from $28.12 per ounce on Monday, in line with gold's losses. It fell earlier to $27.56, its lowest since Dec. 30.

Platinum group metals outperformed as the annual Platinum Group meeting of miners, refiners, traders, recyclers and consumers in London continued into a second day.

Platinum was off 0.4 percent at $1,428.99 an ounce, while palladium rose 0.6 percent to $590.53 an ounce.

A report by Johnson Matthey on Monday showed both platinum and palladium markets in surplus last year. However, palladium is expected to swing back into deficit next year, on selling of physical metal by investors and as sales from Russian state stocks dry up.

(Additional reporting by  Amanda Cooper  in London and Lewa Pardomuan in Singapore Editing by  Jason Neely, Alison Birrane and Jim Marshall)

Closing Gold & Silver Market Report – 5/15/2012

 
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Gold Kisses Channel Goodbye

Weekly Bars

Prepared by Jamie Saettele, CMT

Gold has broken below a major trendline (and channel) that extends off of lows in 2008, 2010, and 2011. Focus is now on the December low at 1522.50 and then support from May 2011 and resistance from December 2010 at 1430/60. Look lower against the Monday high of 1586.

LEVELS: 1612  1586  1522.50 1477 1462 1448 1431

Closing Gold & Silver Market Report 5/14/2012

Buy Gold Below $3000? ‘You Can’t Lose’

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