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China should increase gold reserves: J P Morgan
BEIJING (Commodity Online): China has immense potential to increase the country's gold reserves because of the surging demand for the yellow metal from investors, says global investment bank J P Morgan.J P Morgan China managing director Jin Ulrich, told Reuters, that it is not the end of the gold rally. Gold is seen as an alternative to paper currencies, she said. Increasing political uncertainties and rising prices would keep gold as a hedge.
" I don't think this is the end of the gold rally," Ulrich said. " Gold is seen as an alternative to paper currencies."
Ulrich said there is strong demand for gold from investors in China and that China has room to increase its gold reserves.
The remarks are interesting as shows that JP Morgan China is bullish on gold. JP Morgan have recently opened vaults for gold storage in Singapore.
Meanwhile JP Morgan retain a concentrated short position in gold on the COMEX which is being investigated by the CFTC. This is a curious dichotomy and an explanation by JP Morgan’s Head of Commodities, Blythe Masters, would be interesting. Is JP Morgan long gold in China and Asia and short on the COMEX and to what purpose? This could be some form of hedging strategy or a way to accumulate bullion on the cheap in Asia.
Meanwhile, according to a report from goldcore.com, gold and silver have consolidated after yesterday’s gains although gains have been made in the Japanese yen which has fallen due to a growing realization that the nuclear disaster is far from over and will pose massive challenges to the Japanese economy and challenges to the global economy.
Gold at $1435/oz is less than 1% from its record nominal dollar high at $1447.82/oz. Gold for immediate delivery rose to 121,287.1 Japanese yen an ounce, the highest price since Feb. 1, 1983 (see chart above). Technically and fundamentally the yen looks very vulnerable and the record nominal high from February 1980 of over 160,301 yen is the next level of resistance.
With oil at new record highs in sterling and euro terms and corn and other commodities rising to record highs or close to record highs, investors are becoming increasingly wary of inflation and are buying the precious metals to hedge inflation risk.
The euro looks set to come under pressure again as the peripheral bond markets remain under real pressure and Portugal looks certain to be the next country to have to accept a “bail out”. Indeed, there is increasing speculation that certain member nations may leave the monetary union.
Sprott Asset Management Chairman Eric Sprott said yesterday that investment demand for silver has been enormously underestimated even as much more gold is available for sale than silver is.
Many dealers including ourselves are seeing large flows into silver and there is definitely a growing interest and a level of interest which is usually reserved for gold. Premiums are beginning to edge up again and there are reports of some dealers being unable to source enough silver coins and bars to satisfy demand.
Given the small size of the silver bullion market vis-à-vis the gold market, this level of demand is likely to lead to markedly higher prices and the psychological level of $40/oz is the next level of resistance.
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Gold Outlook Remains Bullish on MeNa Tensions, Inflation Concerns
Fundamental Forecast for Gold: Bullish
Gold was little changed for the third consecutive week, dropping 0.1 percent to $1428.73, and was unable to make a move through $1440.00 this week, after setting an all-time high last week.While it appeared that investors were ready to continue to bid up the precious metal, a stronger Greenback on the week pushed down the price of bullion in the early part of the week as the U.S. Dollar gained the most against the Yen this week in over a year. News out of the Middle East and North Africa region was relatively quieter this past week than it had been in weeks past, though with reports out of Europe that the European Union could commit ground troops to fight in Libya, gold could see significant price action to the upside as investors flee to precious metals as a safe haven during a time of war. As noted last week, a “dip below $1420 looks unlikely,” and bullion ended the week little moved from where it started.
The week ahead, fundamentally, couldcontinue to propelthe precious metal higher, as contagion spreads further to Syria, Yemen, and Israel. Clashes in Libya continue, with it becoming increasingly likely that the international community becomes directly involved with the civil war, in the form of ground troops and not just air support for Libyan rebels.As I noted two weeks ago, “any further tensions will almost certainly validate military occupation by a coalition of Western governments, which would send the price of gold even higher” the continued involvement, as mentioned earlier, has prompted the European Union to begin outlining the capacity for ground troops in Libya.
With central bank decisions on the docket this week, there is a strong case to be made for gold strength in the coming days. While the Bank of England is widely expected to hold rates at their current level, as well as maintain their asset purchase program, the European Central Bank is forecasted to raise their key interest rate by 25-bps, citing a strong recovery and rising inflationary pressures. If in fact the ECB does raise rates due to inflationary concerns, bullion, and other precious metals, could see a boost on the long-held belief that commodities are not only a good way to hedge against inflation, but also to trade with inflation.
On a technical basis, bullioncontinues to hold above its20-SMA, and remains in the upper-half of its ascending channel that has been in place since the start of the year. The RSI on the daily chart continues to moderate, albeit at an increasingly lower rate, suggesting one of two things for gold: the prices are normalizing at the current rate, the move is corrective, and thus can be expected to move higher as a significant level of support is forming following the correction or the precious metal is going to weaken further before potentially climbing once again. The rate of change at which gold is accelerating has also slowed, having depreciated this past week. The Slow Stochastic oscillator has turned to the upside, however, with the %K just higher than the %D now, at 70 and 65, respectively. To this end, the MACD Histogram is tailing off of its bearish divergence the differential is decreasing, at -11, having come down from -17 earlier this week. As previously noted, “abreak above the all-time high of $1447.88 could lead to a test of the range top at $1460.” -CV
/dailyFX
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SINGAPORE, April 5 (Reuters) - Silver jumped to its highest since early 1980 on Tuesday on inflation concerns and a rise in ETF holdings to another record, while gold edged down as the euro held below this week's five-month high versus the dollar.
FUNDAMENTALS
* Spot silver rose as high as $38.72 an ounce and was quoted at $38.68 an ounce by 0046 GMT, up 26 cents. Gold eased 45 cents to $1,436.10 an ounce.
* U.S. gold futures for June rose $4.5 an ounce to $1,437.5 an ounce.
* IShares Silver Trust said its holdings rose to another record at 11,162.45 tonnes by April 4 from 11,139.52 tonnes on March 24.
* Analysts remain wary of silver's extreme volatility, which has led to some heart-stopping reversals in recent years. When commodities sold off heavily in mid-March, silver dropped nearly 5 percent in a single day, versus gold's 2 percent fall.
MARKET NEWS
* The euro held below this week's five-month high against the dollar and 11-month peak versus the yen on Tuesday as investors paused to assess how much it can make in fresh gains given that expectations for interest rate rises have largely been priced in.
* Japan's Nikkei nudged higher on Tuesday, but was set to trade in a tight range for a third day, as the post-quake rebound looks to have run its course, with resource-related shares climbing on surging commodity prices.
* Oil prices rose to their highest since 2008 on Monday, with Brent surging above $121 a barrel as Nigerian election delays and a short-lived strike in Gabon joined a list of geopolitical supply concerns.
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Closing Gold & Silver Market Report – 4/4/2011
By Stephanie ChandlerApril 4, 2011SILVER CLOSES OVER $38 AN OUNCE. Both gold and silver saw gains Monday but silver broke the $38 point, settling well above its previous 31 year high. Jeffery Christian, managing director of commodities consulting firm CPM Group in New York said, “More investors came to the market in hopes of $40 an ounce in the short term.” Gold had a more level performance, gaining at a modest pace. Many buyers seemed to buy on the dips, keeping the price up.
More than anything this week, inflation fears are supporting the prices of precious metals. Bruce Dunn, vice president of precious metals dealer Auramet Trading said, “There is no question that the inflation factor is supporting gold, both gold and silver are benefiting from speculative buying and good demand from physical bars and coins.” Speculative trading of silver as it nears $40 an ounce will be something to watch. Additionally, there is some speculation that industrial demand for silver is set to increase and if so, increased demand could continue to sustain the price. Regardless, both gold and silver have started off positively and, “have possibly set the tone for the week, with both metals again rising on safe-haven and inflation hedging after [West Texas Intermediate crude oil recently] touched a fresh 2½-year peak,” said analysts at TheBullionDesk, in a note to clients.
At 4PM (CT) the APMEX precious metal prices were:
- Gold price -$1,434.90 (up $6.00)
- Silver price - $$38.67 (up 87 cents)
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Morning Gold & Silver Market Report – 4/4/2011
By Peter LaTonaApril 4, 2011OIL SURGES PAST $108 SILVER SOARS PAST $38 – Oil prices are on the move as unrest in the Middle East and North Africa continue to concern the markets. Rising oil prices also fan the fears of inflation, which may be why gold and silver are moving up in early morning trading. We should remember not to focus solely on Libya the entire situation is still volatile and unresolved. In the end, we do not know what we will have once the new regimes have taken their seats at the table.
There will be much attention this week on the posturing between Democrats and Republicans on the 2012 budget, that if not resolved by Friday, could shut the government down. The GOP came out with their plan to cut $4 trillion dollars. There is much debate as to the actual chance of a government shut down and I see strong arguments for both sides of that fence. It would appear to me this is still very much up in the air.
The ECB will announce later this week whether they are going to raise interest rates. It is expected that they will go up 25 basis points as a means to fight off inflation. Investors worldwide will be watching for this decision and its potential impact on global markets and currencies.
At 8AM (CT) the APMEX precious metal prices were:
- Gold price - $1,436.90 (up $8.00)
- Silver price - $38.37 (up 77 cents)
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SINGAPORE (Commodity Online) : Gold recovered in Asian trade Monday as the dollar weakened while continuing geo-political tensions in the Middle East helped the yellow metal.
Gold for immediate delivery was seen trading at $1429.64 an ounce at 1.30 p.m singapore time while Gold for May was seen trading at $1431.04 an ounce on the comex division of Nymex.
Spot silver rose as high as $38.09, just a few cents off a 31-year peak at $38.13. Silver has been the best performer in the precious metals complex, up 23 percent so far this year.
Analysts also attributed gold’s gains to higher oil prices and expectations of a European Central Bank rate hike lent support.
The euro hit fresh 11-month highs against a broadly weaker yen early in Asia on Monday and held firm against the dollar with markets all but certain the European Central Bank will raise interest rates this week.
Rate hikes usually dampen sentiment in gold, seen as an inflation hedge. But in the long run, rising inflation benefits gold.
Gold hit a record high at $1,447.40 on March 24. Speculators in gold futures and options raised their net long positions as prices rose to fresh records, data from the U.S. Commodity Futures Trading Commission showed.
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(Reuters) - Gold prices edged above $1,430 an ounce in Europe on Monday as the weaker dollar and rising oil prices lent support, but gains were capped by sharper appetite for risk after last week's well-received U.S. payrolls numbers.
For latest market report, see [GOL/]
PRICES * Spot gold XAU= was at $1,430.70 an ounce at 0630 GMT compared with $1,427.98 late in New York on Friday.
* Silver XAG= was at $38.07 from $37.74.
* Platinum XPT= at $1,765.74 from $1,765.
* Palladium XPD= at $774.97 from $769.95.
DATA/EVENTS
* Euro zone sentix index for April, 08030 GMT.
* Euro zone producer prices for February, 0900 GMT.
* U.S. employment trend index for March, 1400 GMT.
* U.S. Federal Reserve Chairman Ben Bernanke speaks before the Federal Reserve Bank of Atlanta 2011 Financial Markets Conference, 2315 GMT.
* U.S. Fed Bank of Chicago President Charles Evans discusses economic conditions and monetary policy issues in live interview on CNBC's Closing Bell, 1915 GMT.
* ECB expected to raise interest rates this week
* Gold to revisit all-time high - technicals
* Coming up: Euro zone producer prices, Feb 0900 GMT
By Rujun Shen
SINGAPORE, April 4 (Reuters) - Spot gold edged up on Monday, as higher oil prices amid the ongoing Middle East crisis and a firm euro on expectations of a European Central Bank rate hike lent support.
Upbeat U.S. employment data last Friday, indicating that the global economy was likely on a firm footing, shaved some lustre off gold's demand, but the ongoing Middle East crisis continued to support the precious metal's safe-haven appeal.
" We saw the continuous geopolitical risk in the Middle East crisis, and oil prices going higher. It certainly looks to me that gold has been tracking both oil and euro quite closely in past few days," said Darren Heathcote, head of trading at Investec Australia.
The euro hit fresh 11-month highs against a broadly weaker yen early in Asia on Monday and held firm against the dollar with markets all but certain the European Central Bank will raise interest rates this week.
Rate hikes usually dampen sentiment in gold, seen as an inflation hedge. But in the long run, rising inflation benefits gold.
" A great deal of expectations dictate that the ECB will raise interest rates very soon, and probably will continue to raise rates for the rest of the year. A lot of that you may consider already priced in," said Heathcote.
Spot gold inched up 0.1 percent to $1,429.61 an ounce by 0220 GMT, after ending the first quarter up 0.7 percent.
U.S. gold GCv1 gained 0.2 percent to $1,431.
Spot gold is still biased to rise to $1,447.40 per ounce even after a sharp retracement to $1,412.55 on Friday, said Reuters market analyst Wang Tao.
The ongoing turmoil in the Middle East buoyed oil prices, pushing U.S. crude prices to a 2-1/2 year peak.
" Gold is still holding its ground and will probably be range-bound," said a Singapore-based dealer, adding that gold is expected to trade in a range $1,410 and $1,445.
Gold hit a record high at $1,447.40 on March 24.
Speculators in gold futures and options raised their net long positions as prices rose to fresh records, data from the U.S. Commodity Futures Trading Commission showed.
Spot silver rose as high as $38.09, just a few cents off a 31-year peak at $38.13. Silver has been the best performer in the precious metals complex, up 23 percent so far this year.
Speculative long positions in U.S. gold futures and options rose on high prices, while slipped in silver, according to the U.S. Commodity Futures Trading Commission.
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Gold makes a patient wait for US indicators for its next direction
By Shyamal Mehta
MUMBAI (Commodity Online): Gold prices traded strong in international market during Asian session. Gold rebounded a despite weak physical market and rose by approximately 0.75 percent on speculative buying yesterday.
Gold in international markets last traded at 1435 USD an ounce after it made a recent high near 1440 USD an ounce. Next few days could see Gold touching 1390-1360 levels.
Gold traders and investors are waiting for US Unemployment, Manufacturing PMI, Construction Spending and Vehicle Sales for the next move. Gold may also find its direction from the movement of Crude prices also because Gold and Crude prices generally move in tandem. Traditionally, Gold is considered as a hedge against inflation.
Crude last traded at 104.65 USD per barrel up by approximately 0.2 percent. Crude is likely to fall further on profit booking and could touch 100-97 levels within next few trading days. Crude prices are seen falling further because of reduced energy demand of the world.
Moreover, technically also, it is expected some pull back because of profit booking. Silver prices has tested levels above $38 per ounce and hovering around the same level. Silver in international markets last traded at $37.69 per ounce. Silver prices have made a multi year high near 38.15 USD an ounce.
Silver prices are likely to top somewhere around $40 per ounce in the near future and then it may fall on the back of profit booking and could touch 36-33 USD an ounce.
Gold may find supports at 1390, 1361 and 1335. While, resistance levels are 1445 and 1465. Silver prices are trading in overbought territory at present and due for correction.
However, long term Bull Run of Gold is still intact and any negative news on Middle East crisis may be supportive for Gold prices.
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Closing Gold & Silver Market Report – 4/1/2011
By Timothy OakesApril 1, 2011FED OFFICIAL WARNS OF OVER-OPTIMISM
Gold ended the first quarter on record highs and silver ended on its 31 year record, but both began April trading lower on perceived positive jobs news. If the job market is improving we may anticipate an end to the QE2 program and an interest rate hike later this year. However, William Dudley, president of the New York Federal Reserve Bank, is warning of over-optimism with the economy. Up until now, loose monetary policy and currency devaluation has driven the price of gold and silver up. We are still seeing an increase in demand which is causing an increase in prices because individuals are flocking to the safe haven appeal of precious metals.
It is common for investors to sell off precious metals after positive gains today’s dips could be part of the typical trend seen when there is positive news that bolsters the market. Another factor putting a damper on prices are the reports that Libyan rebels are calling for a cease-fire in the wake of U.S. withdrawing its warplanes. A Libyan official has said that Qaddafi’s regime is attempting to meet with the U.S, French, and other officials to put an end to the conflict.
The turbulent first quarter is over. As the geopolitical landscape begins to calm down and the U.S. economy tries to gain more stable ground, we still hear about issues coming from the euro zone. Gold, silver, and the other precious metals react to market forces but their value survives beyond the monetary policy decisions of any bank or government.
At 4:13PM (CT) the APMEX precious metals spot prices were:
- Gold – $1429.20 (down $10.70)
- Silver – $37.91 (down 5 cents)
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SINGAPORE, April 1 (Reuters) - Gold dropped on Friday before the release of U.S. non-farm payrolls report which could underpin the dollar and weigh on bullion, while ETF holdings posted their biggest quarterly decline ever.
Investors were cautious ahead of the data due at 1230 GMT, which should provide more clues on the health of the world's largest economy. Signs of improving business activity and rising inflation globally have led a number of central banks either to tighten policies or talk tough on inflation.
Spot gold fell $2.88 an ounce to $1,433.60 an ounce by 0618 GMT, having risen about half a percent on Thursday on inflation worries sparked by rallies in oil and grain prices, notching a 10th straight quarterly gain.
" I am still positive about gold, but I think it will take time to consolidate. But there's not much going on, especially on the physical side and we are also waiting for the non-farm figure tonight," said Dick Poon, manager of precious metals at Heraeus in Hong Kong.
" The premiums are also stable at 90 cents to $1," said Poon, referring to premiums for gold bars.
Gold struck a lifetime high at $1,447.40 last week, when a falling dollar, violence in the Middle East and North Africa, as well as renewed concerns over debt crisis in Europe spurred investors to buy.
In Singapore, a centre for bullion trading in Southeast Asia, premiums for gold bars were also steady at 90 cents to the spot London prices. Dealers noted early buying from Indonesia but main consumer India was on the sidelines.
The high-demand season is underway in India, where jewellery is the most common gift during religious events and weddings.
BULLISH TARGET INTACT
A bullish target at $1,447.40 per ounce was unchanged for spot gold , based on its wave pattern and a triple-bottom pattern, according to Reuters market analyst Wang Tao.
U.S. gold futures for April dropped $4.4 to $1,434.5 an ounce.
The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust , posted in the first three months of 2011 its biggest quarterly drop since inception in November 2004 as the prospect of interest rate hikes and gains in other commodities, such as oil, drove investors to sell.
The dollar steadied against the euro and particularly against commodity currencies after Minneapolis Federal Reserve President Narayana Kocherlakota said rates should rise by up to 75 basis points by year-end if core inflation and economic growth picked up as he expected.
A stronger-than-expected payrolls data later in the day could add more weight to recent hawkish comments from Fed officials.
U.S. nonfarm payrolls are expected to have increased a solid 190,000 after rising 192,000 in February, according to a Reuters survey, with the unemployment rate seen holding steady at a near two-year low of 8.9 percent. [ID:nN31253973]
" After adding 192,000 jobs in February, this would indicate the economy is finally gaining some flying speed but if the jobs figure falls significantly short of 200,000, the economic recovery is in a lot of trouble," said Peter Morici, an economist at the University of Maryland business school.
" If the economy created less than 165,000 jobs in March, it is at peril of a second recession."
In other markets, Asian shares rose on Friday, looking to extend three straight quarters of gains, while oil kicked off the new quarter in positive fashion with U.S. prices climbing after closing at their highest in 2-1/2 years on Thursday against the backdrop of fighting in Libya and unrest in the Middle East.
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SINGAPORE, April 1 (Reuters) - - Gold dropped on Friday before the release of U.S. non-farm payrolls report which could underpin the dollar and weigh on bullion, while ETF holdings posted their biggest quarterly decline ever.
FUNDAMENTALS
* Spot gold fell $4.33 an ounce to $1,432.15 an ounce by 0100 GMT, having risen nearly 1 percent on Thursday on inflation worries sparked by rallies in oil and grain prices. Gold was below a lifetime high around $1,447 struck last week.
* U.S. gold futures for April dropped $6.2 an ounce to $1,432.7 an ounce.
* The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust , posted in the first three months of 2011 its biggest quarterly drop since inception, as the prospect of interest rate hikes and gains in other commodities drove investors to sell.
* U.S. nonfarm payrolls are expected to have increased a solid 190,000 after rising 192,000 in February, according to a Reuters survey, with the unemployment rate seen holding steady at a near two-year low of 8.9 percent.
MARKET NEWS
* The dollar drifted off lows versus the euro and particularly against commodity currencies early in Asia on Friday following more hawkish comments from a senior Federal Reserve official.
* U.S. crude prices rose to a 2-1/2 year high on Friday, boosted by worries a protracted conflict in OPEC member Libya could keep its oil exports shut.
* Japan's Nikkei average opened little changed on Friday as a weaker yen provided support after posting solid gains over the last two sessions, but investors were reluctant to take large positions ahead of U.S. jobs data later in the day.
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Gold recovers as dollar slips, Mideast simmers
LONDON (Mar 31) Gold rose in Europe on Thursday, rebounding after the previous session's late price retreat, as dollar weakness, concern over euro zone sovereign debt and unrest across the Middle East region supported buying.
The metal is on track for a tenth consecutive quarter of gains, also supported by low interest rates and high liquidity in the wake of a raft of quantitative easing programmes.
But its quarterly rise is set to be its smallest since the third quarter of 2008, before the financial crisis took hold, as investors fret over the prospect of monetary tightening in the United States and the euro zone.
Spot gold was bid at $1,428.90 an ounce at 0914 GMT, against $1,423.38 late in New York on Wednesday. U.S. gold futures for April delivery rose $5.20 to $1,429.00.
" Until we see a substantial decrease in liquidity or a rise in real interest rates, you would look for an upward trend, and all these other factors like the euro zone debt and Middle East, North Africa issues are also a short-term support," said Standard Bank analyst Walter de Wet.
But he said while the bank still expects to see gold prices above $1,500 an ounce, this is unlikely to happen before the third quarter.
" We're unlikely to see massive new inflows into gold at the moment because people are uncertain about what the Fed's going to do," he said. " We are pretty certain they are not going to change interest rates for the next three quarters at least, but they may start reducing the balance sheet."
Investors are awaiting a report on U.S. non-farm payrolls for March due Friday, considered a key indicator of the health of the U.S. economy. Forecasts suggest the economy recorded a second month of solid job growth this month.
Signs the U.S. jobs market is recovering could support calls from some Fed officials to wind up the central bank's monetary easing programme earlier than expected.
" The gold market is caught on one hand between geopolitical risks and inflation-hedge and sovereign risk buying, and on the other hand by growing expectations that QE2 will wind down and monetary policy will be tightened," said HSBC in a note.
DOLLAR SLIPS
The dollar fell 0.4 percent against a basket of major currencies on Thursday. A weaker dollar makes assets priced in the U.S. currency cheaper for other currency holders.
The euro was up 0.4 percent on anticipation of a rate hike from the European Central Bank next month, but rating agency Moody's warned further sovereign ratings downgrades for euro zone countries cannot be ruled out.
Concerns over euro zone sovereign debt were a major factor fuelling a 30 percent rise in gold prices last year.
Oil prices also climbed, with Brent crude futures heading for their biggest quarterly gain in almost two years as violence swept across the Middle East and North Africa.
As unrest simmered in Libya, U.S. officials said President Barack Obama had authorised covert support for rebels fighting Muammar Gaddafi.
On the supply side of the market, China's leading mined gold producer, Zijin Mining, said it expects gold prices to rise above $1,500 an ounce by year end, and said it plans to produce 62.57 tonnes of gold this year.
Among other precious metals, silver was bid at $37.76 an ounce against $37.44. Silver is on track to rise 22 percent this quarter, benefiting from gains in gold and expectations that industrial demand for the metal will improve.
The gold:silver ratio dropped to its lowest since 1983 on Thursday at 37.8 as silver outperformed gold.
Platinum was at $1,772.99 an ounce against $1,765.85, while palladium was at $760.72 against $751.78.
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Closing Gold & Silver Market Report – 3/31/2011
By Stephanie ChandlerMarch 31, 2011GOLD AND SILVER SETTLE AT RECORD HIGHS.
COMMENTARY: The Dow industrials finished its best first quarter in more than a decade near their bull-market high. Gold and silver have out-performed the market today, with gold at a record high, and silver at a 31-year high. Investors were buying precious metals ahead of the jobs report tomorrow, unsure of what it would say, and for protection against a weakening dollar. Although the European Union has its share of debt problems, the Euro is gaining against the dollar on expectations that the European Central Bank will raise interest rates next Thursday. The U.S. dollar was lower by 0.34% today and was feeling continued pressure from the Euro.
Historically, world monetary policies have an impact on precious metals prices, but some feel that the unrest in the Middle-East and Africa are having a bigger impact on day-to-day prices. Jim Steel, a precious metals analyst with HSBC in New York said, “Geopolitical concerns are taking the lead over expectations of [monetary-policy] tightening.” With the continued unrest in Libya and Gadhafi’s forces taking back the key oil town of Ras Lanuf, the price of a barrel of oil pushed past $106.
At 4:15 PM (CT), the APMEX precious metals spot prices were:
- Gold - $1,433.00 (up $8.20 on the day)
- Silver - $37.73 (up $0.15)
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Morning Gold & Silver Market Report – 3/31/2011
By Peter LaTonaMarch 31, 2011GOLD ON LONGEST WINNING STREAK SINCE 1979
Gold has firmly positioned itself as an alternative investment with an important role in portfolio diversification strategies. Gold’s negative correlation to other asset classes makes it an essential risk management tool. In other words, a safe haven. Gold’s rise is often directly attributed to the increased risks of a global economy and their unintended and unanticipated consequences. These same factors that have driven the increase in gold prices would appear to still be in place.
Public faith and trust in “corporate business leaders” may be shaken to new lows as a report came out this morning that a possible successor to Warren Buffet quit under circumstances that are under investigation. David Sokol, considered to be a potential candidate to replace Warren Buffet at Berkshire Hathaway Inc, resigned after it came to light that he purchased millions of dollars of Lubrizol Corp shortly before urging Mr. Buffet to buy the company. Both Mr. Buffet and Mr. Sokol have stated that they believe these trades to be lawful.
Initial claims for state unemployment benefits fell 6,000 to a seasonally adjusted 388,000. A poll conducted by Reuters with Economists had projected this number at 380,000, but still, this is three weeks in a row below 4000.
On the European front, Portugal appears one step closer to requiring a bail out, as their 2010 debt estimate came in higher that projected. The government target was 7.3%, but the current estimate is 8.6%
Precious metal prices are moving up in early morning trading. At 8AM (CT) the APMEX precious metal prices were:
- Gold price - $1,436.70 (up $11.90)
- Silver price - $37.89 (up 31 cents)
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SINGAPORE, March 31 (Reuters) - Gold edged down on Thursday as investors booked profits from a rally in the previous session, and trading was likely to be muted ahead of the release of Friday's U.S. jobs report.
FUNDAMENTALS
* Spot gold fell $2.08 an ounce to $1,421.30 an ounce by 0027 GMT, having risen as high as $1,430 on Wednesday as resurgence of risk appetite spurred buying of bullion along with other assets. Gold was below a lifetime high around $1,447 struck last week.
* U.S. gold futures for April dropped $2.4 an ounce to $1,421.4 an ounce.
* Gold's decade-long price rally which took the metal to record highs last week looks set to plateau in the second quarter as more downside risks for bullion emerge, a Reuters survey showed on Wednesday.
* U.S. private employers added more than 200,000 jobs in March while planned layoffs fell, underscoring expectations that momentum in the labor market will help underpin the economic recovery.
MARKET NEWS
* Japan's Nikkei average extended gains on Thursday after strong U.S. data backed the view of an improving global economic outlook, which had helped drive global markets higher the day before, and as the yen weakened further against the dollar.
* The yen slipped across the board on Thursday, hitting fresh 10-month lows versus the euro and holding near a three-week trough against the dollar as expectations grew that Japan will lag euro zone and U.S. central banks in raising interest rates.
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Closing Gold & Silver Market Report – 3/30/2011
By Stephanie ChandlerMarch 30, 2011ECONOMIC BACKDROP SETS STAGE FOR HIGHER GOLD INVESTMENT
COMMENTARY: Precious metals have all stayed positive today despite the fact that the Dow Jones Industrial Average being within reach of its highest close since mid-2008 and that QE2 continuing on schedule.
Paul walker, CEO of GFMS says, “We think that in particular, the economic backdrop is still very conducive to higher gold investment.” He continues by saying that ultra-low interest rates, geopolitical turmoil, economic uncertainty, “in our view are going to be positive for investment demand in gold and should see prices move higher. “ He predicts that gold will surpass the $1,500 level “in the not too distant future.”
On a side note, Utah has now eliminated state tax on precious metals. Larry Hilton, an attorney who helped push the bill, said that by eliminating the tax on the exchange of the metals, the metals would then be on the same playing field as paper currency. He feels banks might step in and using the precious metals to back their accounts. Is Utah headed toward a gold and silver backed state? If this benefits Utah, maybe it will set the stage for change in other states. Only time will tell.
At 4PM (CT) the APMEX precious metal prices were:
- Gold price - $1,423.90 (up $6.70)
- Silver price - $37.51 (up 46 cents)
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Morning Gold & Silver Market Report – 3/30/2011
By Ryan SchwimmerMarch 30, 2011BERNANKE SPEAKS, PRECIOUS METALS PRICES RISE
Federal Reserve Chairman Ben Bernanke does have history on his side when he says that increasing prices for food and fuel won’t “break” the cost of living for most Americans. When the Fed looks at inflation they look at two measures, one of which does not consider food and energy prices, because it provides a better picture of long-term trends. Marketwatch’s Rex Nutting points out that while consumers are biased (and only thinking of the 25% of expenses that are increasing, while ignoring the 75% of “sticky” expenses), the Fed has a credibility problem. This is simply because, frankly, no one believes them when they say that inflation is not a problem at the moment. Of course, monetary issues are hardly confined to the U.S. Portugal needs a bailout more than ever, as borrowing rates hit new euro-era highs.
Fighting in Libya continues as the rebels have been pushed back by Muammar Gaddafi’s forces. The rebels seem to need Western air strikes to stand up to government forces, whether it be to advance or even hold position. Many are also concerned about lack of food and medicines being delivered to the insurgents. China believes that Western action is making things worse, saying that “Dialogue and other peaceful means are the ultimate solution to the problems.”
At 8:06 AM (CT) the APMEX precious metals spot prices were:
- Gold - $1,428.50 (up $11.30 on the day)
- Silver - $37.72 (up $0.67)
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another round ?
LONDON, March 30 (Reuters) - Gold rose on Wednesday on
firmer equities and upheaval in Libya, but further gains were seen hindered by tightening monetary policy in some regions that could erode bullion's appeal as a hedge against inflation.
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