'Patient' Fed Sends Silver to 13-Month High But Demand to Buy Gold Already Dented by Q1 Jump

BUY GOLD prices headed for their 4th sharpest weekly rise of 2016 to date on Friday in London, coming within $2 per ounce of March's 13-month peak as world stock markets fell with the US Dollar and commodities edged higher again.   The Dollar fell near 3-month lows against the British Pound and 2-week lows versus the Euro after first-quarter data showed GDP across the 19-nation Eurozone – the world's single largest economic bloc – growing faster than either the US or UK figures released earlier this week.   The 330-million citizen curency union, however, then slipped back into annual consumer-price deflation of 0.2% this month, led by an 8% drop in energy costs.   The Central Bank of Russia meantime held its key interest rate at 11%, following the US Federal Reserve and Bank of Japan in making no change to policy at this week's scheduled meetings.   Prices to buy gold in Rubles fell – bucking this week's trend for all major currencies bar the Japanese Yen – as the Russian currency rose to its highest US Dollar value since November on the FX market.   Dollar investors wanting to buy gold Friday saw the price touch almost $1281 per ounce, trading 3.4% above last week's finish.   "I believe that, in a more interconnected world, labor slack should be assessed in a global context," said US Fed 'dove' Robert Kaplan in a speech in London on Friday, "[because] excess capacity outside the US may dampen inflation pressures in the US at a given level of unemployment.   "The effort to 'normalize' monetary policy is important [but] removal of accommodation should be done gradually and patiently...From a risk-management point of view, our monetary policies have an asymmetrical impact at or near the zero lower bound."   "With the Fed effectively taking itself out of the rate hiking business at least until June," says a note from US brokerage INTL FCStone, "it seems that the path of least resistance for gold and the rest of the precious metals group is higher still over the short-term, as the Dollar sell-off shows no sign of easing."   But "if Fed rate hike expectations return to the market," counters German financial services group Commerzbank, "we see correction potential for silver...together with gold...following its sharp price rise in recent weeks."   Should the US Dollar strengthen ahead of the Fed's June meeting, "the silver price could then fall to as low as $15 per troy ounce," it warns, pointing to speculation as the driver of this latest jump.   Global demand to buy gold jewelry, coins, bars and for industrial use fell 24% year-on-year amid January-to-March's strongest quarterly price rise in 30 years, analysts Thomson Reuters GFMS said in a new report this week.   Dollar prices have this month averaged 5% above the Q1 average, but slipped $6 per ounce to $1240 per ounce from March, the highest monthly average since January 2015.     Silver today matched the 2016 rise in prices to buy gold, extending the week's 4% jump to reach the highest level since January last year above $17.85 per ounce.   With several major gold miner companies reporting larger output this week for the first 3 months of the year, new data from China – the world's No.1 gold mining nation since 2007 – meantime said Friday that it produced 0.8% more gold in Q1 than the same period last year.


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Fed & BoJ Indecision See Gold Prices Jump, Yen Leaps as Dollar Falls with Stocks

GOLD PRICES touched a 1-week high Thursday lunchtime in London, reaching $1259 per ounce as the Dollar fell with world stockmarkets as the Bank of Japan followed yesterday's "no change" decision from the US Fed by also voting to maintain current policy, rather than increase stimulus.   Tokyo's Nikkei index sank 3.6% by the close, while European equities dropped over 1% after the Tokyo central bank held QE money creation at a record pace of $740 billion per year, with deposit interest rates for commercial banks held at minus 0.1%.   Gaining 2.2% from last week's finish against the Dollar, gold rose against all major currencies barring the Japanese Yen, which shot to 1-month highs on the FX market following the Bank of Japan's announcement.   New data meantime showed Japanese household spending sank 5.3% per year in March, while consumer prices fell harder than forecast, deflating by 0.3% excluding fresh food.   "The market had clearly worked itself into a frenzy of expectations," says Swiss bank Credit Suisse's head of equity sales in Tokyo, "demanding that the BoJ take action" against slowing growth and lower inflation.   "In retrospect that looks like a misguided view."   Silver also recovered its brief drop today from before Wednesday's Federal Reserve statement, rising back to $17.40 per ounce – a fresh 11-month high when hit last week.   Gold has now risen 20% since the Fed finally raised its key interest rate after 7 years at zero in December last year. Silver has gained 27%.   "The Dollar is still subdued," says Japanese conglomerate Mitsubishi's analyst Jonathan Butler, "and falling US Treasury yields similarly are giving some upside to gold."   "Resistance comes in at $1282.50," says a technical analysis from Canada-based Scotiabank's New York office, "and only a move above [that] March 11th high would return [gold] to the bull rally that began in December."   Overnight in Shanghai – where investors in failed $5 billion asset-manager Zhongjin Capital have begun protesting the police for repayment – gold prices hit a 1-month high against the Yuan, fixing at the city's new benchmarking auction some $6 per ounce above equivalent London quotes this morning.   With commodity prices rising 14% from February's new 12-year lows, meantime, UK fund management group Schroders – which saw client assets swell to a record £325 billion by end-March ($472bn) – has launched an Alternative Solutions Commodity Total Return, investing in energy, agriculture and the metals sector according to CityWire.   Crude oil held steady at $45 per barrel of US benchmark WTI on Thursday, while corn held 10% above March's new 1-year low.   After gold bullion rose at the fastest pace in 3 decades during the first quarter, South African investment house Investec now reckons gold will be the best performing metal or mineral in 2016.   Bank and trading-house analysts have meantime raised their average 2016 full-year forecasts by $90 per ounce since the start of January, reports Thomson Reuters today, up from  $1118 to $1209.   "The chief supportive factors," the news-wire quotes Austalian financial group Macquarie's analyst Matthew Turner, "are the shift in Fed stance, the weaker Dollar and the prospect of inflation."


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Gold/Silver Ratio Drops Fastest Since Start-2012 Ahead of US Fed Decision

GOLD and SILVER bullion held firm ahead of the US Federal Reserve's latest policy decision, due later on Wednesday,    Asian stock markets slipped and European equities held flat as the start of New York trade approached.   The S&P 500 index of America's largest listed businesses closed last night 3.2% higher from the last Fed announcement in mid-March.   Gold prices today held 1.8% higher, keeping half of the precious metal's initial surge to $1271 per ounce made after the US central bank cut its projected number of interest-rate hikes from 4 to just 2 for 2016.   Silver prices meantime traded 14% above where they stood at the last Fed meeting, having extended their immediate jump by a further $2 per ounce to a series of 11-month highs.   "Silver remains rampant as the ratio with gold continues to drop towards 70:1," says today's commodities note from Chinese-owned bullion bank ICBC Standard Bank.   Nearing a two-decade high above 83 at this point in February, the Gold/Silver Ratio today touched 71.8 – the lowest price of gold in silver bullion terms since May 2015.   Dropping 14% since that recent peak, the Gold/Silver Ratio has fallen at its fastest pace since the start of 2012.   With silver prices now outstripping gold's 18% gains for 2016 to date by two-fifths, "Late entrants to this party will leave with an almighty hangover," warns ICBC Standard Bank.   "But it is very hard to predict when the music will stop."   "[Gold's] rally so far in 2016 [also] developed too rapidly in our view," says a new quarterly update on world supply and demand data from specialist analysts Thomson Reuters GFMS.   "With poor demand from Asia we expect the gold price to ease sooner rather than later, particularly if fears about the global economy continue to abate.   UK economic growth retreated to the slowest quarterly pace in 3 years at 0.4% between January and March, new data said today.   Eurozone borrowing growth held unchanged in March, the European Central Bank reported, with new bank loans expanding by only 1.6% per year despite the ECB's move to more deeply negative deposit interest rates and now €80 billion per month in QE bond purchases.   With concerns over Chinese debt defaults rising, stockmarket-traded businesses in China had to wait 70 days on average to receive payment in 2015 the Financial Times reports today, up from 60 days the year before and the longest wait since 2001.   Debtor days were still one-third below the level of the year 2000 however, according to financial database Wind Information.   The Fed is scheduled to release only a statement today, rather than the economic projections and formal press conference at which major announcements are more usually expected.


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Gold Bullion Slips 'But Supported by Tame Fed' as Dollar Falls, China Default Fears Rise

GOLD BULLION erased an overnight 0.6% gain versus the falling Dollar in London on Tuesday, trading back at $1232 per ounce as Asian stock markets shrugged off yesterday's drop in US equities but European shares held flat ahead of tomorrow's Federal Reserve decision on US interest rates.   Major government bond prices ticked higher, nudging yields down, as commodities steadied.   The British Pound broke new 2-month highs above $1.4550, driving the price of gold bullion down to a new 10-week low of £847 per ounce for UK investors.   Trading in US interest-rate bets now puts no chance on the Fed raising from 0.50% tomorrow, but the odds on a hike at the June meeting have risen above 1-in-5 – up from 1-in-6 a month ago – according to data from futures exchange CME.   "The more tame Fed tightening cycle, compared to expectations last year, should support gold," says bullion market-maker HSBC's London analyst James Steel.   But "investors are trimming risk ahead of the FOMC tomorrow," says a note from commodities and bullion bank ICBC Standard – which this month became a market-making member of the London Bullion Market Association.   The bank also points to higher commodity trading costs in China – aimed at deterring violent price swings after steel prices zoomed 47% higher from 13-year lows in 2016 so far.   "Loose monetary/credit policies...are the main drivers behind the latest sharp rally, rather than improving fundamentals," says analysis from US investment services group Bank of America-Merrill Lynch, warning that China's "shadow banking sector doesn’t price risks correctly because of all sorts of implicit guarantees" from the Beijing government.   "[There's also] rising concern (again) about corporate bond default rates in China," says ICBC Standard Bank, after 90% of Chinese investment funds in corporate bonds lost value last week on what Bloomberg calls "concerns [about] spreading corporate note defaults."   The Shanghai Futures Exchange (ShFE) said last week it is raising transaction fees for rebar steel, while the Dalian Commodity Exchange (DCE) said Thursday it is raising trading margin downpayments for iron ore contracts from 7% to 8%.   Amongst Western money managers, "Gold has been the primary driver of [commodity] investment flows so far in 2016," says the UK's Barclays Bank, "taking over from oil, which was the dominant driver in 2015."   London market-maker and bullion clearing member, Barclays in January closed much of its precious-metals division, and is reportedly struggling to find a buyer for its UK vault.   "[Gold's] correction, if any, is likely to be a temporary pause," says French investment and bullion market-making bank Societe Generale's technical analysis team.   While $1190 per ounce "remains a key support medium term...[gold is now] testing short term channel support" from the gentle uptrend of higher highs and higher lows in April, now coming in at $1230 on SocGen's charts.   Silver prices today held steady with gold bullion, trading at $16.90 per ounce, some 4.5% below last week's sudden 11-month high.   Meantime in India – traditionally the world's No.1 private consumer market for gold – jewelers in Delhi re-started their strike in protest at a new 1% sales tax, with The Hindu newspaper finding "most of the jewellery shops in the capital closed" on Monday despite the fast-approaching Akshaya Tritiya festival and spring wedding season.


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Gold Prices 'Correcting', Comex Silver Bets Hit 2nd Largest Ever Ahead of Fed Decision on Dollar Rates

GOLD PRICES held flat Monday morning against a falling US Dollar, trading up to $1236 per ounce as the US currency retreated from 3-week highs versus the single currency Euro ahead of this coming Wednesday's April decision on interest rates from the Federal Reserve, writes Steffen Grosshauser at BullionVault.   Asian and European stock markets slipped and commodities dropped another 0.5% from last week's new 2016 highs, as US Treasury bond yields edged back from 1-month highs at 1.89% per annum on 10-year debt.   The British Pound meantime hit a 10-week high against the Dollar above $1.45, pushing the gold price in Sterling down to 2-month lows beneath £850 per ounce.   Silver prices slipped through and then recovered the $17 per ounce level.   "There's nothing 'fundamental' about the metal's surge from below $15 over the past five weeks," according to Chinese-owned ICBC Standard Bank's London HQ in a note.   Comex futures and options last week saw bullish speculative bets, net of bearish bets, hit the second-highest level on US regulator the CFTC's 20-year records.   "Should [the Fed] continue to hint at further rate delays, we could see the Dollar sell-off resume," reckons US brokerage INTL FCStone's analyst Edward Meir, "in which case most commodity markets, including gold, could push higher.   "However, gold's upside will be capped by the fact that funds will be throwing their money at various other markets that are moving up more decisively than gold, while the continued strength in US equities will also act as another drag."   The Bank of Japan is expected to expand market stimulus at its two-day policy review starting this Wednesday, according to a Bloomberg survey of economists.   Amid speculation that Tokyo's central bank could push interest rates for the world's 3rd largest economy even deeper into negative territory, Japan's Nikkei stock index ended Monday slightly down after it jumped to an 11-week high last Friday, while the Yen rose again versus all major currencies after its sharpest weekly drop since October 2014.   "Gold is in a corrective phase after recent gains," says investment and bullion bank HSBC's analyst James Steel.   "Each time it has rallied to $1270-$1282, it has fallen back on profit-taking, especially when the Dollar has rallied."   With the Fed meeting likely to spur unease this week, “A further correction is likely," says Steel, "but the return of India to the global market [after a 1-month strike strike over a new sales tax] and the possibility of firmer oil prices may support prices and keep the market above $1220."   Overnight in Asia, gold trading turnover "was noticeably lighter" despite the $15 price drop from Friday morning, notes Swiss refining and finance group MKS.   "Chinese investors remained fairly quiet throughout the day [but with] some modest buying going through."   The new Shanghai Gold Fix – launched as a Yuan-price benchmark last Tuesday – today came in some $3 per ounce above spot-trading London quotes at the 2.15pm auction, equal to $1237.73 per ounce as the Chinese currency edged back to 6-week lows versus the Dollar ahead of this week's US Fed meeting.


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World Gold Council signs memorandum of understanding with the DMCC to support the promotion and adoption of a Shari’a standard on gold in Dubai

At the 2016 Dubai Precious Metals Conference, the World Gold Council hosted a successful seminar to update industry participants on the latest developments in the creation of a global Shari’a Standard on Gold (“the Standard”). The event kicked off the schedule and showcased gold product ideas that will be enabled by the Standard. Following the conference, the World Gold...


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Shanghai Gold Benchmark Price launch

Pan Gongsheng stated that the launch of the Shanghai Gold Benchmark Price is a key


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Silver Adds 6.7% for Week But 2016 Gold Price Gains 'Under Threat' Ahead of Fed

GOLD PRICES held flat in London trade Friday, keeping a 0.9% gain for the week against a rallying US Dollar but staying almost $25 per ounce below yesterday's sudden spike to 1-months highs at $1270.   European stock markets slipped again as Euro gold prices added 1.1% for the week.   Commodity prices meantime stalled at Thursday's near 5-month highs on the Reuters-Jefferies CRB index, holding some 12% higher from February's 14-year lows.   Silver held over $1 higher for the week, setting a benchmark price at midday in London of $17.19 per ounce.   The highest LBMA Silver Price since May last year, that marked a 6.7% weekly rise – the second strongest gain of the last 12 months.     "As demand fears have faded and supply reductions bring key [commodity] markets closer to balance, we believe that the lows of first quarter are likely behind us, particularly in oil," says US investment bank Goldman Sachs' natural resources team, switching to "neutral" from "bearish" on the sector.   "[But] gold has very limited near-term upside...reflecting a limited ability of the Fed to surprise on the dovish side...and given very high levels of gold net speculative positioning and ETF holdings."   US central bank the Federal Reserve will announce its latest policy decision on Wednesday next week.   Current betting in the US futures market today put the odds of any rise from the current 0.5% interest rate at less than 1-in-28.   Fixing meantime in Shanghai at a Yuan price of CNY 260.41 per gram on Friday, China's new gold benchmark ended the week some 80 cents above equivalent international quotes, trading at a mid-price of $1247.40 per ounce as London opened for business.   "It will be some time before 'Shanghai Gold' can truly challenge the dominance of its international counterparts," says today's Shanghai Daily newspaper, republishing a story from state news agency Xinhua.   Wholesale trade body the London Bullion Market Association this week told its members that they will be voting at a general meeting on 29 June on changes to its governance structure and remit, possibly to include platinum as well as gold and silver trading.   "The LBMA is considering broad changes to the way gold is traded in London," says Bloomberg, "including transaction reporting and a new trade platform."   "Gold demand has clearly shifted somewhat from East to West again," says German financial services group Commerzbank in a commodities note, commenting on yesterday's Swiss trade data, which showed the key refining center importing some 50 tonnes of metal last month back from Dubai – more typically a destination for exports.   Also looking at Western demand, "The gold rally is most under threat from the resurgence in investor risk appetite," say analysts at international bank and London bullion clearing member HSBC.   "The move in stocks to fresh 2016 highs, if the run continues, may rob gold of some of the oxygen it needs to continue to rally."


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Gold & Silver Prices Surge Again, Defy Analysts' 'Demand Fundamentals'

GOLD PRICED in US Dollars touched new 5-week highs and the metal touched 1-month highs against the Euro on Thursday as European Central Bank chief Mario Draghi disappointed traders looking for yet greater monetary stimulus from the world's largest single currency zone.   Silver meantime leapt more than 2% for the third day running, touching new 11-month highs against both Dollars and Euros as European stock markets fell and New York equities pointed lower.   "Overall, we think that gold fundamentals are broadly stable,"  says Swiss banking group and bullion market-maker UBS, maintaining its 2016 average gold price forecast of $1225 and repeating its view "that a re-allocation into gold is warranted given macro risks, but not to call for a fresh bull run."   New trade data from Switzerland today showed 44 tonnes of gold exports to London last month, confirming bullion-industry reports that a lack of Asian demand for 1-kilo investment bars has seen the world's largest refineries converting investment products back into large 400-ounce bars for wholesale storage in the UK.   Latest UK trade data said February marked only the 7th net inflow of gold bullion to London vaults in 38 months.   With gold priced in Australian Dollars dropping 10% yesterday from February's new record highs, Australian investment bank Macquarie today downgraded its outlook on 5 gold mining stocks, reports the Sydney Morning Herald, and tips gold bullion "to edge down slightly this year to $US1199" per ounce.   Looking at silver,"Despite encouraging figures in the Chinese market," says French investment and bullion bank Natixis' precious metals analyst Bernard Dahdah, "the recent surge in the price is not backed by strong fundamental demand that can justify such high prices."   Indeed, US sales of electronics – a key industrial use of silver – fell 2% per year in March, says Dahdah, marking the 12th such successive fall, while Singapore's electronics exports fell  9% from the same month in 2015.   Noting how silver-backed ETF trust fund vehicles have added 1,300 tonnes pf metal since the start of March, Dahdah repeats his average 2016 price forecast of $14.50 per ounce, warning that "Just as quickly as investors turned into a source of demand for silver earlier in March, so they are able turn into a source of supply of the metal."   Dahdah won 2015's professional LBMA forecast competition in gold, and said at the start of this year that gold would trade below $1000 per ounce by the end of March, forecasting then as now that the US Fed will raise Dollar interest rates again after December's "lift off" from 0% "in the second half of this year."   Gold peaked instead above $1282 during the first 3 months of 2016, rising at the fastest quarterly pace in 30 years.   The ECB today held its monetary stimulus for the 335-million citizen Eurozone at the €80 billion per month in QE asset purchases announced in March, and held the negative interest rate on commercial banks' surplus deposits with the central bank at minus 0.4% – almost equal to the annual management cost of trust-fund gold ETF products, and 3 times the cost of storing and insuring physical gold at BullionVault.


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