Triland: Gold Needs To Reclaim $1,600 To Boost Market Confidence

Gold needs to reclaim the $1,600-$1,605 area to regain market confidence, says Triland Metals. Otherwise, the focus could return to the $1,525 area where the metal held last month. Gold sold off Thursday when the market was disappointed that Federal Reserve Chairman Ben Bernanke, in congressional testimony, did not signal more strongly than further quantitative easing was in the works. Triland compares the situation to the sell-off from the late-February highs after a similar Bernanke appearance. Hopes for more easing had picked up when Friday’s U.S. May non-farm payrolls report fell below forecasts for the third month in a row. “On huge volume, the gains of the last few days have been wiped out,” Triland says. Sell stops were triggered as gold fell below $1,600, Triland says. The Comex August contract settled $46.20 lower at $1,588 an ounce following the close of the pit session.

Commodities Outlook Is Mixed For Rest Of 2012; Precious Metals, Energy May Rise – Deutsche Bank

(Kitco News) - Commodity markets are weaker on the back of financial instability in Europe and a slowing economy in China, but looking toward the rest of 2012, precious metals and energy markets may be two of the few bright spots for the sector, according to a Deutsche Bank research report released Monday.

Even with the risk of a higher U.S. dollar, central bank gold buying, negative real interest rates and the possibility of further central bank stimulus should support gold’s price, the bank said. Oil market fundamentals could tighten over the next 12 months and considering global economic growth will remain above 3% this year and next year, any fall in oil prices will be short-lived.

“Historically it has only been when global growth has fallen below 2.5% that downward pressure on the oil price has been almost impossible to arrest by OPEC production cuts, at least over a 6-12 month horizon,” Deutsche Bank said.

Agricultural prices will likely be under pressure over the summer because of rising supplies across a number of markets, the bank said.
Industrial metals could see prices rise on an eventual rebound in Chinese gross domestic product, easing credit and a pickup in public sector housing construction. “However, the pace of these measures may be slow to materialize,” they said.

Gold Not Acting As Safe Haven, Falling With Other Markets In Tuesday's Rout

(Kitco News) - Rising concerns about Greece after this weekend’s elections left electoral parties unable to form a coalition government has pressured most financial markets, including gold, which is not acting as a safe haven for investors.
Equities and commodity markets in general are down sharply as investors worry that new elections may be held next month if no coalition Greek government is formed and that the Mediterranean country could be coming closer to a default on its debt obligations. Only the U.S. dollar and U.S. Treasury markets rose, pushing yields down. Yields on the benchmark U.S. 10-year note are at lowest since February.
June gold prices on the Comex division of the New York Mercantile Exchange were down $35.90, or 2.2%, to $1,603.20 an ounce as of 11:49 a.m. EDT. The market hit a low of $1,595.50 that was the lowest price since Jan. 3.
Gold fell with the rest of the markets as investors sought to raise cash. Dave Meger, director of metals trading with Vision Financial Markets, said a pick-up in the eurozone worries typically triggers a “risk-off” trade in which the first move by participants in a broad range of markets – including gold – is to move the sidelines. A stronger U.S. dollar adds to the weight in gold and other metals.

Market Nuggets: Mitsubishi: Gold Hit By 'Another One Of Those Tsunamis Of Selling'

Tuesday May 08, 2012 2:45 PM

Gold’s weakness was exacerbated by “another one of those tsunamis of selling,” says John Howlett, division vice president with Mitsubishi International. “Supposedly upwards of 14,000 lots of gold were sold in the 5 minutes from 8:20 to 8:25--the old open-outcry opening time,” he says. “After the 7,500 that went on April 30, it may be safe to say that somebody’s system is telling them to abandon ship. And that somebody has some substantial volume to chuck around.” He cites two technically bearish items for gold: “the market is significantly through and closing belowthe 300-day moving average for the first break since 2008 and the market is also ‘under the cloud’ on the ichi moku chart for the first time since Q1 2009. The caveat on the second item is that it’s best on a weekly chart and it’s only Tuesday.” Meanwhile, a trendline back to November 2008 puts support in the area from $1,595 to $1,605, he adds. As of 2:10 p.m. EDT, Comex June gold was $34.40, or 2.1%, lower at $1,604.70 an ounce.

Higher Prices Expected Overall Next Week For Gold, But Survey Participants Generally Split

Survey participants in the weekly Kitco News Gold Survey see gold prices rising next week, but bulls do not have the majority of the opinion.
In the Kitco News Gold Survey, out of 33 participants, 25 responded this week. Of those 25 participants, 11 see prices up, while six see prices down, and eight are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
Those who see higher prices said the U.S. dollar’s action will determine where gold may go.
“With the dollar weakening versus the euro, gold should do well in the week and month ahead. I look for a $1,680 target next week and longer term, the next 4-6 weeks, $1,725 is a reasonable upside objective,” said Ken Morrison, editor and founder of online newsletter, Morrison on the Markets.
Generally a weaker dollar supports gold since the metal is denominated in dollars.
Technical analysts said $1,620 an ounce is a key chart level for gold to hold next week.
Those who see weaker prices also spoke of currency factors, suggesting that the euro may come under pressure if there are any surprises in this weekend’s French presidential elections or weaker-than-expected results regarding eurozone manufacturing data due out next week.
Several who said they were neutral on prices or saw prices holding in a sideways pattern said the lack of a strong trend in gold should continue for the time being, which means range-bound trade.

Market Nuggets: HSBC: Gold Rises With Recovery In Risk Assets, Softer Dollar

Gold rose on a recovery in risk assets and a softer U.S. dollar, says HSBC. An Italian bond auction was described as well received and not presenting a near-term negative for the euro, the bank says. Further, the U.S. trade deficit for February narrowed, mostly due to increased exports, prompting a rally in risk assets and a shift out of U.S. bonds. “This supported EUR/USD, and in doing so, helped buoy gold and the other precious metals,” HSBC says. “Gold prices were further supported by a relaxation of eurozone funding stresses. One sign of reduced stress in the eurozone bank funding market was the slight narrowing of the EUR-USD 3-month currency basis swaps. This was supportive of the EUR and therefore positive for gold.” As of 4:19 p.m. EDT, Comex June gold was $17.30, or 1%, higher for the day at $1,677.70 an ounce. May silver was up 83.4 cents to $32.355.

Gold off 3-month low; dashed easing hopes, euro weigh

SINGAPORE, April 5 (Reuters) - Gold edged up on Thursday, after diminishing hopes of more monetary stimulus from the U.S. central bank and a weakened euro pushed bullion to its lowest level in nearly three months in the previous session.
FUNDAMENTALS * Spot gold inched up 0.2 percent to $1,621.89 an ounce by 0027 GMT, off a near three-month low of $1,611.80 hit in the previous session. * U.S. gold rebounded more than half a percent to $1,623.30. * Gold tumbled for two days straight after the U.S. Federal Reserve released minutes from its last policy meeting which showed policymakers were less likely to push for more monetary easing as the economic outlook gradually improves. * A job market report said on Wednesday that U.S. businesses added more than 200,000 jobs in March, giving fresh evidence of recovery. * Adding to gold's woes, the euro fell to a three-month high against the dollar as worries about the euro zone debt crisis rekindled after a poorly received Spanish government bond sales. * European Central Bank cautioned about the downside risks to the economic outlook and dismissed a German-led push for the bank to start planning a retreat from emergency crisis-fighting. * The Shanghai Gold Exchange reopens on Thursday after a three-day hiatus. When the market closed last Friday, the popular spot gold deferred contract closed at 339.13 yuan a gram, or $1,674 an ounce. * SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings were unchanged at 1,286.621 tonnes by Wednesday. But holdings in the world's key gold ETFs gained 44,761 ounces on the day to 70.4 million ounces (2,190 tonnes). * Spot silver edged up 0.2 percent to $31.36 an ounce, after sliding 4 percent in the previous session -- its largest daily decline in more than a month.