Archive | April, 2013

Gold Down But Posts Biggest Weekly Gain in Three Months

27 Apr

Gold fell in choppy trade on Friday on as investors took profits, but the market still posted its biggest weekly gain in three months on strong physical demand after bullion hit a two-year low last week.

Bullion has recovered more than half of the loss of USD 225 per ouce incurred between April 12 and 16.

In early trade, gold rose more than 1 percent after the US Commerce Department reported that economic growth regained speed in the first quarter, but not as much as expected. Gold gave back those early gains and slid into negative territory as options-related selling kicked in, and losses in industrial commodities including crude oil and copper also weighed.

Investors in exchange-traded funds headed for the exits, worried about potential central bank sales of bullion and uncertainty over the outlook for US monetary stimulus.

“There is still some long liquidation in the market, suggesting that some investors are still repositioning themselves, and that leaves the price vulnerable to some sideways actions,” said Erica Rannestad, precious metals analyst at the CPM Group.

Spot gold was down 0.6 percent at USD 1,457.76 an ounce by 3:28 p.m. EDT (1928 GMT), off the session high of USD 1,484.80.

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US gold futures for June delivery settled down USD 8.40 at USD 1,484.80 an ounce. Trading volume was about 10 percent above its 30-day average, preliminary Reuters data showed.

US first-quarter growth expanded at a 2.5 percent annual rate, missing economists’ expectations for 3 percent. Meanwhile, a separate report on consumer sentiment showed a drop from the previous month.

“That (GDP) is encouraging for gold because the whole sell-off in the metal was linked to perceptions that the US economy was getting stronger and stronger,” Societe Generale analyst Robin Bhar said.

Silver also rose early, hitting a 10-day high of USD 24.82. Then it slid, down 1.7 percent in late trade to USD 23.91 an ounce.

STRONG PHYSICAL DEMAND

Physical buying persisted in Asia, with premiums for gold bars in Hong Kong jumping to their highest level since October 2011 this week, at up to USD 3 an ounce to spot London prices.

Premiums in Singapore stayed at their highest since October 2008 at USD 3 an ounce to the spot London prices on demand from Indonesia, Thailand and India.

But while physical demand has been strong, China, the second-largest gold consumer after India, will be on holiday for three days next week for the May Day break, possibly removing significant support from the market, traders said.

A daily drop in exchange-traded funds’ holdings suggested that gold investors were still licking their wounds after bullion’s historic fall last week.

Holdings of the largest gold-backed exchange-traded fund, the SPDR Gold Trust, dipped 0.25 percent to 1,090.27 tonnes on Thursday, from 1,092.98 on Wednesday. Holdings are at their lowest level since September 2009.

Among platinum group metals, platinum gained 0.4 percent to USD 1,472.49 an ounce, while palladium was down 0.4 percent at USD 677.25 an ounce.

Source: Moneycontrol

Gold heads for biggest weekly gain since late 2011

26 Apr

Gold rose to its highest in more than a week on Friday , heading for its biggest weekly gain since October 2011, after a surge in physical demand in Asia helped pluck the metal from a 2-year trough.

FUNDAMENTALS

* Spot gold added USD 4.06 an ounce to USD 1,471.05 by 0025 GMT after posting its biggest daily rise since June last year on Thursday. Gold plunged to around USD 1,321 on April 16, the lowest in more than two years, in a sell-off that surprised ardent gold investors and bulls.

* US gold futures for June delivery stood at USD 1,471.00 an ounce, up USD 9.00.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.25 percent to 1,090.27 tonnes on Thursday from 1,092.98 tonnes on Wednesday. The current holdings are at their multi-year lows.

* Turkey, one of the world’s biggest gold buyers, has imported more of the precious metal in April than in any month since last July following a surge in domestic demand after gold prices hit a two-year low last week.

* Premiums for gold bars soared to multi-year highs in Asia after a spate of physical buying ran down supplies, with dealers in top consumer India expecting a surge in imports this month/

* Russia and Turkey raised their gold reserves in March, the International Monetary Fund said on Wednesday, increasing their holdings ahead of a spectacular plunge in prices this month.

MARKET NEWS

* The dollar recovered from losses to trade higher against the euro on Thursday as resilience in the US labor market allayed some concerns about the nation’s economic recovery, with many analysts expecting more gains ahead for the greenback.

* Japan’s Nikkei average advanced in early trade on Friday after strong US company earnings and resilient labour market data boosted Wall Street, although the benchmark was holding just below the 14,000-mark, a level not seen since June 2008.

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Source: Moneycontrol