Gold Hovers Around $1,700 Ahead of EU Summit

By: Reuters

Gold prices hovered around $1,700 an ounce on Wednesday, after rising more than 3 percent in the previous session as safe-haven bids returned on doubts European leaders can agree on a plan to end the euro zone debt crisis at a summit later in the day.

Jose Luis Pelaez | Iconica | Getty Images

Spot gold [XAU=  1715.15    14.50  (+0.85%)   ]edged up 0.2 percent to $1,703.59 an ounce by 0024 GMT, after posting its biggest daily rise since Sept 2 on Tuesday.

U.S. gold [GCCV1  1716.00    15.60  (+0.92%)   ]gained 0.3 percent to $1,705.40.

Safe-haven bids returned on Tuesday after being absent for weeks, as a flare-up over the European Central Bank and political turmoil in Italy kept the euro zone on edge on the eve of the summit.

Adding to the uncertainty on economic outlook, U.S. consumer confidence dropped unexpectedly to its lowest level in two-and-a-half years in October.

Holdings of SPDR Gold Trust [GLD  165.59    4.57  (+2.84%)   ],  the world's largest gold-backed exchange-traded fund, rose nearly 0.9 percent from a day earlier to a one-month high of 1,233.564 tonnes by Oct 24.

Spot silver [XAG=  33.26    0.04  (+0.12%)   ] lost half a percent to $33.07, easing from a 4.6-percent rise in the previous session, its largest one-day rise in nearly three weeks.

Spot palladium [XPD=  647.25    10.32  (+1.62%)   ] gained 0.6 percent to $640.95, on course for its fourth consecutive session of gains. Spot platinum[XPT=  1567.49    10.89  (+0.7%)   ] hit a 1-1/2-week high of $1,571, before easing to $1,569.74, up 0.8 percent from the previous close.

The euro and commodity currencies stayed under a bit of pressure early in Asia on Wednesday, having lost some of their gloss as markets geared up for what could be a disappointing outcome at a keenly awaited European Union leaders' summit.

U.S. stocks fell on Tuesday on doubts European leaders can agree on a plan to end the euro zone debt crisis, while major corporations disappointed investors with their outlooks.

technical of oct 26 afternoon

GOLD (Spot) intraday: the bias remains bullish.

Pivot: 1690.00 Our Preference: LONG positions above 1690 with 1725 & 1730 in sight. Alternative scenario: The downside penetration of 1690 will call for 1672.5 & 1659. Comment: the RSI is supported by a rising trend line.

Gold Steady as Market Eyes EU Summit

By: Reuters

Gold prices held steady on Tuesday after gaining for two consecutive sessions, as investors wait for European leaders to agree on a strategy to solve the euro zone debt crisis at a gathering on Wednesday.

Anthony Bradshaw | Photographer's Choice RF | Getty Images

Spot gold [XAU=  1659.10    6.92  (+0.42%)   ]edged down 0.2 percent to $1,649.59 an ounce by 0025 GMT, after rising 2 percent over the past two sessions.

U.S. gold [GCCV1  1655.70    3.40  (+0.21%)   ]was little changed at $1,651.50. 

As investors wait for the second European Union summit on Wednesday, business surveys showed that business activity at manufacturers and service sector companies in the euro zone further contracted from the previous month.

The U.S. Federal Reserve  could potentially do more to drive down mortgage rates to support the housing sector, and another round ofquantitative easing  is one possible option for the central bank to boost growth, said William Dudley, president of the New York Federal Reserve Bank.

Holdings in SPDR Gold Trust [GLD  161.02    1.50  (+0.94%)   ], the world's largest gold-backed exchange-traded fund, gained about half a percent to 1,233.564 tonnes by Oct. 24, after standing unchanged throughout last week.

U.S. stocks rose on Monday, as a flurry of merger activity and strong earnings from Caterpillar boosted investor sentiment and kept the three-week rally intact.

The euro edged lower on Tuesday, after hitting a six-week high against the dollar in the previous session, as investors grew confident European leaders will come up with a broad agreement to deal with euro zone's debt crisis at the summit scheduled for Wednesday.

Technical of oct25 afternoon

GOLD (Spot) intraday: bullish bias above 1644

Pivot: 1644.00 Our Preference: LONG positions above 1644 with 1660 & 1665 as next targets. Alternative scenario: The downside penetration of 1644 will call for a slide towards 1633 & 1625. Comment: the RSI is supported by a bullish trend line.

Gold Up 1 Percent on Europe Hopes, China Data

Gold rose 1 percent on Monday, as European leaders edged towards a solid plan to resolve the euro zone debt crisis and signs that China's economy is in better shape than feared.

Don Farrall | Getty Images

In recent weeks gold prices have followed moves in riskier assets, with the precious metal's safe-haven appeal diminishing after wild price swings in the past quarter.

The euro hit a six-week high against the dollar on signs of progress on EU policymakers' plans to recapitalise euro zone banks and leverage the region's bailout fund, although there was still uncertainty as a deal has still to be concluded.

"Gold popped up this morning along with most of the commodities markets. The beginning of the EU debt  resolution has had a strengthening effect upon commodities and equities as a whole," Credit Suisse analyst Tom Kendall said.

Spot gold [XAU=  1657.20    16.78  (+1.02%)   ] rallied 1 percent to $1,657.6 an ounce and eased to $1,647.39 by 0856 GMT, after falling last week.

U.S. gold [GCCV1  1654.10    18.00  (+1.1%)   ] rose as much as 1.4 percent to $1,658.6 before easing to $1,649.

But technical analysis suggested spot gold could fall to $1,602.74 during the day, said Reuters market analyst Wang Tao.

China's vast manufacturing sector picked up moderately in October, snapping a three-month contraction and underscoring the resilience of the world's second-largest economy backed by robust domestic demand.

"The China PMI got the market fired up, with a lot of shorts covering as the data suggested that the slowdown in China may have peaked," said David Thurtell, a Citigroup analyst.

In the euro zone, the private sector tipped further into decline in October, according to business surveys on Monday that showed the bloc's economy is in serious danger of lurching from stagnation into outright recession.

Spot palladium [XPD  Unavailable      ()   ] led the rise in precious metals, rising more than 3 percent to $630.75, after suffering a decline of 1.5 percent last week. It was last at $619.72.

The metal, used mainly in making autocatalysts for gasoline-powered engines, was still the worst-performing precious metal so far this year, down 21 percent.

Gold Investment Interest Lags

Investors' interest in gold remained lacklustre.

Net long positions in U.S. gold futures and options hovered near their 8-month low, and total open interest dipped to a three-month low in the week ended on Oct.18, data from the U.S. futures regulator showed.

Holdings in the SPDR Gold Trust [GLD  159.52    1.75  (+1.11%)   ] stood unchanged at 1,227.511 tonnes throughout last week.

The world's largest gold-backed exchange-traded fund saw a small outflow of about 4 tonnes so far this month, and the holdings were down about 53 tonnes from the end of 2010, according to the fund's website.

"Gold investor interest has stabilised and physical demand continues to emerge, albeit at softer levels," Barclays Capital said in a note.

"We continue to expect gold prices to be cushioned amid the seasonally strong period for demand, and this remains key before investment demand returns to the driver's seat."

technical of oct 24

GOLD (Spot) intraday: the bias remains bullish.

Pivot: 1629.00 Our Preference: LONG positions above 1629 with targets @ 1648 & 1660. Alternative scenario: The downside breakout of 1629 will open the way to 1611 & 1603. Comment: the RSI is bullish and calls for further upside.

Technical of oct21

GOLD (Spot) intraday: up turn.

Pivot: 1618.00 Our Preference: LONG positions above 1618 with 1642.5 & 1650 in sight. Alternative scenario: The downside penetration of 1618 will call for 1605 & 1595. Comment: the RSI is supported by a rising trend line.

Gold Steady; Europe Concerns Persist Before Summit

By: Reuters

Gold prices held steady on Friday after falling more than 1 percent in the previous session, as uncertainties on Europe's resolution to contain its debt crisis persisted ahead of a key European Union summit this weekend.
     

altrendo images | Getty Images

Spot gold [XAU=  1628.8101    10.21  (+0.63%)   ]was little changed at $1,618.31 an ounce by 0014 GMT, headed for a fall of 3.6 percent from a week earlier, its biggest weekly decline in nearly a month.

U.S. gold [GCCV1  1630.00    17.10  (+1.06%)   ]gained 0.4 percent to $1,619.60, off a two-week low of $1,604.7 hit in the previous session.

Deep divisions between France and Germany mean they will make scant progress on strengthening the euro zone bailout fund at a summit on Sunday in a sign that Europe's leaders are still some way from getting a grip on the bloc's debt crisis.

Factory activity in the U.S. Mid-Atlantic region rebounded in October and the number of Americans claiming new jobless benefits fell last week in fresh signs that the economy was likely to duck a new recession.

Against the backdrop of violent protests in Athens and a general strike which shut down much of the country, Greece's parliament approved a painful set of austerity measures, which would ensure the release of a vital 8 billion euro loan tranche by international lenders to avert default in the short term.

Holdings of the world's largest silver-backed exchange-traded fund, iShares Silver Trust [SLV  29.73    -0.50  (-1.65%)   ], edged lower from the previous session to 9,874.05 tonnes, lowest in nearly a month, as silver prices retreated.

Spot silver [XAG=  30.84    0.35  (+1.15%)   ] inched down 0.3 percent to $30.40, on course for a weekly decline of 5.6 percent, its biggest one-week fall in a month.

U.S. stocks ended with modest gains on Thursday, shifting back and forth on incremental developments in Europe where leaders sought to reassure investors that a solution to the debt crisis would come soon.

The euro clung to overnight gains early in Asia on Friday but looked set to stay in a tight range with traders wary of taking big positions ahead of a weekend summit on tackling Europe's debt crisis.

Vietnam 5 selected banks and the SJC sell 5ton gold

The State Bank of Vietnam allowed 5 selected banks and the SJC to sell additional 5 tons of gold to the domestic market in an attempt to reduce the local gold premium and stabilize the local market.

The State Bank of Vietnam allowed 5 selected banks (Eximbank, ACB, Techcombank, Dong A Bank and Sacombank) and the Saigon Jewelry Company Limited (SJC) to sell additional 5 tons of gold to the domestic market in an attempt to reduce the local gold premium and stabilize the local market.

The SJC gold price as of Oct 19 was listed at VND43.3 million/tael and VND43.5 million/tael for bid and ask, respectively, down VND400,000 from Oct 18. The local gold premium was thus narrowed to VND650,000/tael, converted at dollar prices in the free market.

More than 10 tons or $600 million worth of gold was sold to the market in the first week of October under the SBV’s approval, of which the SJC sold 60,000 taels or 2 tons of gold, the state-run news website VnExpress (vnexpress.net) said.

The State Bank of Vietnam (SBV) also sold $150 million in the first week of October to stabilize the USD/VND exchange rates, the Thoi Bao Ngan Hang (Banking Times) reported.

Source Sophie/ News Writer/ StoxPlus

Gold Price Drops as Failing Euro Makes for a Strong Dollar says Pan American Metals of Miami

(1888PressRelease) A strong dollar and rumors that commodity contracts may be limited combined to cause a drop in the price of gold today.

MIAMI, FL - Following yesterday's rise in price, today saw another sharp correction for gold. The euro dropped sharply, making for a stronger US dollar and causing a 'knock-on' effect for gold. The strong US dollar makes gold more expensive to own in other currencies, therefore forcing down the price as investors outside the US start to bail. Gold still has a strong value as a safe haven but investors vary in their attitudes to owning gold. Those who are looking for long-term security will hold onto their gold, even taking advantage of these corrections to add to their holdings; on the other hand, those who believe in trading and want to show profits may well exit their positions.

"This is another buying opportunity for serious, experienced investors who wish to amass and retain their stocks of gold bullion," says Bill Hionas of Pan American Metals of Miami. "If gold is used as a safe haven, then it will not be traded but will be left to do its job, which it does extremely well."

Another factor affecting the price of gold today is the rumor that the Commodities Futures Trading Commission may introduce legislation that will limit the number of commodity contracts that any investor can hold in a number of commodities, including precious metals. This has caused some traders to reduce their net long positions and is likely contributing to today's drop in price. However, all the fundamentals still support gold and savvy investors will realize this and maintain their bullion holdings, or take advantage of the price dip to increase them.
Pan American Metals of Miami
source

gold down 6 reason

Here are several factors that may have affected gold and silver prices to decline during September:

1. The CME raises the margin requirements for gold and silver contracts (see below);
2. The FOMC decision to implement a stimulus plan in which the Fed will purchase LT securities and sell ST securities until June 2012 (see below);
3. The strengthening of US dollar compared with the riskier currencies including Euro,Austrian Dollar, Canadian dollar during September especially during the second half of the month;
4. New hope that EU policymakers are taking actions to stabilize the financial communities;
5. Shifts in the sentiment of traders as traditional “safe haven” investments were traded down.

Here are several factors that may have affected gold price and silver price and curbed their downfall:

1. The debt crisis in Europe is still real and near and the speculation around Greece’s default on its debt, and Italy’s rating downgrade didn’t help ease the concerns of many investors.
2. The US labor report for August that showed no increase in U.S. employment;
3. The increase in gold holding by governments during September (see below);
4. The sharp falls in the U.S. stock market indexes mainly during the first half of September (see below);
5. The rapid falls in long term US Treasury bills yields mainly during the first half of the month (see below);
6. The moderate growth in the U.S. federal deficit during August 2011 by $134 billion as this conditions raised the level of uncertainty the market.

The sharp falls of gold and silver prices during September strengthened the relation between the two bullion prices as the correlation between the daily percent changes of gold and silver pricessharply inclined to 0.858 – the highest correlation level since March 2011.

Investors Retreat From Gold, Opt for Equities

By: Reuters

Gold slid on Wednesday as higher hopes of a resolution to the euro zone debt crisis persuaded investors to shrug off a downgrade to Spain's credit rating and opt for equities, but a softer dollar helped provide some support.

Boris Engelberg | Stock4B | Getty Images

Spot gold [XAU=  1651.40    -7.24  (-0.44%)   ] was bid at $1,653.30 a troy ounce earlier Wednesday from $1,658.64 an ounce late in New York on Tuesday.

European stocks and the euro [EUR=  1.3826   0.0088  (+0.64%)   ] rose on optimism policymakers will take major steps at a summit this weekend to solve the festering debt crisis and offset the impact from a cut to Spain's sovereign credit rating.

That was denied by senior European Union officials, but not before the tone for the day was set.

"When risk appetite increases then there's more (gold) selling," said Carsten Fritsch, an analyst at Commerzbank, adding that a main reason for the price fall since early September was forced selling to cover losses in other markets.

Gold has fallen nearly 15 percent since hitting a record high of $1,920.30 on September 6.

Also a factor behind lower prices has been investors choosing to buy U.S. Treasury bonds as a safe place to park assets, instead of gold.

Indirectly that means demand for dollars, which when it rises makes gold more expensive for holders of other currencies.

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"The dollar is softer today, but gold has been down nearly one percent today ... That relationship appears to have gone AWOL," a precious metals trader said.

Crisis Management

Reports that France and Germany had agreed to boost a euro zone rescue fund to two trillion euros ($2.76 trillion) came ahead of a meeting of euro zone leaders on Oct. 23 to discuss further aid for Greece.

"The situation with gold could well change should risk aversion escalate after 23 October, provided the broader market is disappointed by the EU's debt crisis management with policymakers failing to leverage the EFSF substantially and avoid a structural Greek default," VTB capital said in a note.

"Global gold (exchange traded funds) are already seeing small inflows, while physical buyers were active above recent dips." Looking ahead the wedding season in India is expected to generate strong physical buying interest, traders said.

"Stronger inflows into SPDR will be a good indication of investors coming back to the market," a trader said.

Holdings of the largest silver-backed ETF, New York's iShares Silver Trust[SLV  31.33    0.29  (+0.93%)   ] dipped 0.61 percent on Tuesday from Monday, while that of the largest gold-backed exchange-traded-fund (ETF), New York'sSPDR Gold Trust [GLD  161.84    -0.78  (-0.48%)   ] remained unchanged for the same period.

Spot silver [XAG=  31.91    -0.12  (-0.37%)   ] was at $31.79 an ounce from $32.03 late on Tuesday, platinum [XPT=  1525.24    -2.51  (-0.16%)   ] at $1,531.75 from $1,527.75 and palladium [XPD=  615.97    -1.89  (-0.31%)   ](XPD-) at $617.47 from $617.86.

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