News articles of '2016' 'October'

GOLD PRICE in US Dollars rose to $1261 per ounce on Tuesday morning as the US Dollar weakens and Asian & European share prices advance while crude oil price is edging back, writes Atsuko Whitehouse at BullionVault.

The Dollar index, which measures the U.S. dollar’s value relative to a basket of currencies, is down 0.25% to 97.64 after recording 7 months high yesterday.

Asian stocks finished up at the end of today’s trading; Nikkei 225 up 0.38%, Hang Seng up 1.52% & Shanghai Composite up 1.40%.

European stocks were also higher this Tuesday lunchtime; FTSE up 0.89%, DAX up 1.10% and CAC up 1.11%.

Crude oil prices made minor gains on Tuesday following an overnight decline, December Brent crude on London’s ICE Futures exchange rose 0.8%, to $51.92 a barrel.

Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), rose for a third straight session on Monday. They grew 0.18 percent at 967.21 tonnes.

Yesterday, Commerzbank reported on its Commodities Daily, the CFTC statistics on the positioning of speculative market participants showed that, in the last two reporting weeks, net long positions were decimated by around 42%, the most pronounced position reduction in a two week period since the data series began ten years ago.

It went on to say ‘We believe that this will ease the selling pressure from this side, however. What is more, because we assume that gold demand will pick up in Asia in the coming months, we expect the gold price to stabilise and then recover.’

On China’s gold demand, Roland Wang, managing director for China at the World Gold Council (WGC), told Reuters yesterday “We believe we (China) may keep a certain level of about 900-1,000 tonnes of annual consumption (in 2017), but it may face some challenges especially on the jewellery side and also it depends on the price and China’s own economic situation,” on the fringes of an industry conference in Singapore.

Wang also said jewellery traders were seeing “more demand for gold bars since late September” with investors seeking alternate investment options amid China’s housing market curbs.

China’s gold demand reached 984.5 tonnes in 2015 according to WGC’s Gold Demand Trends Full Year 2015.

London Bullion Market Association (LBMA) delegates gather on the last day of its annual conference in Singapore today. Delegates at the conference have forecasted that the average gold price in 12-months time will be $1347.40 per ounce, a 7% rise from today while silver is expected to hit $20.90, nearly a 12% rise.   The last year’s forecast at the LBMA conference in Vienna was $1159.88 for gold.

Disclaimer

This publication is for education purposes only and should not be considered either general of personal advice. It does not consider any particular person’s investment objectives, financial situation or needs. Accordingly, no recommendation (expressed or implied) or other information contained in this report should be acted upon without the appropriateness of that information having regard to those factors. You should assess whether or not the information contained herein is appropriate to your individual financial circumstances and goals before making an investment decision, or seek the help the of a licensed financial adviser. Performance is historical, performance may vary, past performance is not necessarily indicative of future performance. This report was produced in conjunction with ABC Bullion NSW.

GOLD PRICED in US Dollars rose Friday back above its 200-day moving average – a ‘key’ technical level according to several analysts – after new US jobs data came in weaker than expected.

The US jobless rate rose to 5.0% in September according to the Bureau of Labor Statistics’ non-farm payrolls estimate, up one-tenth of a percent from the early 2008 lows reached this summer.

Gold prices rallied to $1261 following the news, $10 above the 4-month low hit as Asian trading began overnight with China still shut for the end of its National Day holiday week.

China’s Shanghai Gold Exchange will re-open Monday to find Dollar gold prices almost 5% below Friday last week.

Thursday saw the LBMA Gold Price auction – the global benchmark for physical bullion – fix below its 200-day moving average for the first time since February down at $1254.50 per ounce.

The average of gold’s previous 200 days proved solid support for the 125% gain from late 2008 to autumn 2011.

It then capped gold’s rallies during the last 12 months of its 45% bear market from 2011 to end-2015.

“Needless to say, our forecasts are currently under review,” says Dutch bank ABN Amro’s latest precious metals analysis, having turned bullish in February (when prices had gained 15% from December’s 6-year low) and then raising its price forecasts again in July (when prices hit a 2-year peak at $1375).

“[While] we expect the long-term uptrends to remain in place…gold prices need to bottom out around $1257 and silver prices around $17.10 per ounce, where the 200-day moving averages come in.

“If gold and silver prices break below these levels, this year’s uptrend is over.”

“Next major support is evident at $1258 per ounce,” agrees precious metals analyst Robin Bhar at French investment and bullion market-making bank Societe Generale in London – “the location of the influential 200-day moving average.

“Should this level be broken then this year’s uptrend could be in danger of unravelling.”

But “key will be whether this sell-off prompts bargain hunting and unleashes pent-up physical demand,” Bhar says, adding that while India’s festival and wedding season – peaking with Diwali at the end of October – will come after a slump in year-to-date demand, it also comes after an “above average” monsoon, likely boosting  rural incomes.

“A lower gold price in Indian Rupee terms should also boost demand…[already] evidenced by a much narrower discount to [London wholesale] prices of $1-2 per ounce, compared with a [domestic Indian] discount as high as $75 in July.”

“Our recent visit to the trade fair in Delhi,” said this week’s precious metals note from specialist consultancy Metals Focus, “suggested a level of optimism for the remainder of this year.”

Rising consumer and investor demand will likely cushion gold’s fall, says a new note from US investment bank and bullion market-maker Goldman Sachs’ commodities chief Jeff Currie.

“We would view a sell-off substantially below $1250 as a strategic buying opportunity.”

Gold priced in Sterling meantime spiked more than 5% higher overnight as the Pound spiked down to fresh three-decade lows on the FX market at the start of Asian trading.

Hitting £1048 per ounce, gold priced in GBP then retreated but held above £1015 per ounce to show a small gain for the week and a 17% gain from June 23rd, Brexit Eve.

Disclaimer

This publication is for education purposes only and should not be considered either general of personal advice. It does not consider any particular person’s investment objectives, financial situation or needs. Accordingly, no recommendation (expressed or implied) or other information contained in this report should be acted upon without the appropriateness of that information having regard to those factors. You should assess whether or not the information contained herein is appropriate to your individual financial circumstances and goals before making an investment decision, or seek the help the of a licensed financial adviser. Performance is historical, performance may vary, past performance is not necessarily indicative of future performance. This report was produced in conjunction with ABC Bullion NSW.