Gold rallies 2 percent to record, equity rout persists

One kilogram gold bars are seen in this picture illustration taken at the Korea Gold Exchange in Seoul August 9, 2011.

Gold prices rallied more than 2 percent to a record highs on Friday as investors sought refuge from a second day of hefty losses on the stock markets, hurt by deepening concerns over slowing economic growth and the outlook for euro zone banks.

A raft of weak economic data this week has sparked heavy selling of equities and cyclical assets like industrial commodities. European shares extended losses on Friday after posting their biggest one-day fall since March 2009 on Thursday.

"At the moment the market is just looking for relative safe havens," said Mitsui Precious Metals analyst David Jollie. "You can see that in the sell-offs across equity markets overnight. The strength of gold is the other side of the coin from that."

Spot gold was up 2.1 percent at $1,862.26 an ounce at 0918 GMT, having peaked at $1,867.30 an ounce. It is on track for its biggest one-month rise in nearly 12 years in August and is up 31 percent so far this year.

Germany's blue-chip Dax index slid 4.1 percent to a 21-month low on Friday, while Britain's FTSE 100 fell below the 5,000 mark. Investors spooked by the slide flocked to government bonds and gold as a haven from risk.

German government bonds pushed higher and looked set to scale new record peaks as shares tumbled. U.S. Treasuries, another perceived safe haven, also rose.

Most raw materials also fell. Oil tumbled, with U.S. crude futures down nearly $3 a barrel and Brent crude off 1.7 percent, while base metals also declined.

"As long as uncertainty on financial markets remains high and the situation does not calm, gold should retain its status as a store of value and the price should continue to climb," said Commerzbank in a report on Friday.

BROAD-BASED SURGE

Gold's surge was broad-based, with the precious metal hitting record highs in dollars, sterling, euros, yen and, for the first time since mid-2010, Swiss francs.

Gold prices have rallied sharply in the safe-haven franc since the Swiss National Bank announced fresh measures to counter strength in the currency on August 10.

It held close to its record even as the Swiss franc rose, benefiting from demand for currencies perceived to offer a safe haven. Its gains were capped by ongoing speculation Swiss authorities will again step in to curb the currency's strength.

The euro meanwhile fell broadly on Friday on the back of a sell-off in European shares, after a raft of weak U.S. economic data and concerns about European banks drove investors away from stocks and into U.S. Treasuries. The dollar, the world's most liquid currency, edged higher.

The latest gold rally came as fresh buyers were attracted to the market, analysts said.

"Macro hedge funds were noted buyers and may also have dominated demand during yesterday's Comex sweeps, which accounted for much of the price action," said UBS in a note.

"Generally, these players have been on the sidelines in recent months, waiting for a better opportunity to buy; with a proper correction failing to materialize, their patience has probably run out. If participation from the macro hedge fund community has only just started to accelerate, this adds a new dynamic to the gold market."

The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, said on Thursday its holdings rose by nearly 15 tonnes from the day before.

Other precious metals also broadly benefited from gold's rise, with platinum rising to its highest since early May, up 2 percent at $1,873.99 an ounce, and silver climbing 1.8 percent to $41.30.

Some investors are still buying platinum on the back of a gold:platinum ratio near 1, analysts said, although this trade made less sense now than in previous years as platinum, an industrial metal, faces a soft demand picture.

"With the economic outlook deteriorating we would not be surprised to see downward pressure on prices emerge," said ScotiaMocatta in a monthly report.

Palladium meanwhile bucked the trend for gains, remaining flat at $751.47 an ounce.

Sources : http://www.reuters.com/article/2011/08/19/us-markets-precious-idUSTRE7781Q420110819

Gold; Resistance and Pivot Point 19-08-2011

Gold
19- 08 – 2011 Gold open at Level 1823.79

Resistance 3: 1858.95
Resistance 2: 1847.94
Resistance 1: 1836.02

Pivot Point: 1825.01

Support 1: 1813.09
Support 2: 1802.08
Support 3: 1790.16

Daily forecast is valid until 02:00 pm (GMT +7)

Gold; Prediction, Resistance and Support 18-08-2011

Gold
18 - 08 – 2011 Gold open at level 1791.18

Resistance 3: 1811.93
Resistance 2: 1803.36
Resistance 1: 1796.43

Pivot Point: 1787.86

Support 1: 1780.93
Support 2: 1772.36
Support 3: 1765.43

Daily forecast is valid until 02:00 pm (GMT +7)

My Prediction "Today" is possible Gold can go down to S2 - S3 ... until 02:00 pm (GMT +7)

Resistance and Support 17-08-2011

Gold
17- 08 – 2011 Gold open at level 1784.76

Resistance 3:  1816.80
Resistance 2:  1802.00
Resistance 1:  1794.10

Pivot Point: 1779.30

Support 1: 1771.40
Support 2: 1756.60
Support 3: 1748.70

Daily forecast is valid until 02:00 pm (GMT +7)

Barclays Favors Buying Copper, Corn, Crude Oil And Gold

(Kitco News) -Tightening supplies for commodities, even in the face of reduced global growth, should keep resource markets supported, and investors should focus on commodities where demand is strong and supply risks are a concern, said Barclays Capital on Tuesday.

The bank said in a research note it prefers long positions in copper, corn and crude oil and it suggests additional protection to economic uncertainty by buying gold.

The second –half of 2011 is expected to be a bumpy ride for investors, said Barclays Capital, with volatility likely as global growth should slow. “The outlook remains uncertain as markets come to grips with recent developments and access the potential effects on global growth. Our economists continue to expect the global economy, and the U.S., to avoid a double-dip recession. However, it has become clear that the global economy cannot generate wealth at the pace originally forecasted by the markets,” they said, estimating global GDP at 3.8% year-over-year in 2011, versus 5% in 2010.

Commodities markets will have an “increasingly important” influence in setting the pace for global growth, especially with supply struggling to keep up with demand in several important energy and food markets. “The vulnerability of commodity supply to geopolitical shocks, bad weather and labor disruptions has rarely been higher,” they said.

They said investors can best position themselves with a long position in Brent crude oil futures and London Metal Exchange copper, but they said to avoid near-term volatility to buy deferred contracts. They also recommend buying corn.

Gold is also rated a buy, which continues the long position already recommended by the bank.

“Supportive factors include physical exchange-traded product flows picking up strongly on the recent worsening in financial market conditions and central banks buying gold once more. Gold also looks likely to benefit in a range of different market scenarios. If Europe’s debt problems continue to mount prices are certain to go higher, but the cure to this issue and that of lackluster growth in the U.S., looks certain to result in further currency debasement which should also prove positive for the yellow metal,” they said.

Barclays sees gold hitting $2,000 an ounce on three factors: macroeconomic insecurity on the back of heightening sovereign debt risks and credit downgrades, a sharp acceleration of broad investment demand, which was mostly absent in the first half of 2011 and  central bank buying has returned and from new corners in sizeable tranches, a trend that is set to continue. “We now expect prices to average $1,800 in the second of 2011 and $2000 in 2012,” they said.

They are cautious on silver, noting the record amount of supply scrap on the market and record mine output. Still, because they are bullish on gold, silver should benefit from investment demand. “But should it ease, we would expect prices to remain volatile until they find physical support on the downside,” they said.

Barclays forecasts silver prices to set a fresh annual average high in 2011 at $36.70 an ounce and to remain elevated in 2012 at an annual average of $35. “However, as the investment demand growth slows, the market will look to the physical market for support, where consumers of the metal are likely to enter at much lower levels,” they said.

Their forecast for platinum is for it to average at $1,808 an ounce in 2011 and to extend their gains to an annual average of $1,835 in 2012. “Barring near-term pressure, platinum prices are likely to break to the upside toward the end of the year, as actual and potential disruptions mean that supply is struggling to keep pace with demand,” they said.

Palladium prices are expected to set a new record annual-average high in 2011 at $798 an ounce and to extend its gains into 2012 and average $860 an ounce, they said. The palladium market should see a second year of supply deficits of 112,000 ounces.


Sources : http://www.kitco.com/reports/KitcoNews20110816DC_barclays.html

Gold steady; eyes on Franco-German summit

SINGAPORE, Aug 16 (Reuters) - Spot gold held onto the gains
made in the previous session on Tuesday as dismal U.S. data
added to concerns about economic growth, while investors wait
for a meeting between France and Germany for any solutions to
the euro zone debt crisis.   
       
    FUNDAMENTALS   
    * Spot gold was little changed at $1,764.09 an ounce
by 0021 GMT, after rising 1 percent in the previous session.   
    * U.S. gold GCcv1 rose half a percent to $1,767.20 an
ounce.   
    * The largest gold fund players including hedge fund titan
John Paulson stuck with their bullion bets in the second
quarter, opting not to follow George Soros who further reduced
his gold ETF holdings.    
    * Holdings of the SPDR Gold Trust , the world's largest
gold-backed exchange-traded fund, stood at 1,260.173 tonnes by
Aug. 15, unchanged from Friday.    
    * The latest U.S. data showed manufacturing in the New York
area contracted for the third straight month in August, boding
ill for growth prospects.    
    * Investors are eyeing a meeting between France's Nicolas
Sarkozy and Germany's Angela Merkel on how to make the euro zone
work more effectively amid persistent doubts in financial
markets over Europe's ability to solve its sovereign debt
crisis.    
    * Spot platinum gained 0.4 percent, on course for its
sixth consecutive session of gains, its best run since January.   
      
    MARKET NEWS   
    * Wall Street stocks rose for a third day on Monday as
investors saw Google's offer for phone maker Motorola Mobility
as an excuse to jump back into the market after weeks of sharp
selling.    
    * The euro hovered below a two-week high against the Swiss
franc hit in the previous session on speculation the Swiss
National Bank may take action to curb gains in the currency by
setting an exchange-rate target this week, while the dollar
index edged up 0.1 percent.    
          
    DATA/EVENTS   
 0600  Germany   GDP flash yy             Apr 2011 
 0900  EZ        Eurostat trade nsa, EUR  Jun 2011 
 0900  EZ        GDP flash estimate yy    Apr 2011 
 1145  U.S.      ICSC chain stores yy     Weekly   
 1230  U.S.      Import prices mm         Jul       
 1230  U.S.      Build permits: change mm Jul       
 1230  U.S.      House starts mm: change  Jul      
 1230  U.S.      Housing starts number mm Jul       
 1315  U.S.      Industrial output mm     Jul        
   
    PRICES   
 Precious metals prices at 0021 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1764.09   -0.91   -0.05     24.28
  Spot Silver        39.68   -0.16   -0.40     28.58
  Spot Platinum    1810.24    6.79   +0.38      2.42
  Spot Palladium    749.49    5.19   +0.70     -6.26
  TOCOM Gold       4363.00   62.00   +1.44     17.00        28654
  TOCOM Platinum   4512.00   41.00   +0.92     -3.92         3400
  TOCOM Silver       97.50    1.30   +1.35     20.37          318
  TOCOM Palladium  1875.00   -6.00   -0.32    -10.59           46
  COMEX GOLD DEC1  1767.20    9.20   +0.52     24.33         3554
  COMEX SILVER SEP1  39.70    0.39   +1.00     28.31         1605
  Euro/Dollar       1.4429
  Dollar/Yen         76.77
  TOCOM prices in yen per gram. Spot prices in $ per ounce.
  COMEX gold and silver contracts show the most active months

Sources : http://af.reuters.com/article/metalsNews/idAFL3E7JG01Q20110816

Gold Resistance and Support 16/08/2011

Gold
Today is Tuesday, 16 - 08 – 2011 Gold open at level 1766.26

Resistance 3: 1817.33
Resistance 2: 1793.74
Resistance 1: 1779.77

Pivot Point: 1756.18

Support 1: 1742.21
Support 2: 1718.62
Support 3: 1704.65

Daily forecast is valid until 02:00 pm (GMT +7)

Gold extends dip from record as risk appetite firms

LONDON, Aug 12 (Reuters) - Gold prices fell on Friday,
extending the previous session's retreat from record highs as
fresh strength in equity markets and gains in the euro versus
the safe-haven Swiss franc pointed to sharper appetite for risk.   

Spot gold was down 1.7 percent at $1,735.64 an ounce
at 1340 GMT. It is still on track for its best weekly
performance since November 2009, however, and has risen 22
percent so far this year on a potent mix of concerns over U.S.
and euro zone debt levels and economic growth.   

The precious metal hit a record $1,813.79 an ounce early on
Thursday. Investors remain jittery over the outlook for the U.S.
economy, which could eventually spark a fresh rally in gold,
analysts said.   

"Near term, a correction makes sense in relation to other
safe havens," said Macquarie analyst Hayden Atkins. "Gold has
traded in lockstep with U.S. government debt in particular. As
Treasuries have risen, gold has basically gone the same way."   

"The question is, if people are more concerned about the
sovereign risks around the United States, added into the
problems elsewhere, will that relationship break down?    

"That is what you would need for the gold price to go higher
-- for people to be reflecting their concerns more in gold than
in safe havens in general."   

Gold hit a session low of $1,734.90 an ounce after Wall
Street stocks rose at the open after data showed U.S. retail
sales posted their biggest gain since March last month.    

A rebound in stock markets in recent days has diverted some
investment from gold.   

The world's largest gold-backed exchange-traded fund, New
York's SPDR Gold Trust , reported its biggest one-day
outflow since Jan. 25 on Thursday, with its holdings declining
by 23.6 tonnes, worth some $1.3 billion at current prices.   

"Some ETF investors clearly view the recent gold's sharp
price rally as exaggerated and have taken profits as financial
markets calm," said Commerzbank in a note.

OUT IN FORCE   

But overall risk-averse buyers have been out in force this
week, putting gold on track for its biggest one-week rise in
nearly two years, up 4.4 percent.   

In the week ended Aug. 10, two of the largest gold ETFs,
SPDR and the iShares Gold Trust , had their fourth-biggest
week of net inflows, data from Lipper showed on Thursday.
    
On the physical market, robust investment demand in Asia
helped gold premiums in Hong Kong and Singapore remain steady.
    
"The gold market remains underpinned by the movement to
physical gold, which has persisted all week," said UBS in a
note. "European demand for small bars particularly, but also
coins, remains very strong. As the week has progressed Asian
physical demand, outside India, has been noticeably higher.   

"We have also observed among existing and indeed new clients
this week a growing preference towards allocated gold instead of
metal account/unallocated gold. This is quite obvious among our
wealth management and private clients, but even among the fund
industry, interest in allocated gold is growing again.   

"The move to real assets such as gold in physical form
signifies the heightened state of risk aversion at present."   

While investment remains high, relatively little gold scrap
is being returned to the market, with much readily available
metal already having been sold.    

Among other precious metals, silver was down 0.5
percent at $38.51 an ounce.    

The gold:silver ratio, or the number of ounces of silver
needed to buy an ounce of gold, held near 46 on Friday, close to
its highest since early February, as silver underperformed gold.   

Meanwhile, spot platinum was up 0.7 percent at
$1,795.20 an ounce, while spot palladium was up 0.7
percent at $743 an ounce.   

Platinum prices edged back above those of gold after the two
metals reached parity for the first time since late 2008 early
this week, but gold may still regain its premium over platinum
if risk aversion rises once more, lifting gold as a safe-haven
and weighing on platinum as an industrial metal.

Sources : http://www.reuters.com/article/2011/08/12/markets-precious-idUSL6E7JC0A920110812

Germany must defend the euro

By George Soros
The opinions expressed are his own. Financial markets abhor uncertainty; that is why they are now in crisis mode. The governments of the eurozone have taken some significant steps in the right direction to resolve the euro crisis but, obviously, they did not go far enough to reassure the markets.
At their meeting on July 21, the European authorities enacted a set of half-measures. They established the principle that their new fiscal agency, the European Financial Stability Fund (EFSF), should be responsible for solvency problems, but they failed to increase the EFSF’s size. This stopped short of establishing a credible fiscal authority for the eurozone. And the new mechanism will not be operative until September at the earliest. In the meantime, liquidity provision by the European Central Bank is the only way to prevent a collapse in the price of bonds issued by several European countries.
Likewise, Eurozone leaders extended the EFSF’s competence to deal with banks’ solvency, but stopped short of transferring banking supervision from national agencies to a European body. And they offered an extended aid package to Greece without building a convincing case that the rescue can succeed: they arranged for the participation of bondholders in the Greek rescue package, but the arrangement benefited the banks more than Greece.
Perhaps most worryingly, Europe finally recognized the principle – long followed by the IMF – that countries in bailout programs should not be penalized on interest rates, but the same principle was not extended to countries that are not yet in bailout programs. As a result, Spain and Italy have had to pay much more on their own borrowing than they receive from Greece. This gives them the right to opt out of the Greek rescue, raising the prospect that the package may unravel. Financial markets, recognizing this possibility, raised the risk premium on Spanish and Italian bonds to unsustainable levels. ECB intervention helped, but it did not cure the problem.
The situation is becoming intolerable. The authorities are trying to buy time, but time is running out. The crisis is rapidly reaching a climax.
Germany and the other eurozone members with AAA ratings will have to decide whether they are willing to risk their own credit to permit Spain and Italy to refinance their bonds at reasonable interest rates. Alternatively, Spain and Italy will be driven inexorably into bailout programs. In short, Germany and the other countries with AAA bond ratings must agree to a eurobond regime of one kind or another. Otherwise, the euro will break down.
It should be recognized that a disorderly default or exit from the eurozone, even by a small country like Greece, would precipitate a banking crisis comparable to the one that caused the Great Depression. It is no longer a question whether it is worthwhile to have a common currency. The euro exists, and its collapse would cause incalculable losses to the banking system. So the choice that Germany faces is more apparent than real – and it is a choice whose cost will rise the longer Germany delays making it.
The euro crisis had its origin in German Chancellor Angela Merkel’s decision, taken in the aftermath of Lehman Brothers’ default in September 2008, that the guarantee against further defaults should come not from the European Union, but from each country separately. And it was German procrastination that aggravated the Greek crisis and caused the contagion that turned it into an existential crisis for Europe.
Only Germany can reverse the dynamic of disintegration in Europe. That will not come easily: Merkel, after all, read the German public’s mood correctly when she made her fateful decision, and the domestic political atmosphere has since become even more inhospitable to extending credit to the rest of Europe.
Merkel can overcome political resistance only in a crisis atmosphere, and only in small steps. The next step will likely be to enlarge the EFSF; but, by the time that step is taken, France’s AAA rating may be endangered. Indeed, by the time Germany agrees to a eurobond regime, its own AAA standing may be at risk.
The only way that Europe can escape from this trap is by acting in anticipation of financial markets’ reactions, rather than yielding to their pressure after the fact. This would require intense debate and soul-searching, particularly in Germany, which, as the EU’s largest and best-rated economy, has been thrust into the position of deciding the future of Europe.
That is a role that Germany has been eager to avoid and remains unwilling to accept. But Germany has no real choice. A breakdown of the euro would precipitate a banking crisis that would be beyond the global financial authorities’ ability to control. The longer Germany takes to recognize this, the higher the price it will have to pay.
George Soros is Chairman of Soros Fund Management and of the Open Society Institute. This piece comes from Project Syndicate.

Sources :  http://blogs.reuters.com/great-debate/2011/08/12/germany-must-defend-the-euro/

Gold Resistance and Support

Gold
Today is Monday, 15- 08 – 2011 Gold open at level 1746.70

Resistance 3: 1815.36
Resistance 2: 1792.43
Resistance 1: 1769.46

Pivot Point: 1746.53

Support 1: 1723.56
Support 2: 1700.63
Support 3: 1677.66

Daily forecast is valid until 02:00 pm (GMT +7)

Gold Drops for Third Straight Day as Equities Rebound Trims Haven Demand

Gold declined for a third day, set for the worst losing run in seven weeks, as concern eased that the global economy is stalling, boosting global equities and cutting demand for haven investments.
Immediate-delivery bullion shed as much as 1.1 percent to $1,728.40 an ounce, and traded at $1,739.42 at 9:20 a.m. in Singapore. Gold, which reached a record $1,814.95 on Aug. 11, is still 22 percent higher this year on debt woes in Europe and the U.S. The metal in Swiss francs climbed to an all-time high today.
The MSCI Asia Pacific Index rose for the first day in three after Japan’s economy contracted less than estimated in the second quarter, adding to signs of a rebound from a record earthquake and tsunami in March. U.S. retail sales climbed the most in four months in July, while applications for jobless benefits were the lowest since April, reports showed last week.
“Gold prices remained under pressure as investors continued to shift back into equities at a measured pace,” James Steel, an analyst at HSBC Securities USA Inc., wrote in a note to clients.
December-delivery gold also dropped for a third day, losing as much as 0.7 percent to $1,730.80 on the Comex in New York, as higher margins on contracts encouraged sales. CME Group Inc. (CME), the largest futures market, hiked initial- and maintenance margins, or the minimum amount of cash that investors must keep on deposit, by 22 percent from the close of trade on Aug. 11.

Hedge Funds

Exchange-traded product holdings decreased for a second day on Aug. 12 to 2,182.083 metric tons, after reaching a record 2,216.756 tons on Aug. 8, Bloomberg data show. Hedge funds and other money managers trimmed their net-long gold positions by 18 percent to 203,573 contracts in the week to Aug. 9, data from the U.S. Commodity Futures Trading Commission showed.
In Europe, the Stoxx Europe 600 Index trimmed its third weekly drop last week after France, Spain, Italy and Belgium imposed bans on short selling to stabilize markets amid speculation the region’s debt crisis may spread to France. In Swiss francs, gold reached a record 1,371.79 francs today.
Cash platinum climbed for a fifth five day, gaining as much as 0.2 percent to $1,800.50 an ounce. Spot silver declined as much as 1.1 percent to $38.6875 an ounce, while palladium was little changed at $746 an ounce.

Sources : http://www.bloomberg.com/news/2011-08-15/gold-declines-for-third-straight-day-as-equity-rebound-trims-haven-demand.html