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Commodities Briefing - Category | Bullion/Gold more

Gold looks headed for $980 per ounce

Posted on 12 August 2015 by VRS  |  Email |Print

Gold has dropped below its key support level near $1150, taking it to a new five-and-a-half-year low and setting the next support target near $980. The historical support level for gold is near $1180 so when the price dropped below this level last November many traders expected the price to continue falling towards the next support level near $980.
This did not develop and gold rallied and moved sideways. Historical support near $1180 failed and a new support level developed near $1115, which created a strong support band between $1180 and $1115………………………………………..Full Article: Source

Gold tops $1,100 on September rate hike uncertainty

Posted on 11 August 2015 by VRS  |  Email |Print

Gold rose 1 percent to above $1,100 an ounce on Monday, its biggest increase in more than seven weeks, as the U.S. dollar turned lower and comments from Federal Reserve officials raised uncertainty about a September rate hike.
Atlanta Federal Reserve President Dennis Lockhart said a Fed decision to raise interest rates should come soon, but his prepared speech did not repeat recent comments in which he said he was ready to vote for a rate hike next month. Gold prices have fallen in the second half of this year on the prospect of rising rates, which would lift the opportunity cost of holding bullion while boosting the dollar………………………………………..Full Article: Source

Does gold have a future?

Posted on 11 August 2015 by VRS  |  Email |Print

Had gold peaked at $1,200-1,400 per ounce in 2012, its fall since then might not have been so hard to swallow for gold bulls. As I write this, gold spot price is being quoted at around $1,095 per ounce. The peak about three years ago was around $1,800 per ounce.
Gold bulls, such as yours truly, have been wrong for three years. Many bulls are frustrated and are ready to give up. Of course, capitulation on the part of remaining bulls will always mark a true bottom in any asset price. It is very evident that gold is the anti-dollar. Things are always clearer after the fact………………………………………..Full Article: Source

Gold Suffers Longest Fall in 15 Years. Still Analysts Don’t See Recovery Anytime Soon

Posted on 11 August 2015 by VRS  |  Email |Print

Global gold prices ticked higher on Monday but stayed within striking distance of a 5-1/2-year low, after solid US job gains in July suggested the Federal Reserve could raise interest rates as early as next month.
The metal fell for a seventh week in a row last week, its longest such retreat since 1999, having struggled to pull away from a 5-1/2-year trough of $1,077 reached during a late rout in July. Spot gold was up 0.3 per cent at $1,096.10 an ounce by 0622 GMT, recovering from an early low of $1,089.40. US gold for December delivery gained 0.2 per cent to $1,096 an ounce………………………………………..Full Article: Source

UBS cuts one-month gold price forecast 13% on possible US rate hike

Posted on 11 August 2015 by VRS  |  Email |Print

Piling on the bearish sentiment for gold UBS analyst Joni Teves on Monday cut the Swiss bank’s one-month gold forecast by 13% to $1,050/oz, with the key driver lower a possible interest rate rise in the US. “Our new price forecasts signal our view that there is scope for further downside in gold from here on the back of both macro and gold fundamental factors over a one-month time frame,” Teves said.
The analyst said that the possibility of a US Federal Reserve interest rate increase in September was the key catalyst for the change to the forecast. “We think weakness is likely going to build heading into the FOMC meeting in September. Nevertheless, selling firepower should be relatively limited…Any further weakness should encourage market participants to start seeing value in gold around these lower levels,” Teves said………………………………………..Full Article: Source

The gold rout has stopped, for now

Posted on 10 August 2015 by VRS  |  Email |Print

After the US job market report on Friday, global gold prices recouped losses made in the early part of the week and closed at $1,094/ounce, down 0.15 per cent. The market now believes that the Federal Reserve may not put through multiple rate increases this year.
Data from US department of Labour showed that the non-farm pay rolls rose by 2,15,000 in July against the expected additions of 2,23,000. However, as long as US rate hike fears hang like a sword over gold prices, there can be no sustained relief rally in gold. In the coming few weeks, if signs emerge of a strengthening labour market in the US, this will again fan the market’s expectation of a more than one rate hike in 2015 and gold will take a beating………………………………………..Full Article: Source

Gold Miners Just Aren’t That Special

Posted on 10 August 2015 by VRS  |  Email |Print

Beware gold bugs bearing cheap equities. Thanks to gold’s swift descent, mining stocks have been crushed in the past month. But bargain hunters should tread carefully. While faith in the metal may have dimmed, some vestiges of gold fever remain.
When gold was on the up, it was considered normal that mining stocks traded at a hefty premium to the net present value of their projected cash flows, as well as versus other diversified miners. But how that value was calculated also differed. Analysts and investors, particularly in the U.S. and Canada, routinely used a lower discount rate, of 5% or less, to value gold miners. ……………………………………….Full Article: Source

Gold isn’t a safe haven any more

Posted on 10 August 2015 by VRS  |  Email |Print

Something strange is happening within the gold market. It used to be the first place investors rushed to in a crisis, but that’s changing. An analyst note from Barclays shows investors pulled money from financial derivatives based on the gold price, even as the Greek debt crisis reached its peak in June.
Barclays said $480 million (£310 million) was pulled from the market that month, putting total outflows in the past two months at over $1 billion (£640 million). “There are limited signs of safe-haven demand for gold,” said Barclays. “Since September 2014, gold has underperformed other haven assets such as bunds and US Treasuries.”……………………………………….Full Article: Source

Dollar gold price could break below $1,000/oz early 2016: BoA/Merrill Lynch

Posted on 07 August 2015 by VRS  |  Email |Print

There was more negative research published for gold Thursday, as Bank of America/Merrill Lynch predicted that the metal could break below $1,000/oz heading into 2016. Analyst at the bank Michael Widmer noted that gold prices have shown a persistent lack of strength in recent months “driven by a confluence of factors. Most notably perhaps, physical off-take in India and China.”
Combined the two countries represent roughly 50% of global physical gold demand. China takes the top spot for both gold consumption and production. “India still feels the aftermath of a range of measures aimed at dampening imports to reduce the nation’s current account deficit,” said the analyst………………………………………..Full Article: Source

Traders Have Disappeared From the Gold Market

Posted on 07 August 2015 by VRS  |  Email |Print

As gold continues to languish near its lowest price in five years, one element seems to be missing: traders. Volume so far in August, already a slow time of year, has dropped about 8 percent from 2014. On Thursday, trading was about 40 percent below the 100-day average.
With fewer participants, the metal’s volatility has tumbled to the lowest in nine months. Gold traders are awaiting a U.S. jobs report due on Friday. A gain for employment could push the Federal Reserve to tighten monetary policy sooner, cutting the appeal of bullion because it doesn’t pay interest………………………………………..Full Article: Source

Barrick comments on planning for $900 gold price

Posted on 07 August 2015 by VRS  |  Email |Print

In its second quarter results announcement Barrick Gold Corporation, the world’s largest gold miner in terms of output, cut its dividend by 60% and said it will embark on a program to sell more mines and make deeper cost cuts. Shares in the Toronto-based company was up sharply on Thursday amid a generally positive day for gold miners, but its market value is still down 45% over just the last three months. The company is worth some $8 billion in New York.
Barrick is forecast to produce between 6.1m – 6.4m ounces this year and while it’s had some problems of its own making it is obviously highly exposed to a fall in the gold price. It’s market cap today compares to $64 billion when gold peaked at $1,900 in 2011……………………………………….Full Article: Source

Gold: what next?

Posted on 06 August 2015 by VRS  |  Email |Print

Gold has been going through a rough patch, to say the least. At the end of July, the gold price fell below $1,100 per fine troy ounce. The metal was last at this price in January 2010 and had been as high as $1,900. Many investors had profited from the rise in the price of gold and other commodities after the Global Financial Crisis of 2008, but those who remained invested have seen their investment fall dramatically.
UK investors have seen the sterling value of their gold drop 40% since the 2011 high, and more than 7% this week alone. Remember past performance should not be seen as a guide to future returns………………………………………..Full Article: Source

Gold price continues downtrend on sluggish demand, silver up

Posted on 06 August 2015 by VRS  |  Email |Print

Gold prices remained under selling pressure for the third straight session on the domestic bullion market due to lack of buying support from stockists and retailers in the face of global uncertainty.
In contrasts, silver regained marginally after a sharp overnight plunge on the back of stray industrial demand. Standard gold (99.5 purity) dropped by Rs 75 to end at Rs 24,605 per 10 gm from Wednesday’s closing level of Rs 24,680………………………………………..Full Article: Source

How China Plans to Dominate Pricing in the Gold Market

Posted on 06 August 2015 by VRS  |  Email |Print

The rise of China, the world’s most populous nation, is moving influence and assets from West to East. And this is having a dramatic effect on the gold market. China’s efforts over the last two decades to modernize and urbanize its economy have created a burgeoning middle and upper class with growing disposable income and net worth.
China has a long-time affinity toward gold. For the past several years, it’s consistently been one of the top two gold consumers worldwide. (India holds the title of No. 1 gold consumer – for now.) China is also the world’s largest gold producer. So it stands to reason that China would want to exert more influence over the gold market – and gold prices………………………………………..Full Article: Source

Barrick making plans for $900 an ounce gold price

Posted on 06 August 2015 by VRS  |  Email |Print

Barrick Gold Corporation cuts its gold production forecast to between 6.1m – 6.4m ounces as it disposes of assets including 50% of its Zaldivar copper mine in Chile for $1 billion, the Cowal mine in Australia for $550 million in cash and $298 million for its Porgera mine to tackle its crippling debt-load of more than $13 billion.
The company announced additional disposals on Wednesday announcing that in the next few weeks, it will start a process to sell its Bald Mountain, Round Mountain, Spring Valley, Ruby Hill, Hilltop and Golden Sunlight assets in Nevada and Montana. Other notable features of the quarter and outlook include further cost and capex cuts and plans to weather a $900 an ounce gold price:……………………………………….Full Article: Source

This Precious Metal Needs a Silver Bullet

Posted on 06 August 2015 by VRS  |  Email |Print

Once prized as a precious metal that could be put to practical use, silver is now getting the worst of both worlds. Like gold, silver has lost its shine among investors who are no longer seeking a shield from market turmoil or a store of value to protect against inflation.
Silver’s use as an industrial metal also is on the wane as growth in world economies, particularly China, starts to slow. “Silver is getting whacked from both sides,” said Ed Meir, a commodity analyst with brokerage INTL FCStone. It has added up to a bad few months for all things silver………………………………………..Full Article: Source

Byproduct of metal price meltdown is a higher silver price

Posted on 06 August 2015 by VRS  |  Email |Print

Silver futures trended weaker on Wednesday with September contracts down slightly to exchange hands at $14.55 an ounce in afternoon trade. Like gold, silver went off to the races at the start of the year to hit a 2015 high of $18.36 on January 22 before falling back to trade down 7% for the year. The precious metal is 28% below the level it was trading at a year ago.
A new report by Capital Economics sees a brighter outlook for silver in the second half and out to 2017. The independent research house says one of the primary reasons for the anticipated higher silver price is the nature of silver mine supply………………………………………..Full Article: Source

Is gold doomed?

Posted on 05 August 2015 by VRS  |  Email |Print

After gold declined to a 5-year low, the message is that gold is doomed. Is it really true? In the past few weeks, the price of gold has suffered a significant decline, indicated by multiple technical signals and triggered by China’s disappointing disclosure of its official gold reserves on July 17 and the following heavy selling in the Asian market.
Gold bullion dropped by 6% in July, significantly deteriorating the market sentiment toward the yellow metal. Indeed, the sentiment indexes fell to record lows. It seems that quite a few gold investors threw in the towel, as hedge funds became net-short in gold for the first time since 2006………………………………………..Full Article: Source

5 Extraordinary Things That Will Shake Up Precious Metals

Posted on 05 August 2015 by VRS  |  Email |Print

These are extraordinary times for the precious metals markets. And not just because of the headline price action. Underlying developments in the supply-and-demand fundamentals for physical gold and silver are extraordinary in their own right.
If recent trends could be summed up in one word, it would be bifurcation. On one hand, the paper market (i.e., futures contracts) continues to be heavily pressured in a bearish direction by extraordinary levels of institutional short-selling. On the other, the physical market is heating up with robust investor buying and increasingly bullish long-term supply/demand prospects………………………………………..Full Article: Source

Gold drop on rates bet as palladium sinks to lowest since 2012

Posted on 05 August 2015 by VRS  |  Email |Print

Gold dropped for a second day as commodities slumped to a 13-year low and amid speculation the Federal Reserve will raise interest rates as early as September. Palladium traded at the lowest level since 2012.
Bullion for immediate delivery fell as much as 0.3 percent to $1,083.75 an ounce and was at $1,084.55 at 8:05 a.m. in Singapore, according to Bloomberg generic pricing. Prices have lost 8.4 percent this year. Gold tumbled to a five-year low in July as Fed Chair Janet Yellen said the central bank is on track for raising rates, curbing the appeal of bullion as it doesn’t pay interest like assets such as equities. ……………………………………….Full Article: Source

Platinum falls to six-year low on China concerns, but gold holds steady

Posted on 05 August 2015 by VRS  |  Email |Print

Platinum fell to a six-year low and palladium reached the lowest level since 2012 on speculation that supplies are ample amid slowing demand from China. Gold was little changed. BMW AG has cut production this year by 16,000 cars in China and may revise profitability goals amid slowing sales, the Munich-based manufacturer said Tuesday.
The country accounts for at least 23 percent of global demand for platinum and palladium, which are mainly used in catalytic converters that curb harmful auto emissions, Johnson Matthey estimates. Commodities have slumped as China’s economy expands at the slowest pace in 25 years, leading to gluts in metals, crops and energy. Platinum mine output is rebounding in top producer South Africa after a five-month strike last year………………………………………..Full Article: Source

Gold Declines as Goldman Sachs Says Prices May Drop Below $1,000

Posted on 04 August 2015 by VRS  |  Email |Print

Gold fell, trading near a five-year low, as Goldman Sachs Group Inc. said rising U.S. interest rates may lead to deeper losses. A government report Monday showed American households kept spending in June, capping a stronger quarter for the biggest part of the economy, as incomes rose. The Federal Reserve signaled last week that it will probably raise rates this year as the labor market improves.
Goldman in a report Monday reiterated that gold may fall below $1,000 an ounce, or more than 8 percent below Monday’s closing futures price. Gold tumbled to a five-year low in July as Fed Chair Janet Yellen said the central bank is on track for raising rates for the first time since 2006, curbing the appeal of gold because it doesn’t pay interest like assets such as equities………………………………………..Full Article: Source

Why gold has lost its shine for investors

Posted on 04 August 2015 by VRS  |  Email |Print

The observation that gold has been a disappointing investment of late should come as no surprise to anyone in the investment world. The fact that this has occurred in the context of developments that would normally push gold prices higher is notable. But the most consequential hypothesis of all is that gold may be losing its traditional role in a diversified investment portfolio.
To say that gold has underwhelmed investors the past couple of years is an understatement. It did not participate in the surge upwards in nearly all financial asset prices; and it has not provided protection in the more recent downturn in risk markets………………………………………..Full Article: Source

Gold’s Amazing Resiliency

Posted on 04 August 2015 by VRS  |  Email |Print

Gold has certainly had a rough summer, facing withering selling pressure from record futures shorting. The resulting new secular lows have greatly exacerbated the already-extreme bearish psychology long plaguing this metal. But considering the howling headwinds gold has suffered in recent years, it has actually proved amazingly resilient. This indicates strong latent demand due to accelerate as sentiment shifts.
The consensus view on gold today is overwhelmingly bearish, with virtually everyone convinced it is doomed to spiral lower indefinitely. They argue that gold yields nothing, so therefore why bother owning it? Especially with the first Fed rate hikes in over 9 years looming! As interest rates begin inexorably mean reverting higher, rising yields will leave gold even farther behind. Keynes’ “barbarous relic” can’t compete………………………………………..Full Article: Source

Gold, oil and copper: Is the commodity boom over?

Posted on 03 August 2015 by VRS  |  Email |Print

China’s stock market crash was big news. But lost in the headlines was the commodities rout. Everything from copper to oil, cotton to sugar has been hit. And unlike stock markets, commodities have an impact on everyday lives. From farmers to miners to consumers to governments, lower prices mean less money and fewer jobs. Gold is often seen as a store of wealth in uncertain times. But right now, gold has tumbled below $1,100 an ounce to a five-year low. So what is behind the fall?
With economic growth around the world slowing and expectations of a rise in US interests by the end of the year, the dollar is strengthening - making gold less attractive. That has led some to predict that gold prices could fall to as low as $750 an ounce. That is a far cry from the $1920 it hit during the financial crisis………………………………………..Full Article: Source

Investors Are Far From Sold on Gold

Posted on 03 August 2015 by VRS  |  Email |Print

To understand the stock market, check out the gold market. The two tell a lot about each other. People buy gold when they are afraid of the future. They buy stocks at the opposite time, when they are hopeful. Today, despite worries about China, Greece, a likely Federal Reserve interest-rate increase and an uncertain corporate-earnings outlook, the gold market is giving a clear signal: Investors, on the whole, aren’t very frightened.
The last time gold hit a record, after controlling for inflation, was 1980. It has never been back in inflation-adjusted terms and, at Friday’s close, was 57% below its 1980 peak. The Dow Jones Industrial Average, also adjusted for inflation, last hit a record on May 19. At Friday’s close it was 3.7% off that level………………………………………..Full Article: Source

Gold Bears Entrenched as Bullion Funds Lose Another $6 Billion

Posted on 03 August 2015 by VRS  |  Email |Print

Speculators keep punishing gold. Money managers stayed net-short on bullion for a second week, after going bearish for the first time since the U.S. government data begins in 2006. The value of exchange-traded products tracking gold slumped $6 billion last month, the most since September, data compiled by Bloomberg show.
With prices stuck near a five-year low, traders are turning their back on gold amid muted inflation and a resilient U.S. economy. Since about 40 percent of what’s mined or recycled annually gets sold as coins or bars, shriveling demand from speculators could mean a prolonged bear market. Morgan Stanley says investment buying will keep dropping through at least 2018………………………………………..Full Article: Source

No need to rush to buy gold or silver just yet

Posted on 03 August 2015 by VRS  |  Email |Print

Gold prices are at a five-year low. However, experts feel investors should wait and watch as prices could slide further. Analysts feel this is not the time to go bottom fishing. Global gold pric es touched a 5-year low of $1,090 per troy ounce (31.1 gram) on July 22, down more than 42% from the all-time peak of $1,900 in September 2011.
Though prices bounced back a bit the next day , experts feel more pain is in store. The metal is trading very close to the support level of $1,080. If it falls below $1,080, prices could recede by another 4-8% in the international market. “If the $1,080 support is broken, the next major supports are $1,040 and $990,” says C.P. Krishnan, Whole Time Director, Geojit Comtrade………………………………………..Full Article: Source

Gold’s M&A Wave to Roll On as Bullion Tumbles to Five-Year Low

Posted on 03 August 2015 by VRS  |  Email |Print

Gold’s tumble to the lowest since 2010 promises to prolong a mergers and acquisitions boom that’s seen transactions at a three-year high as weaker prices slash asset valuations. Deals valued at $9.6 billion were proposed or completed in the six months to June 30, up 7 percent on the previous half, as producers including OceanaGold Corp. agreed acquisitions, according to data complied by Bloomberg.
They totaled $22.3 billion last year, the highest since 2011, the data show. “I’d expect that thematic to continue and the next wave of activity from an M&A point of view might be more mergers,” Reg Spencer, a Sydney-based analyst at Canaccord Genuity Group Inc., said……………………………………….Full Article: Source

Prepare for gold prices to plunge…as low as $350

Posted on 31 July 2015 by VRS  |  Email |Print

A prominent gold forecaster predicts the yellow metal will drop to a mere $350 an ounce, a level unseen since 2003. It’s dramatically lower than what most experts are currently calling for. But Claude Erb’s prediction might have merit. Back in 2012, Erb, a former commodities trader at TCW Group, co-authored a landmark research paper with Duke University professor Campbell Harvey that was early to predict gold’s downfall.
At the time, gold was fetching north of $1,600 an ounce. Now it’s trading below $1,100. The paper used historical analysis to show that if gold is an inflation hedge — as many people believe — then it’s extremely expensive at current levels………………………………………..Full Article: Source

Gold has potential to plummet to $700: Strategist

Posted on 31 July 2015 by VRS  |  Email |Print

Gold got little respite from all the bad news surrounding it Thursday, with the price of the precious metal crunching to near a five-and-a-half-year low and two separate analysts telling CNBC that there was little reason to add it to an investment portfolio.
Shaun Port, the chief investment officer at the online investment management company Nutmeg, highlighted that central banks were no longer thirsty for bullion and predicted a hefty fall in price. “I think there’s much further downside for gold from here, potentially through the $1,000 (level) and back to the pre-crisis levels of the sort of $700 or $800 (level),” he told CNBC Thursday………………………………………..Full Article: Source

Study predicts gold could plunge to $350 an ounce

Posted on 31 July 2015 by VRS  |  Email |Print

Gold bugs, who have just begun to digest bullion’s more than $100 drop over the past month, need to prepare for the possibility of an even bigger decline. That, at least, is the forecast of Claude Erb, a former commodities manager at fund manager TCW Group, and co-author (with Campbell Harvey, a Duke University finance professor) of a mid-2012 study that forecast a plunging gold price.
They deserve to be listened to, therefore, since — unlike many latter-day converts to the bearish thesis — they forecast a long-term gold bear market when it was only just beginning. You might think that, with gold now trading more than $500 lower than when the study was released, Erb would declare victory and leave well enough alone. But Erb is doing nothing of the sort. Earlier this week, he told me that the gold community now needs to consider the distinct possibility that gold will trade for as low as $350 an ounce………………………………………..Full Article: Source

Gold could sink to $800: Yamada

Posted on 31 July 2015 by VRS  |  Email |Print

Gold just can’t get a bid. The precious metal fell near 5½-year lows on Thursday after the second-quarter GDP number showed the U.S. economy is growing at a steady rate and comments from Fed Chair Janet Yellen on Wednesday pointed to the notion of a September rate hike.
Gold is now down 13 out of the past 15 trading sessions, and according to one highly regarded technician, it’s about to get even worse. “I think we have to recognize that gold is in a structural bear market,” Louise Yamada, managing director of Louise Yamada Technical Advisors, said Thursday on CNBC’s “Futures Now.”……………………………………….Full Article: Source

The Real Reason Gold Prices Are Falling

Posted on 31 July 2015 by VRS  |  Email |Print

Gold is in the news for all the wrong reasons at the moment. The price of the metal tumbled this month, maintaining its downward trend for the year. In fact, bullion had its worst month in over two years in July. At US$1,092, an ounce of gold is now worth what it was back in 2010.
Its future prospects, if analysts are to be believed, are worse still. A recent Bloomberg survey suggested that prices could drop to US$984 an ounce by January. That would represent a 10% decline from its present price point. A separate Bloomberg survey highlighted that over half of respondents believe gold is heading for its third consecutive annual loss in 2015………………………………………..Full Article: Source

World Gold Council recommends retaining India’s current hallmarking model

Posted on 31 July 2015 by VRS  |  Email |Print

World Gold Council on Thursday recommended that India’s current hallmarking model, built around independent hallmarking and assay centres, should be retained. In addition it recommended six key actions should be taken to improve the efficiency and effectiveness of the current system:
WGC recommended that the governance around the hallmarking process should be strengthened and there should be a customer awareness drive about hallmarking.There is a need to incentive and facilitate targeted expansion of hallmarking centres. It has also suggested to use BIS data to develop a ratings system for jewellers………………………………………..Full Article: Source

Here’s Why Silver Prices are About to Soar

Posted on 31 July 2015 by VRS  |  Email |Print

If you’re looking to get rich in precious metals, this might be the most important message you’ll ever read. Because today, I’m going to show you why silvers prices could soon soar through the roof. If you want to get in on this opportunity, then you have to act fast.
Let me explain. If you take a look at what has been going on in the silver futures market, you’ll see that the grey metal is being oversold. At the beginning of this year, open interest in silver futures was around 150,000 contracts. Open interest refers to the number of futures contracts that are not closed or delivered. By July 28th, open interest in silver futures increased to around 190,000. That was a 26.7% increase in a less than seven months!……………………………………….Full Article: Source

Forget whether $100 silver is possible, how about $1000?

Posted on 31 July 2015 by VRS  |  Email |Print

I don’t know of many charts out there that a bullish investor since 2011 would look at with more disgust than the silver chart. It has been an exceptionally painful experience for those bullishly inclined since 2011. In fact, silver has dropped 70% from its 2011 heights to its recent lows, and it is still not done. But this story certainly has a “silver lining” for those who are willing to be a bit more patient.
On Aug. 30, 2011, I wrote my first public column about silver, which called for a market top in silver with a shorting target of 42.90, and that it must remain below 44.30 for the downside to ensue. Within the same column, I provided a downside target of 26.80 in the futures………………………………………..Full Article: Source

Here’s what the rout in gold prices means for the market

Posted on 30 July 2015 by VRS  |  Email |Print

Lots have been said about the recent decline in gold prices. Most of it deals with the fundamentals of gold itself, such as mine closures, supply and demand, and the like. The rest involves the technical side, such as long-term trends and moving averages. But there are other sides to this story.
For example, gold is usually sought when inflation starts to heat up. When the economy first emerged from the Great Recession, gold rose in price, figuring that inflation would eventually rise — not just from the greater demand for metals and other commodities that usually accompanies a stronger economy, but from all the liquidity that the Federal Reserve had to create in order to push the economy forward………………………………………..Full Article: Source

Deutsche: Gold price has another 30% to fall – and soon

Posted on 30 July 2015 by VRS  |  Email |Print

On Tuesday gold stabilized but hovered near five-and-half year lows struck last week after a closely watched report showed global gold demand at the lowest in six years , followed by a prediction of a 30% fall from today’s levels.
Futures contracts in New York with August delivery dates were exchanging hands for $1,095.10 an ounce in after hours trade on Tuesday and flat compared to yesterday’s close in another day of light trading as anxious investors look for fresh direction for the metal………………………………………..Full Article: Source

Gold price not being driven by fundamentals

Posted on 30 July 2015 by VRS  |  Email |Print

Since around mid-June, gold prices have come under substantial selling pressure. One of the main drivers behind this fall has been the on-going debate about interest rates. While the general narrative supposes that higher interest rates will have a negative impact on gold, I have often stated that this assumption is not correct.
The historical record shows that gold tends to rise with nominal interest rate rises – as was seen from 2004 to 2008 and in the 1970s – and the Fed is unlikely to raise rates in any meaningful way while deflationary forces persist. According to the WGC, although higher interest rates would make the dollar more attractive to investors looking for higher-yielding assets, the current narrative that this scenario would be bearish for gold is incorrect………………………………………..Full Article: Source

HSBC downgrades 2015 gold price forecast

Posted on 30 July 2015 by VRS  |  Email |Print

HSBC has significantly downgraded its 2015 average gold price forecast, following the brutal sell-off seen in the market one week ago. HSBC now predicts that gold will average $1,160 per ounce in 2015 from $1,234 previously. The bank has also lowered its 2016 forecast by five percent from $1,275 per ounce to $1,205.
Nonetheless, the bank still believes that in the end, gold will recover from current levels, it said. Gold recently slumped to levels not seen since March 2009 at $1,077 per ounce, following a bear-raid on the market during early trading hours in Asia and what was the most illiquid period of business in the week………………………………………..Full Article: Source

Warren Buffett once said that Gold is a way of going long on fear. Do you agree?

Posted on 30 July 2015 by VRS  |  Email |Print

The world market was awash with a swarm of gold bugs after the financial crisis of 2008. Gold bugs are advocates of investments in Gold as a safe haven and a guard against financial Armageddon, hyperinflation, currency collapses and geopolitical troubles.
A few years ago, gold bugs argued the precious metal was a can’t-miss investment given the ultra-loose monetary policies around the world and the prospect of higher inflation. However, you can’t find many gold bugs as the metal prices have taken a big tumble. The cumulative returns since 2010 for gold HAS almost BEEN nil compared to a return of 70 per cent by Dow Jones Industrial Average and 57 per cent by BSE S&P Sensex………………………………………..Full Article: Source

Why Gold Will Fall to $1,020

Posted on 30 July 2015 by VRS  |  Email |Print

After a relatively uneventful few months for the gold market, prices broke out of their six-month range in dramatic fashion last week. Gold’s fall below the crucial USD1,130/oz level has seen the metal trade to a fresh five-year low of USD1,078/oz in recent days. While the market has since gained some composure, we expect further downside to ensue given the significant shift in market positioning.
Market positioning is reflecting a renewed negativity towards gold. While our short-term forecast of USD1,100/oz was met recently, we were surprised at the manner in which it occurred, having previously expected a gradual grind lower………………………………………..Full Article: Source

Gold price to average $1135/oz in Q3 – GFMS

Posted on 29 July 2015 by VRS  |  Email |Print

The gold price will average $1,135 per ounce in the third quarter of this year, GFMS said in its latest Gold Survey report, and $1,175 in the fourth quarter. This compares to a second quarter average of $1,192 per ounce and current spot gold price of $1,095.
The third quarter is widely expected to see the first increase to US interest rates since 2008. Higher interest rates in theory would push many gold investors into more yield-bearing assets such as bonds. GFMS on the other hand believes that much of the action has already been priced into gold, and that the first increase will in actual fact push the metal’s price higher………………………………………..Full Article: Source

Gold Demand Lowest Since 2009

Posted on 29 July 2015 by VRS  |  Email |Print

Demand for gold fell to its weakest level since 2009 in the second quarter, as Chinese buyers shunned purchases, the metals consultant GFMS said. “Almost all major physical gold markets suffered in the second quarter,” the London-based research firm, a unit of Thomson Reuters, said Tuesday in commentary published with its latest GFMS Gold Survey.
Physical gold demand fell 14% from a year ago, with demand for bars and coins falling 12%, and demand for jewelry declining 9%, it said. The decline in consumption came despite a 7.5% fall in average U.S. dollar gold prices. A cheaper dollar makes it more affordable for people with other currencies to buy gold………………………………………..Full Article: Source

Gold continues to shine in India, loses sheen in world

Posted on 29 July 2015 by VRS  |  Email |Print

World gold demand hit a six-year low in the April-June quarter of the current calendar year on weak demand from China. A survey conducted by global research firm Thomson Reuters GFMS showed that the world gold demand nose-dived 14 per cent during April-June 2015 at 858 tonnes compared with 1,000 tonnes in the corresponding quarter last year.
Gold demand in the April-June 2015 quarter showed a decline of 15 per cent from the previous quarter. Jewellery consumption in India rose 2.5 per cent year-on-year (y-o-y) to 158 tonnes. Retail investment was steady y-o-y at 50 tonnes. However, it surged from the first quarter on buying related to Akshaya Tritiya………………………………………..Full Article: Source

HSBC downgrades 2015 gold price forecast by six percent

Posted on 29 July 2015 by VRS  |  Email |Print

HSBC has significantly downgraded its 2015 average gold price forecast, following the brutal sell-off seen in the market one week ago. HSBC now predicts that gold will average $1,160 per ounce in 2015 from $1,234 previously. The bank has also lowered its 2016 forecast by five percent from $1,275 per ounce to $1,205.
Nonetheless, the bank still believes that in the end, gold will recover from current levels, it said. Gold recently slumped to levels not seen since March 2009 at $1,077 per ounce, following a bear-raid on the market during early trading hours in Asia and what was the most illiquid period of business in the week. ……………………………………….Full Article: Source

As Commodities Tumble, Don’t Count Out Gold

Posted on 28 July 2015 by VRS  |  Email |Print

The commodity collapse is undeniable. Just look to 2015 year-to-date returns: Oil has shed 16%, Nickel is down 25%, wheat has lost 15%, and sugar has plunged 28%. Yet the plunge in commodity prices doesn’t seem to be occurring in unison with the pace of global economic activity.
Precious metals seem the most oversold as judged by CFTC managed money speculative positions – perhaps the reasoning for Monday’s $9 bounce in COMEX August futures, which have gold at $1094.50, or $22.20 higher than Friday’s contract low price of $1072.30………………………………………..Full Article: Source

Gold price recovers from five-year lows

Posted on 28 July 2015 by VRS  |  Email |Print

The price of gold is hovering around the $1,100 mark after hitting five-and-a-half year lows last week. Gold mining stocks bounced back on Monday morning after gold prices recovered from five-and-a-half year lows. On Friday, gold prices plunged to an intra-day low of $1,077 as investors offloaded the metal amid expectations that the US Federal Reserve will soon raise interest rates, thus making it a less attractive investment.
But after five consecutive weeks in negative territory, the gold spot price crept back towards the $1,100 mark on Monday morning as the weaker dollar helped it recover. However, investors and analysts indicated they were not convinced by the improving gold price………………………………………..Full Article: Source

HSBC cuts 2015, 2016 gold price forecasts

Posted on 28 July 2015 by VRS  |  Email |Print

HSBC strategists on Monday lowered their average annual gold price forecasts for this year and next, warning that gold prices are likely to remain under pressure in the short term and may “move within striking distance of $1,000″ an ounce before recovering. HSBC lowered its 2015 average annual price forecast to $1,160 from $1,234 and for 2016 to $1,205 from $1,275.
Among the reasons for gold’s recent selloff is the “drift towards Fed tightening and the associated USD strength, low global inflationary pressure, weak gold demand from India and China and market positioning and momentum,” HSBC strategists said………………………………………..Full Article: Source

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