30-March-2015 Everyday Sydney Gold and Silver Prices
Gold Price $1545/oz, $49.67/g
Silver Price $21.85/oz, $0.70/g
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By Neils Christensen of Kitco News
Gold is ending the Friday session down from recent highs and with both month and quarter ending next week, some analysts are expecting prices could trade lower in a “hesitant” marketplace and shortened trading week.
According to analysts, short-term traders appear to be ending the week by taking their profits after prices pushed to a four-week high on Thursday. Comex April gold futures ended Friday in modestly negative territory at $1,199.80 an ounce, down 0.42% on the day. However, despite Friday’s weaker session, gold futures ended its second straight week in positive territory, up 1.4% since Monday.
Silver futures are also off Thursday’s highs and settled Friday’s session at 17.069. However, the precious metal outperformed gold as it ended the week up 1.87%.
George Gero, vice president and precious-metals strategist for RBC Capital Markets Global Futures, said that this week’s drive to $1,219.50 an ounce created some volatility during options expiration Thursday. He added that a lot of options traders, who were in the money with $1,200, put options at the start of the week and had to abandon their contracts yesterday. Those investors will be hesitant to jump back into the market right away, he said.
“A lot of money in the options market disappeared because of Thursday’s rally,” he said.
Gero added that open interest Friday morning dropped by 17,000 contracts, and the lack of interest could cause gold prices to drift lower in the near-term.
“Funds right now are just trying to square their books for the quarter end,” he said.
Adam Button, currency analyst at Forexlive.com, agreed that the gold market looks hesitant but there could be more downside risk for the yellow metal as the U.S. dollar appears to be ending its short-term correction.
“The bounce we saw this week in gold faded pretty quickly so I don’t think that is a good sign for the market,” he said. “I think it is only going to take a little bit of good news for the U.S. dollar to rally again.”
Although gold could struggle in the face of a stronger U.S. dollar, Adrian Day, president and chief executive officer of Adrian Day Asset Management, warned investors to not underestimate gold’s safe-haven appeal, which could override U.S. dollar strength.
Saudi-coordinated military airstrikes in Yemen Wednesday and Thursday caused gold to rally on safe-haven flows and Day said that the market will be sensitive to any rise in geopolitical tensions.
“This isn’t getting the news that it should and if this becomes a focus again next week then I would expect gold to benefit,” he said.
Along with geopolitical issues, Day said that he expects gold prices to remain volatile next week as the market reacts to data in anticipation of potential Federal Reserve rate hikes. He adds markets continue to go back and forth between a June rate hike and a September rate hike or that any potential hikes may be pushed back even farther.
“There is a lack of action from the Fed. There is nothing for traders to really hang their hat on and that will keep gold traders hesitant,” he said.
“The Fed is waiting for the perfect moment but the longer they wait to make a decision the harder it will be for them.”
Julian Jessop, head of commodity research at Capital Economics said that a long with uncertainty in the Middle East, Greece’s negotiations could also create a safe-haven bid for gold next week.
The highlight for data next week will be Friday’s nonfarm payrolls; however, markets will be closed for Good Friday so reaction to the data will be delayed until Monday.
The market will not be without any March employment data. On Wednesday, private payrolls process ADP will release their data for March. Usually this report only gets a cursory glance from analysts and economists because it is not a reliable predictor of the official numbers.
However, Gero said that he expects the ADP employment report to get a lot more focus. He also added the data would have to be a lot worse than expected to change the current Fed narrative of eventual rate hikes.
“Even if employment is weaker than expected, the Fed is not going to base their decision on just one data point,” he said. “The economy is still strong enough that I think we could still get a ho-hum employment report.”
According to a three-month survey, most Kitco readers were correct in predicting gold’s range by the end of the first quarter, closing the book on a relatively volatile three months.
January saw gold prices rise from $1,184 an ounce to a high of $1,307.80 an ounce, its best start to the year since 2012; however, those gains quickly evaporated in February with prices by mid-March prices dropping to a low of $1,141.60.
However, concerns over future Federal Reserve rate hikes and geopolitical tension have helped create a late-quarter drive, pushing prices to end Friday just below $1,200 an ounce?.
Out of 2,051 participants, 742 participants, or 36%, said that prices would end the quarter below $1,200 an ounce. In second place, 650 readers, or 32%, said that gold would end up between $1,200 and $1,299 an ounce. The two bullish camps were in a statistical tie at 16% with 321 readers seeing gold trading between $1,300 and $1,399 an ounce and 338 readers seeing gold ending the first quarter above $1,400 an ounce.
The voting results showed an interesting pattern as most readers only became more negative on gold prices after prices dropped below $1,200 an ounce in mid-February. Until then, most readers had expected gold to trade in a range between $1,200 and $1,300 an ounce. As expected, readers were most bullish at the end of January just after prices hit a near five-month high.
Although there are still a few days left until the end of the quarter, not many economists are optimistic that gold will be able to push high and end the quarter above $1,200 an ounce.
George Gero, vice president and precious-metals strategist for RBC Capital Markets Global Futures, said that he expects open interest in the futures option market to continue to fall as the futures market rolls over to the next contract on Monday and Tuesday. He added that lower investor interest is slightly negative for gold prices in the near-term.
“I expect prices to slowly trade either side of $1,200 an ounce next week,” he said. ““Funds right now are just trying to square their books for the quarter end,” he said.
WASHINGTON (AP) — Federal Reserve Chair Janet Yellen said Friday that continued improvement in the U.S. economy means an increase in the Fed’s key interest rate could come later this year.
But Yellen stressed that any rate increases would likely be very gradual.
The Fed has kept its benchmark rate at a record low near zero for more than six years. Yellen said in a speech in San Francisco that the time to start raising the rate could occur “sometime this year,” though she said that time hasn’t yet arrived.
She said that when the Fed does start raising rates, policymakers expect the increases to be “rather gradual” for the next few years. Yellen said Japan’s experience over the past 20 years argues for a cautious approach. Over that time, Japan has struggled with anemic economic growth as well as deflation — a period of falling prices that’s been hard for its policymakers to overcome.
Yellen said a key reason for a gradual approach to higher rates is that the danger of raising them too fast is greater than the risk of doing so too slowly. If the Fed were to tighten loan rates too quickly, the economy could stall and, with rates still relatively low, the Fed would have little room to cut them.
But she did say that taking a “gradualist approach” to raising rates carries its own risks. One is the possibility that it might undermine the Fed’s credibility as an inflation fighter and could risk instability in financial markets by allowing an excessive buildup in borrowing.
“At this point, the evidence indicates that such vulnerabilities do not pose a significant threat, but the (Fed) is carefully monitoring developments in this area,” she said.
Yellen’s comments offered elaboration on signals the Fed sent after its March policy meeting last week. It said then that it was content to move slowly to raise rates because it wanted to see further improvement in the job market and an increase in inflation levels.
Inflation recently has fallen further below the Fed’s 2 percent target for annual price increases.
On Monday, Fed Vice Chairman Stanley Fischer said in a speech in New York that he expected the central bank to start raising rates sometime this year.
Both Yellen and Fischer stressed the Fed’s expectation that rate hikes would be gradual and that the Fed’s action would depend on how the economy performs in coming months.
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Today, Dr Marc Faber gave insights into his strategies for protecting and growing wealth in 2014 and beyond. In the webinar, some of the topics covered with Dr Faber included:
* Why he now believes that gold manipulation is a strong possibility
* Technical risks of bitcoin and assets and money intermediated and dependent on technology?
* Asian investment opportunities and why he likes Vietnam, Thailand, Hong Kong and Singapore
* Western stagnation or collapse?
* How to own precious metals?
* Dollar cost average or lump sum?
* Take profits/ rebalance or buy and hold for long term?
* Allocations to precious metals?
* Favoured asset allocation?
* Other investment and business opportunities?
* The yuan as global reserve currency?
* Why small is beautiful when it comes to economies, nations and currencies.
* Ireland, Spain, Italy, Greece and others should consider leaving the euro and returning to national currencies.
The interview was as informative as ever and Dr Faber took the time to answer some questions from participants.
COLORADO SPRINGS, CO / ACCESSWIRE / March 26, 2015 / Gold Resource Corporation (NYSE MKT: GORO) (the “Company”) declares its monthly instituted dividend of $0.01 per common share for March 2015 payable on April 23, 2015 to shareholders of record as of April 13, 2015. Gold Resource Corporation is a gold and silver producer with operations in Oaxaca, Mexico and exploration in Nevada, USA.
The Company has returned over $103 million to shareholders in monthly dividends since commercial production commenced July 1, 2010, and offers shareholders the option to convert their cash dividends and take delivery in physical gold and silver. For more information on Gold Resource Corporation’s physical dividend program, visit the Company website at http://goldresourcecorp.com/gold-silver-dividends.php.
Dividends may vary in amount and consistency or be discontinued at the Board of Directors’ discretion depending on variables including but not limited to operational cash flows, Company development requirements and strategies, construction, spot gold and silver prices, taxation, general market conditions and other factors described in the Cautionary Statements below and the Company’s public filings with the U.S. Securities and Exchange Commission.
Gold Resource Corporation is a mining company focused on production and pursuing development of gold and silver projects that feature low operating costs and produce high returns on capital. The Company has 100% interest in six potential high-grade gold and silver properties at its producing Oaxaca, Mexico Mining Unit and exploration properties at its Nevada, USA, Mining Unit. The Company has 54,179,369 shares outstanding and no warrants. Gold Resource Corporation offers shareholders the option to convert their cash dividends into physical gold and silver and take delivery. For more information, please visit GRC’s website, located at www.Goldresourcecorp.com and read the Company’s 10-K for an understanding of the risk factors involved.
This press release contains forward-looking statements that involve risks and uncertainties. The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. When used in this press release, the words “plan”, “target”, “anticipate,” “believe,” “estimate,” “intend” and “expect” and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, without limitation, the statements regarding Gold Resource Corporation’s strategy, future plans for production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material. All forward-looking statements in this press release are based upon information available to Gold Resource Corporation on the date of this press release, and the company assumes no obligation to update any such forward-looking statements. Forward looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. The Company’s actual results could differ materially from those discussed in this press release. In particular, there can be no assurance that production will continue at any specific rate. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the Company’s 10-K filed with the SEC.