Gold gained for the first time in three days on demand for a haven as investors bought metal through funds at the fastest pace in almost six years.
Weakening global equities along with the prospect that the Federal Reserve may delay raising interest rate increases are luring investors back into gold. Inflows into US listed exchange-traded funds tracking precious metals are heading for the biggest monthly increase since 2011 data compiled by Bloomberg show. Holdings in global bullion-backed ETFs jumped 49.8 metric tons in the past two days, the most since May 2010, and are equal to almost a week of mine production, according to Commerzbank.
Gold has rebounded from a five-year low set in December, becoming this year’s best-performing commodity, as global market turmoil prompted traders to push back expectations for further US interest-rate increases. The prospect of lower-than-expected borrowing costs – along with volatile equity and currency markets – is reviving bullion’s appeal as a store of value.
“The main driver in gold trade is safe-haven buying,” said Bob Haberkorn, a senior market strategist at RJO Futures in Chicago. “Investors are worried right now about the Fed.”
Gold for immediate delivery added 1.3 per cent to $US1223.98 an ounce at 3.27pm in New York. Gold futures for April delivery advanced 1 per cent to settle $US1222.60 on the Comex in New York. Prices are up 15 per cent this year.
“As long as financial markets remain fragile and Fed rate hikes remain elusive, inflows will continue,” Carsten Fritsch, an analyst at Commerzbank in Frankfurt, said by email. “It is a clear shift in investor sentiment and therefore an important sign.”
Holdings in global ETPs rose 24.4 tons to 1665.2 tons as of Monday, the highest in almost a year, data compiled by Bloomberg show. They’re up 203.7 tons this year, more than investors sold throughout all of 2015.
Investors are seeking shelter in gold as money exits equities and other assets. Inflows into US-listed ETFs backed by the precious metal reached $US4 billion so far this month, heading for the biggest expansion since July 2011. That compares with $US15.589 billion flowing out of international and domestic equities so far in February, according to data compiled by Bloomberg. All asset classes reported net outflows this year except for commodities and fixed income.
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Gold Sees Good Gains Amid Renewed Slides in World Equities, Crude Oil
(Kitco News) – Gold prices were ending the U.S. day session higher Tuesday, on a good corrective bounce from the solid selling pressure seen Monday. Some more trader and investor anxiety surfaced Tuesday, which led to fresh buying interest in safe-haven gold. The gold market bulls continue to show resilience amid the recent price uptrend on the daily chart. April Comex gold was last up $13.70 at $1,223.80 an ounce. March Comex silver was last up $0.066 at $15.25 an ounce.
World stock markets were weaker Tuesday. Once again, equities markets are being heavily influenced by the daily price movements in the crude oil futures markets. Nymex crude oil futures posted solid gains on Monday, but most of those gains were taken back Tuesday, partly due to the Saudi Arabian oil minister reportedly saying at a conference in the U.S. that his country is not willing to reduce its crude oil production. Also, an International Energy Agency report issued Tuesday said even if U.S. oil shale production declines, and OPEC and Russia start to reel in their oil production levels, it would still likely take a couple of years to work through the present oil glut worldwide.
There were also renewed concerns about the world financial and banking sector Tuesday. JP Morgan shares were under pressure Tuesday on reports that big banking firm is in some trouble with its energy loans.
China is still a focal point for world traders and investors. Chinese officials Tuesday lowered the value of the Chinese yuan currency against the U.S. dollar. Later this week the Group of 20 industrial nations meets, and China’s economic issues are likely to be a major topic.
Technically, April gold futures prices are in a two-month-old uptrend on the daily bar chart and the bulls have the overall near-term technical advantage. A bullish symmetrical triangle pattern has formed on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at the February high of $1,263.90. Bears’ next near-term downside price breakout objective is closing prices below solid technical support at $1,150.00. First resistance is seen at today’s high of $1,228.90 and then at $1,235.30. First support is seen at the overnight low of $1,207.60 and then at $1,200.00. Wyckoff’s Market Rating: 6.5
March silver bulls and bears are now on a level near-term technical playing field, after the recent selling pressure. Silver bulls’ next upside price breakout objective is closing March futures prices above solid technical resistance at the February high of $15.99 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.50. First resistance is at this week’s high of $15.37 and then at $15.57. Next support is seen at today’s low of $15.17 and then at this week’s low of $14.945. Wyckoff’s Market Rating: 5.0.
Gold prices tacked on 1% on Tuesday to recoup more than half of what they lost a day earlier, as declines in global stock markets and sharp losses for oil spurred investors to buy into assets perceived as safe.
Gold futures for April delivery GCJ6, +0.65% jumped $12.50, or 1%, to settle at $1,222.60 an ounce, posting its fourth gain in five sessions. Silver for March SIH6, +0.59% delivery rose 5.6 cents, or 0.4%, to $15.24 an ounce.
Prices for gold had lost 1.7% Monday as broader optimism in the financial markets translated into rallies for risk assets such as equities and oil, but a pullback for gold.
However, that sentiment was reversed on Tuesday as U.S. equities DJIA, -1.14% SPX, -1.25% fell. Asian SHCOMP, -0.81% and European SXXP, -1.22% also dropped.
“Over the last week or so, gold has been in a phase of digestion as a ‘risk-on’ trade across assets, around the globe has seen demand for the safe-haven asset fade,” said Tyler Richey, co-editor of The 7:00’s Report.
But Tuesday’s drop in oil prices CLJ6, -1.57% thanks to comments from Saudi Oil Minister Ali al-Naimi that he welcomes new supplies in the face of a continuing global glut, “has seen the bid in gold return,” said Richey. Read:Why comments by Saudi Arabia’s al-Naimi slammed oil futures
“In the very near term, volatility will continue to be the driver of the gold market and if risk appetites continue to fade this week, the well-defined uptrend in gold is poised to continue with key support lying between $1,190 and $1,200 an ounce,” he said.
Meanwhile, the People’s Bank of China weakened the yuan by the most in six weeks, according to media reports. The move was seen as yet another sign of a slowing in the Chinese economy and adds to fears the world’s second-largest economy could cut its imports. China is the world’s second-largest economy and one of the largest commodity importers.
The news put pressure on copper, which saw its March contract HGH6, -0.21% edge down by a penny, or 0.5%, to finish at $2.106 a pound after a $2.09 low.
April platinum PLJ6, +0.10% rose $15.70, or 1.7%, to $943.50 an ounce, while March palladium PAH6, +0.11% added $1.40, or 0.3%, to $500.05 an ounce.
(Kitco News) – Gold prices ended the U.S. day session with solid gains Thursday. Some early profit-taking was overcome by bargain hunters buying the dip and by fresh chart-based buying interest—both of which coincided with the U.S. stock indexes coming under selling pressure. April Comex gold was last up $14.10 at $1,225.60 an ounce. March Comex silver was last up $0.048 at $15.42 an ounce.
Most world stock markets were higher Thursday, following the lead of higher crude oil prices that climbed close to $32.00 a barrel. However, U.S. stock indexes started to weaken in late-morning trading and were posting losses in afternoon trading Thursday.
Still, this week has seen a strong rebound in world stock markets, following selling pressure early this year that recently drove most stock indexes into, or close to, bear market territory. There are now technical clues the major U.S. stock indexes have put in market bottoms. Gold and silver bulls should be impressed their metals were able to hold up fairly well this week, in the face of better risk appetite in the marketplace.
Iran reportedly said Thursday it will not cut its crude oil production as part of a plan laid out earlier this week by Saudi Arabia, Russia and other world crude oil exporters. However, other reports said Iran was still listening to its counterparts on the issue. Iraq has also not committed to such a plan. Reports said discussions among OPEC producers and Russia are ongoing. Oil-exporting nations’ economies have been crippled by the plunge in crude oil prices that past year and a half. Nymex crude oil prices were down from the earlier daily high, which in turn put some downside pressure on U.S. stock indexes.
Technically, April gold futures prices closed nearer the session high. Bulls gained fresh upside technical momentum today. Prices are in a two-month-old uptrend on the daily bar chart and bulls have the overall near-term technical advantage. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,263.90. Bears’ next near-term downside price breakout objective is pushing prices below solid technical support at this week’s low of 1,191.50. First resistance is seen at today’s high of $1,228.80 and then at this week’s high of $1,236.30. First support is seen at $1,214.40 and then at $1,210.00. Wyckoff’s Market Rating: 6.5
March silver futures prices closed nearer the session high today. The silver market bulls have the overall near-term technical advantage and are also showing resilience this week. Prices are in a four-week-old uptrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at the October high of $16.41 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.64. First resistance is seen at $15.50 and then at this week’s high of $15.74. Next support is seen at this week’s low of $15.155 and then at $15.00. Wyckoff’s Market Rating: 6.0.
March N.Y. copper closed steady at 207.55 cents today. Prices closed nearer the session high today. The copper bears have the firm overall near-term technical advantage. Copper bulls’ next upside breakout objective is pushing and closing prices above solid technical resistance at the February high of 213.80 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the contract low of 193.55 cents. First resistance is seen at this week’s high of 208.50 cents and then at 210.00 cents. First support is seen at 205.00 cents and then at this week’s low of 203.75 cents. Wyckoff’s Market Rating: 2.5.
Gold futures rallied Thursday, as U.S. stocks struggled to rally after registering three straight days of sharp gains.
April gold GCJ6, +0.41% gained $14.90, or 1.2%, to settle at $1,226.30 an ounce, after settling modestly higher on Wednesday, just minutes before the Fed minutes were released at 2 p.m. Eastern Time.
The belief that the Fed might not raise benchmark interest rates at its next meeting in March amid mounting concerns about the stability of global markets and low-inflation fears has fostered a bullish stance among gold buyers. An extended period of low rates tends to be beneficial for precious metals that don’t offer a yield.
U.S. stock investors appeared to re-evaluate the dovish statements from the Federal Open Market Committee’s January minutes against the backdrop of a U.S. and world economy that is showing signs of weakening—all fundamentally bullish factors for gold.
U.S. economic data on Thursday was mixed. A gauge of manufacturing in Philadelphia, known as the Philly Fed index, showed manufacturing contracted for a sixth straight month, while jobless claims fell to their lowest level since November.
“I’m not a believer that the equity rally is sustainable and that higher oil prices [which has recently been bullish for stock prices] are sustainable,” said Peter Hug, global trading director at Kitco Metals.
Indeed, pessimism over the state of the economy here and abroad has lured gold bidders.
“The visible confusion in the global economy combined with rapidly fading expectations over the Fed raising U.S. rates anytime soon has provided a foundation for gold to find support above the $1190 dynamic support, wrote Lukman Otunuga, research analyst at FXTM in a Thursday research note.
Otunuga sees gold stretching toward $1,263 an ounce, on the back of concerns about China’s sluggish economy, volatility in stocks and gyrations in crude-oil markets CLH6, -0.62% which are viewed as a litmus for global economic health.
However, on the bearish side, a Wednesday note from Bank of America Merrill Lynch BAC, -2.55% said that although physical demand has been strong, a lack of appetite from big gold buyers in India and China, which just finished its Lunar New Year, is concerning.
“…The lack of gold demand from India and China, which could exacerbate price upside, remains a wrinkle,” BAML commodity strategists led by Michael Widmer, wrote.
Despite the two-day run, gold is eyeing its first weekly loss, down 0.6%, in four weeks, according to FactSet data.
Meanwhile, March silver SIH6, +0.02% gained 5.5 cents, or 0.4%, to finish at $15.432 an ounce, while high-grade copper for March delivery HGH6, -0.05% was little changed at $2.0735 a pound.
In other metals on Comex, April platinum PLJ6, +0.25% was off $4.10, or 0.4%, to close at $945.60 an ounce, while March palladium PAH6, +0.05% was $11.05, or 2.1%, lower to settle at $$504.85 an ounce.
LONDON: Gold eased on Thursday as a run higher in equities tempered upward momentum in the precious metal, though uncertainty over the direction of US monetary policy helped to keep prices above $1,200 an ounce.
Strength in the dollar, which rose half a per cent against the euro, added to pressure on the precious metal.
Spot gold was down 0.1 per cent at $1,207.71 an ounce at 1438 GMT, while US gold futures for April delivery fell 0.3 per cent to $1,208.30.
Stock markets firmed in Europe and opened higher in the United States as benchmark Brent crude oil prices rose nearly 3 per cent. Sharp losses in oil and stocks drove gold to a one-year high at $1,260.60 an ounce last week.
“$1,260 was too high an increase in a short period of time. Gold was overbought,” LBBW analyst Thorsten Proettel said. “What we’ve now seen is a consolidation. I would expect the gold price (retreat) to go deeper. After that gold can move to higher regions, but right now we need to let this consolidation pass.”
Inflows into gold-backed exchange-traded funds (ETFs), holdings of which have already risen this year by more than they fell in the whole of 2015, showed investor appetite has sharpened, analysts said.
Financial market volatility has increased expectations that the Federal Reserve may hold off hiking interest rates further this year. Gold fell 10 per cent last year in anticipation of the Fed lifting rates for the first time in nearly a decade.
Minutes from the US central bank’s last policy meeting, released on Wednesday, showed Fed policymakers worried last month that tighter global financial conditions could hit the US economy and considered changing their planned path of interest rate hikes in 2016.
They still expect to raise rates this year and even discussed a rise at the Jan. 26-27 policy meeting, but were divided over how to interpret financial market volatility.
Gold tends to benefit from lower rates, which cut the opportunity cost of holding non-yielding assets.
“At the moment there’s enough support in terms of negative interest rates and further flows into ETFs to suggest that for the time being as gold consolidates, prices will be well supported,” Societe Generale analyst Robin Bhar said. “There’s still huge debate about how the Fed will approach interest rate increases.”
Silver was down 0.1 per cent at $15.25 an ounce, while platinum was down 0.9 per cent to $936.06 and palladium was down 0.7 per cent to $507.51.