Gold Investing Guide

GOLD NEWS: Market Update Week Ending 23rd March 2012

admin — Tue, 15 May 2012 18:52:44 +0000

Gold rises at end of week despite negative sentiment

Gold closed the week at $ 1661.30, a fraction better than last week’s closing level of $1659.30.

Though global economic news came in mixed this week, with the United States mixed, though more positive than elsewhere, sentiment seemed to turn against gold with the yellow metal hitting a ten-week low of $1628 on Thursday before recovering to post a modest gain on the week.

Poor manufacturing indicators from China and the Eurozone have confirmed announcements from both central banks that their economies are slowing down. Spain’s ability to avoid the need for bailout funds is being questioned as it has agreed a relaxation of deficit reduction targets, and in the UK a drop in retail sales has shown the consumer is weaker than previously thought.

Despite Spain’s latest measures in response to its debt and weakening economy, ECB President Mario Draghi has said this week that he believes the worst is over for the Eurozone countries, though he has admitted that risks remain.

In the United States, continuing improvement in the economic outlook was tempered somewhat this week. Although weekly jobless claims numbers fell to their lowest level for four years and the Conference Board’s leading indicators again rose strongly, house sales have been sluggish and falling.

Ben Bernanke, Fed Chairman, has said that ‘consumer spending is not yet recovered relative to where it was before the crisis’. This assessment is seen as non-inflationary, and negative for gold. Under this backdrop, US Treasury bond yields have continued to rise: a further negative for gold. However, the Fed Reserve Bank of St Louis President, James Bullard, gave impetus to the recovery in the gold price seen on Friday when he indicated that interest rates may need to rise earlier than 2014 as currently being signalled by the Fed.

Not helping gold this week has been the strike by India’s gold dealers protesting at last week’s doubling of import duty. This strike has lasted a week to date, and is estimated to have created a loss of $800 million of business.

This entry was posted on Sunday, March 25th, 2012 at 4:43 pm and is filed under Gold Investing. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

By thegoldeconomy.com

Gold News: Weekly Market Update for Week ending 16th March 2012

admin — Tue, 15 May 2012 18:52:44 +0000

Gold Falls to Lows as Focus turns to Equities

Gold closed the week at a multi week low of $1659.30, down more than 3% on the week..

Economic news throughout the week was generally good in the United States, meaning that investor focus has once more turned to equities. Indeed, America’s major equity indices rose by around 2.5%, recording three and four year highs, with the Nasdaq recovering to levels not seen since the fourth quarter of 2000.

Though industrial output was flat in February, retail sales once more picked up. There are inflationary pressures building, though the Fed believes that these will be short lived. It has said that it continues to see short term interest rates kept on hold until 2014. In response to rising oil prices, the US and Britain have agreed to release some of their strategic reserves in order to increase supply and dampen price pressure.

In further good economic news the US four-weekly jobless claims number remained stable, though a widening trade deficit and a fall in the Michigan Consumer confidence index failed to take the shine off equity markets.

Though there are concerns that Greece will find its austerity measures increasingly difficult to keep, the EU and IMF gave final agreement to the bailout package which means its debt commitments can be met this coming week.

China’s trade balance numbers confirmed its weakening forecast for its economy going forward. A deficit of $31 billion was a large turnaround for January’s $27 billion surplus, and has been attributed to weakening demand for its goods from abroad. At home, the Chinese are seeing a slowing of demand for cars and retail goods as the vagaries of a more capitalist economy start to hit home.

Adding to the gloom surrounding precious metals – silver dropped by around 6% on the week – the Indian authorities have announced that they will be doubling the duty on gold imports from 2% to 4%. This is the second such increase this year, and is expected to reduce demand for gold from one of the largest gold importers in the world. It is estimated that demand could fall by as much as 30% this year.

The eyes of gold investors will be turned to watch if the price of gold can remain above technical support at around current levels through the next few days.

This entry was posted on Sunday, March 18th, 2012 at 8:30 pm and is filed under Gold Investing. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

By thegoldeconomy.com

GOLD NEWS: Weekly Market Review, Week Ending 9th March 2012

admin — Tue, 15 May 2012 18:52:44 +0000

Gold Bounces from Technical Support and Consolidates

Gold closes the week almost unchanged from last week’s close, at $1713.20.

Gold was chased lower in the middle of the week as investment markets plunged with rumors that the Greek debt swap for private creditors had fallen apart. Such an event would have caused the country to miss deadlines for its $130 billion bailout funds, and sent the indebted nation into default. However, Thursday saw the deal accepted by 83% of creditors, and forced upon the majority of the remainder.

Adding to the general gloom was China’s announcement that it expects its growth rate to be just 7.5% from an earlier downwardly revised 8%, and India, Australia, Japan, and Brazil all weighed in with data supporting worldwide economic slowdown. High oil prices amidst Middle East tension are adding to concern, although strong US jobs data is pointing to a better economic situation in America. January’s jobs number was revised upwards, and with February seen to have added another 227,000 jobs, bringing the three-month average to 250,000. However, though seen bullish for the economy, credit data that showed consumer borrowing hitting three year highs at an annualized growth rate of 8.6% should prove positive for inflation hedging assets such as gold and silver.

In China, inflation figures point to an easing of inflationary pressures although with growth slowing the People’s Bank of China may decide to ease monetary policy further by printing more money. This will add to inflation in the medium to longer term and is seen as long term bullish for gold.

Earlier in the week, Hong Kong announced that Chinese imports of gold from Hong Kong had fallen by 15% in January from February, partly as a result of the Lunar New Year.

As the gold price fell on Friday to the $1675 level after the US jobs data release, London dealers noted that buyers for physical gold stepped into the market. The price then bounced strongly off the technical support at around the lows of the day, helped by short sellers covering positions, to finish the week a couple of dollars to the gold at $1713.20.

Whilst the Greek situation has grabbed most of the headlines, the ECB has pumped around €1.3 trillion into the European economy in the last six months, and Germany’s Central Bank has been seen to borrow in large amounts from the ECB. This extra money supply, as it filters through, is likely to lead to higher inflation, which again is bullish for the gold price.

As the Greece situation has, for the time being, been settled, Deutsche Bank was reported as borrowing €10 billion from the ECB loan fund to help fund its operations in Spain and Italy. Clearly, the European sovereign debt fiasco has a long way to play out yet.

This entry was posted on Saturday, March 10th, 2012 at 10:33 pm and is filed under Gold Investing. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

By thegoldeconomy.com

Gold News: Weekly Market Update Week Ending 2nd March 2012

admin — Tue, 15 May 2012 18:52:44 +0000

Gold struggles to remain above $1700

Gold closes the week down 3.4% at $1711.80.

Having spent the beginning of the week marking time, gold was hit hard on Wednesday as the US Fed Chairman, Bernanke, dampened speculation for further monetary easing. Elsewhere, mixed economic news should have proved the catalyst for further gains in the gold price.

While the Greek bailout has been sealed, the EU awaits certain assurances before releasing the full €130 billion. This said, with figures last week showing the European economy retracting further (fourth quarter gdp softened by 0.3%, and industrial manufacturing figures for January showed further shrinkage), the ECB has added another €530 billion to its program of cheap 3 year loans to banks. This brings the total of such lending to €1 trillion in the last three months as the ECB battles financial collapse.

Economic growth in the fourth quarter outdid expectations; though falling durable goods orders in January may point to an easing economy moving forward. Certainly, while Bernanke made no dove like statements for the market to get excited about, he did say that he saw problems for the economy from Europe.

While home prices in the US are falling, oil prices continue to rise, hitting $110 per barrel this week. Further inflationary pressures are expected moving forward as the higher oil prices filter through the economy.

Growth in Asia remains solid but slowing, with the powerhouses of China and India appearing likely to moderate through 2012.

With this backdrop, the fundamentals for gold remain intact. Rising inflation, falling economic growth, easier money in Europe, and broadly negative interest rates should pave the way for further firmness in the gold price.

Gold’s pull back this week stems from a lack of volume as well as Bernanke’s comments, as investors shied away from committing further funds to the yellow metal in a consolidating market.

Bulls of the metal will have been pleased to see the $1690 support level hold on Wednesday, and will hope that it continues to do so if re-tested. If it does then further buying is likely to take the price back to this year’s highs around $1780.

Certainly, as reported by the China Daily, the Bank of China seems convinced of the long-term opportunities of gold as it has partnered with the CME Group to examine the introduction of Yuan denominated futures.

This entry was posted on Saturday, March 3rd, 2012 at 7:32 pm and is filed under Gold Investing. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

By thegoldeconomy.com

Gold News: Monthly Review February 2012

admin — Tue, 15 May 2012 18:52:44 +0000

Gold Consolidates above $1700 as Greece signs up to austerity and US growth continues

With US economic news seen as more positive for stocks as the month opened, gold struggled to maintain its early year momentum, though doveish comments from the US Fed Chairman, Bernanke, sandwiching the trading month has helped sentiment for the medium term outlook for gold in a thin market.

Bernanke has reiterated that problems in the US economy remain, and that the Fed sees danger from the European sovereign debt situation existing for some time to come. He also cited a stubbornly high unemployment rate as problematic for the US economy.

Resolutions, problems, and resolutions in regard to the Greek debt and bailout package have been the main focus of attention through the month, and helped to pull gold back and forth in a tight range. The deal with its private creditors – who will be forced to accept losses on their Greek bonds of up to 70% – finally forced the European Union to agree to the release of the €130 billion bailout in time for debt default to be avoided. The ECB also has leant a further €450 billion in 3 year 1% loans to Europe’s banks, hoping to stave off problems caused by Greece’s agreements.

However, the European Union has now downgraded its growth forecasts for Europe, where it now expects the Eurozone countries to move into a mild recession through 2012. This could cause further problems in debt-laden nations, and the respite for further angst may prove temporary.

The Greek deal, and better than expected economic releases from the Untied States, combined with a firming oil price – where Middle East tensions are rising once more – to help gold post a modest gain on the month.

The gold price seems to be attempting a consolidation above $1700, which many market observers see as bullish for the yellow metal in the longer term. However, it still remains vulnerable to short term shocks and profit taking if volume remain thin. Gold closed the month at $1770, a rise of 1.5% on January’s closing level.

With industrial activity picking up in the United States, silver and platinum both performed more strongly than gold in February. Silver picked up over 4% to end February at $37.23, whilst platinum pushed higher by 6.23% to $1726.

This entry was posted on Friday, March 2nd, 2012 at 11:46 am and is filed under Gold Investing. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

By thegoldeconomy.com

GOLD NEWS: Market Update Week Ending 23rd March 2012

admin — Fri, 11 May 2012 17:21:46 +0000

Gold rises at end of week despite negative sentiment

Gold closed the week at $ 1661.30, a fraction better than last week’s closing level of $1659.30.

By thegoldeconomy.com

Gold News: Weekly Market Update for Week ending 16th March 2012

admin — Fri, 11 May 2012 17:21:46 +0000

Gold Falls to Lows as Focus turns to Equities

Gold closed the week at a multi week low of $1659.30, down more than 3% on the week..

The eyes of gold investors will be turned to watch if the price of gold can remain above technical support at around current levels through the next few days.

By thegoldeconomy.com

GOLD NEWS: Weekly Market Review, Week Ending 9th March 2012

admin — Fri, 11 May 2012 17:21:46 +0000

Gold Bounces from Technical Support and Consolidates

Gold closes the week almost unchanged from last week’s close, at $1713.20.

Earlier in the week, Hong Kong announced that Chinese imports of gold from Hong Kong had fallen by 15% in January from February, partly as a result of the Lunar New Year.

By thegoldeconomy.com

Gold News: Weekly Market Update Week Ending 2nd March 2012

admin — Fri, 11 May 2012 17:21:46 +0000

Gold struggles to remain above $1700

Gold closes the week down 3.4% at $1711.80.

Growth in Asia remains solid but slowing, with the powerhouses of China and India appearing likely to moderate through 2012.

Gold’s pull back this week stems from a lack of volume as well as Bernanke’s comments, as investors shied away from committing further funds to the yellow metal in a consolidating market.

By thegoldeconomy.com

Gold News: Monthly Review February 2012

admin — Fri, 11 May 2012 17:21:46 +0000

Gold Consolidates above $1700 as Greece signs up to austerity and US growth continues

By thegoldeconomy.com