Blog posts tagged with 'gold falls'

Gold falls, heads for weakest week since June on Fed, Syria

Paul’s Economic Outlook:

The U.S. is moving back to a normal monetary policy to free investment capital for a recovering economy lead by the energy industry.

Suggested Reading: 

PRECIOUS-Gold falls, heads for weakest week since June on Fed, Syria

Fed meeting is September 17-18. They will probably do a token taper. Syria will be swept under the carpet and forgotten for now. Dollar up and gold down.


US businesses boost stockpiles as sales grow

U.S. Private sector (70% of U.S. GDP) is recovering.


Natgas exports become the next step in US energy evolution

The energy industry is leading the U.S. private sector recovery.


Gold slides to four-week low as investors sidestep bullion

Gold slides to four-week low as investors sidestep bullion

Gold hit a four-week low on Thursday, declining for a sixth straight day for the first time in more than four years, as investors spooked by recent price falls favoured other assets.

Prices touched a low of $1,369.29 an ounce, though they pared losses after downbeat U.S. economic data weighed on stocks and the dollar, both of which have hit significant highs this week.


Oil falls below $94 a barrel amid high supplies

Oil price falls below $94 a barrel amid plentiful crude inventories, inauspicious US, EU data


US Dollar Rally Unfazed by a Japan GDP Beat


Gold Prices Fall Through $1,400/Oz As Market Breaks Technical Chart Support

Gold Prices Fall Through $1,400/Oz As Market Breaks Technical Chart Support

By Debbie Carlson of Kitco News
Wednesday May 15, 2013 11:35 AM

(Kitco News) - Gold prices fell through the psychologically important $1,400-an-ounce level during mid-morning North American trade on Wednesday, triggering some pre-placed sell orders.

At 11:22 a.m. EDT, Comex June gold futures were at $1,393.30 an ounce, down $31.20, and hit their lowest level since April 19.

Prices were under pressure for the entire session and were creeping lower when values slipped through the psychological support level of $1,400. This triggered pre-placed sell orders, known as sell stops, advancing weakness a bit further, market watchers said.

Analysts said there wasn’t anything in particular that sparked Wednesday’s losses, but it was just a continuation of the weakness that has plagued gold lately: a firmer U.S. dollar index and a lack of interest to buy commodities. Crude oil was also weaker, as were base metals.

“The market is its own worst enemy. It is lacking positive momentum, which is keeping bulls on the sidelines. The dollar is stronger. Buyers have just evaporated,” said Sterling Smith, futures specialist, commodity research, Citibank Institutional Client Group.

The general strength in the stock market is also an issue weighing on gold, said Sean Lusk, gold and precious metals analyst at Ironbeam.

“The stock market is up what, 14%? That’s pulling people from gold,” Lusk said.

When gold prices broke through $1,400, the major stock indexes were weaker, but since then index values turned higher.

Silver and the platinum group metals were also weaker with gold. Smith said although silver is the loss leader for Wednesday, this selloff is gold-inspired. “Gold is the leader. Silver is getting kicked around like a little beat-up soccer ball,” he said.

Lusk said gold also has not reacted bullishly to news that previously would be considered bullish, particularly announcements in the past few weeks about central banks, such as the Bank of Japan, the Reserve Bank of Australia and South Korea’s central bank all either enacting some monetary stimulus or lowering interest rates.

“When a market can’t rally on bullish news, that’s a problem,” he said.

Technical price charts are also bearish for gold. Lusk said gold needed to try and get back above $1,500 last week to regain some upside momentum, but it never came close to that area.

Both Smith and Lusk said a close under $1,400 by the June gold contract opens the door to further weakness. Both put the next support level at the $1,380 to $1,385 area. Smith said after that is some support at $1,365.

However, if prices fall under there, the next floor is the major support level from mid-April, $1,321.50, which was the low after the big April sell-off, both said. If the market falls to there, how gold acts in that region will be telling. If it holds support, buying could come back in; however, Smith said, if it breaks that April low, “the world will get interesting.”

He said a break under $1,320 may lead to further losses as interested buyers may step back to see just how far prices might fall before coming back in.

Gold Tumbles Again: Is the Era of Gold Over?

By Bernice Napach | Daily Ticker – 3 hours ago

Gold plummeted to just below $1,400 an ounce Monday morning, its lowest price since March 2011. Slower than expected first quarter growth in China was the catalyst for today's drop (following a $60 decline last week on reports that Cyprus is planning to sell some of its gold reserves). Gold is now trading 27% below its September 2011 high of $1,920.

“Gold is kind of giving up,” says Michael Haigh, global head of commodities research at Societe Generale. "Gold is a different animal than the rest of the commodities complex, driven primarily by macrodrivers,” and those macro-drivers now are driving gold prices lower.

Haigh says the bull case for gold "doesn’t look like a great idea anymore especially with the dollar strengthening and real interest rates expected to rise” at some point because of extensive quantitative easing. In addition, inflation pressures have yet to emerge and gold didn’t push through $2,000 an ounce as many thought it would and because the macroeconomy looks stronger.

“China doesn’t look like it’s going to have a hard landing," Haigh said ahead of Sunday 7.7% GDP report. "People are fatigued with Europe and the U.S. looks like it’s doing okay.”

In an April 2 report titled "The End of the Gold Era," Societe Generale forecast gold ending the year at $1,375 an ounce. In a note published eight days later Goldman Sachs forecast gold at $1,450 an ounce by year end, but said the decline could be larger.

The Daily Ticker contacted Societe Generale and Goldman Sachs to check if either was updating its year-end price target given today's near $100 drop in gold prices. Haigh at Societe Generale says the bank is not changing its $1,375 year-end forecast but notes that "some gold miners will get into hot water" if prices continue to plummet. Goldman Sachs hasn't responded yet to our request yet.

Whether gold continues to fall and how far will depend in large part on inflation expectations. Haigh says earlier market forecasts for higher gold prices were fed largely by expectations that aggressive central bank quantitative easing (buying assets) would lead to high inflation, but that hasn't happen.

In the U.S. consumer prices rose 2% on an annualized basis according to the latest available data for February 2013. That’s slightly above the 1.7% rate for all of 2012 but lower than 3% recorded for 2011. Japan recently announced it too would adopt quantitative easing in order to boost growth—and inflation—but Haigh isn't convinced that will boost global inflation.

“If you get renewed quantitative easing globally, then obviously there are inflationary pressures there," Haigh says. "But even with these extensive and extended periods of times of QE we really haven’t seen any inflation surface [but] rather just central bank balance sheets growing."

And in the U.S., he notes, some Fed officials have been pushing for an earlier exit from quantitative easing.

Even if inflation doesn't rise, there are limits to how far the price of gold—or any commodity—can fall. “Prices can’t continue to fall below the cost of production for an extended periods of time,” says Haigh.


Japan central bank revamps policy to boost economy

Paul’s Economic Outlook:

Watch for a stock market correction in second quarter and a 2nd stock market correction when the Federal Reserve raises interest rates. The rest of the world is debasing the currency. The U.S. started to change policies from debasing to strengthening since October 2011 (71 points to 83 points in a year and a half). This trend will excelerate.

Suggested Reading:

Japan central bank revamps policy to boost economy
Spin article. Yen down, dollar up, gold down.

Modest Jobs Growth Expected to Continue
U.S. Private Sector (70% of U.S. GDP) is adding jobs. The Public Sector (30% of U.S. GDP) is losing jobs. Dollar up, gold down.

Kitco Metals Roundup: Sell Off in Gold Continues as Prices at 10-Month Low; Serious Chart Damage Inflicted
Dollar up, gold gown.

Video Interview

Power Trading Radio interview with Paul Buzby on Precious Metals & Rare U.S. Coins

Gold falls on upbeat U.S. economic data

Gold falls on upbeat U.S. economic data, Bernanke
The private sector (70% US GDP and 25% of world GDP) is the only place showing growth.

Stockton could become biggest city to go bankrupt
Pain growing in city, county and states. More bankruptcies to come.

U.S. announces diplomatic breakthrough with North Korea
Nuke program is very expensive. They chose food over bombs.

College costs: Time to rethink higher education
The next bubble will be government backed student loans.

Rhetoric on Oil Prices Flares: Boehner vs. White House
Non-existent and failed energy programs for last 30 years is over. Private businesses are building an energy plan in spite of Federal government.

Greek unions hit back at minumum wage cuts
Already breaking austerity promises.

Students, police clash in Spanish city Barcelona
Already breaking austerity promises.

Comex Gold Falls On Bernanke Remarks; Profit-Taking Cited Ahead Of $1,800 Region
Dollar up, gold down, long term.