Gold continued to rally in the early part of Thursday’s Asian session as the U.S. dollar traded lower against its major rivals.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery rose 0.96% to USD1,255.35 per troy ounce in Asian trading Thursday after settling up 0.68% at USD1,251.85 a troy ounce in U.S. trading on Wednesday.
Gold futures were likely to find support at USD1,224.85 a troy ounce, Monday's low, and resistance at USD1,300.55, the high from June 24. Wednesday’s U.S. session was shortened in advance of the Independence Day holiday.
Gold traded higher Wednesday despite some positive economic data points that could give the Federal Reserve room to begin tapering its USD85 billion-a-month bond-buying program in the near future. Fears that a stronger U.S. economy could bring about tapering prompted gold’s 24% second-quarter plunge, the yellow metal’s worst quarterly performance in multiple decades.
In U.S. economic news out Wednesday, weekly jobless claims fell 5,000 to a seasonally adjusted 343,000 last week. The less volatile four-week moving average dropped by 750 to 345,500, according to the U.S. Labor Department.
Payroll provider ADP said private employers added 188,000 new jobs last month. Heavy gains were seen in construction and small-business. The Labor Department delivers the June jobs report Friday before the open of U.S. markets.
The Institute for Supply Management said its services index fell to 52.2 last month from 53.7 in May. Economists expected a June reading of 54.
Elsewhere, Comex silver for September delivery surged 2.39% to USD19.770 per ounce while copper for September delivery inched up 0.05% to USD3.175 per ounce.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery rose 0.96% to USD1,255.35 per troy ounce in Asian trading Thursday after settling up 0.68% at USD1,251.85 a troy ounce in U.S. trading on Wednesday.
Gold futures were likely to find support at USD1,224.85 a troy ounce, Monday's low, and resistance at USD1,300.55, the high from June 24. Wednesday’s U.S. session was shortened in advance of the Independence Day holiday.
Gold traded higher Wednesday despite some positive economic data points that could give the Federal Reserve room to begin tapering its USD85 billion-a-month bond-buying program in the near future. Fears that a stronger U.S. economy could bring about tapering prompted gold’s 24% second-quarter plunge, the yellow metal’s worst quarterly performance in multiple decades.
In U.S. economic news out Wednesday, weekly jobless claims fell 5,000 to a seasonally adjusted 343,000 last week. The less volatile four-week moving average dropped by 750 to 345,500, according to the U.S. Labor Department.
Payroll provider ADP said private employers added 188,000 new jobs last month. Heavy gains were seen in construction and small-business. The Labor Department delivers the June jobs report Friday before the open of U.S. markets.
The Institute for Supply Management said its services index fell to 52.2 last month from 53.7 in May. Economists expected a June reading of 54.
Elsewhere, Comex silver for September delivery surged 2.39% to USD19.770 per ounce while copper for September delivery inched up 0.05% to USD3.175 per ounce.
GOLD INVESTMENT prices rose $10 from an overnight low at $1242 per ounce in London on Wednesday morning, nearing 1-week highs for Euro investors as world stock markets fell and the US Dollar rose.
Commodity prices ticked higher with major government bonds. Silver rallied 2.8% to rise again above last week's finish at $19.69.
"We've changed our view slightly" on gold investment, says Macquarie Secutiries analyst Matt Turner in a CNBC interview and now forecasting a rise to $1370 by end-2013.
"Markets have been getting ahead of themselves on the end of QE," says Turner. "Gold in particular factored in a lot of this, but our economists don't think it will happen until later in 2014 and 2015."
More urgently, investment positioning in Comex gold futures is now "too short - the smallest net long position since 2002."
Outflows from exchange-traded gold investment trusts have meantime totaled 600 tonnes already this year, equal says Turner to mining production from Africa and Latin America combined.
Gold ETF holdings fell a further 1.4 tonnes Tuesday to 2042.5 tonnes, according to Bloomberg data, "the lowest since May 2010."
Gold investment has fallen "because 3 things are up," said Morgan Stanley's chief investment strategist David Darst in a separate interview Tuesday - "interest rates, stock markets, and the US Dollar."
The Dollar today spiked to a near-5 week high against the Euro currency, helping the gold price in Euros reach a 1-week high above €971 per ounce - more than 7% above last week's 34-month low.
Prices around $1200 per ounce offer a "good entry point" for gold investment, reckons private-bank Coutts' Gary Dugan, chief investment officer for Asia and the Middle East.
"At this point [however] it is too early to tell whether we have formed a bottom," says the latest chart analysis from bullion market-maker Scotia Mocatta.
"Given the bearishness of the overall technicals, the risk remains for another test to the downside."
Sixteen pro-government protesters were meantime reported killed overnight in Cairo, where the Egyptian army's deadline for elected-president Mohammed Morse to open talks with demonstrators is set to expire at 14:30 GMT.
Cairo yesterday sold only half a planned auction of new 5-year debt to investors, and at a sharply higher interest of 15.8% per annum.
Portuguese bond yields led weaker Eurozone rates higher on Wednesday, breaking 8-month highs above 8% after a minority member of the coalition government stepped down in protest at continued budget cuts.
"It sounds the alarm bell of austerity fatigue," reckons Commerzbank strategist David Schnautz in New York.
Officials from Eurozone lenders and the IMF yesterday gave the Greek government 3 days to confirm its budget cuts, or risk losing €2.2 billion needed to repay bonds maturing next month.
Athens stock market fell to new 2013 lows, down 1.9% on the day. Lisbon's main stock index lost 5.5% to its lowest level since November.
"After a year and a half of relentless gold selling, earlier this week I turned bullish for the first time in a long while," said trader and publisher Dennis Gartman on CNBC last night.
Saying only last week that investment losses in gold would get worse, with gold prices falling to perhaps $900 per ounce, "I'm bullish of gold but I'm not a true believer," Gartman now explains. "I think that the worst is over."
Gold investment prices in China - forecast to become the world's No.1 consumer market thanks to India's import restrictions - today held steady, with Shanghai futures trading at a premium of $30 per ounce above international benchmark prices.
Premiums in Hong Kong and also Singapore, where Swiss bank UBS has now followed Deutsche Bank in offering Singapore gold storage to clients, also held steady and "elevated", according to Reuters.
"Asian buyers believe that gold has probably done enough on the downside for now," the newswire quotes broker Marex Spectron.
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I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
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