Gold’s London AM fix this morning was USD 1,677.00, EUR 1,255.62, and GBP 1,052.00 per ounce. Yesterday’s AM fix was USD 1,694.00, EUR 1,266.54 and GBP 1,059.55 per ounce.
Silver is trading at $32.51/oz, €24.36/oz and £20.42/oz. Platinum is trading at $1,630.50/oz, palladium at $644./oz and rhodium at $1,425/oz.
Cross Currency Table – (Bloomberg)
Gold fell $10.70 or 0.64% in New York yesterday and closed at $1,681.30/oz. Gold traded sideways in Asia prior to seeing slight falls which continued in Europe prior to a bounce to over $1,684/oz and then further selling saw gold fall back to $1,676/oz.
The battle for the 200 day moving average (simple) at $1,687/oz is on and a positive weekly close and a weekly close above the 200 DMA would be very constructive from a technical point of view.
Gold traders are cautious and await more cues from US data after recent comments from Ben Bernanke initiated the gold bullion rally this week. The Fed chairman’s defence of very low interest rates and expectations for further QE led to inflation hedging gold buying which led to a 2 week high.
Traders will watch the data from the US for the rest of the week. February durable goods orders later today, weekly jobless claims on Thursday, February personal income & spending, and March PMI & University of Michigan March sentiment readings on Friday.
India’s jewellers continued their strike. The government has agreed to view jeweller’s demands for removal of an excise duty on unbranded jewellery. However, officials declared they won’t reduce the import duties on gold and platinum.
Goldman Gold Bulls in 2012: $1785/oz in 3 Months; $1,840/oz in 6 Months and $1,940/oz in 12 Months
Goldman Sachs have reiterated their upbeat outlook for the gold price in 2012.
Thomson Reuters’ Amanda Cooper reports in the Reuters Global Gold Forum that Goldman have issued price targets for gold of $1,785/oz in 3 months, $1,840/oz in 6 months and $1,940/oz in 12 months.
Goldman Sachs, in a just released note, say that "subdued US growth in 2012 will likely support gold prices, although risks to our constructive view are rising. We reiterate our constructive outlook for gold prices in 2012 and our 3, 6-and 12-month forecasts of $1,785/toz, $1,840/toz and $1,940/toz, respectively."
Goldman "acknowledge, however, that continued strong US economic data poses growing risk to our forecast for rising gold prices.”
Not surprisingly, trading house Goldman recommends the more speculative and high risk trading of gold futures.
"Net, we reiterate our view that at current price levels gold remains a compelling trade but not a long-term investment, and we continue to recommend a long position in Dec-12 COMEX gold futures." Goldman have had this recommendation in place since October 2010.
Gold CEOs See $2,000/oz At Reuters Global Mining and Metals Summit
Gold mining CEOs and executives at the Reuters Global Mining and Metals Summit reaffirmed their bullish outlook for gold with many forecasting prices above $2,000/oz.
Executives from Newmont, Agnico-Eagle and Solomon Gold voiced their opinions that gold could rise to over $2,000/oz.
Agnico-Eagle sees $2,000/oz gold possible this year. Agnico-Eagle expects gold can reach $2,000 an ounce this year, due to continuing investment demand for the precious metal amid a still weak global economy.
XAU/GBP 1 Year Chart – (Bloomberg)
"Can it get to $2,000? Absolutely. Can it do that within the next year? Absolutely," said Agnico CEO Sean Boyd.
Solomon Gold’s CEO, Malcom Norris, echoed Agnico’s view. "If you look at loose monetary policy coming out of the U.S., if you look at continued anxiety out of Europe, then it is logical for people to invest in gold," Norris told CNBC. "Where else are they going to invest their money in a high risk environment?"
When asked if gold could hit $2,000 an ounce this year, Norris said: "While it continues to be a logical choice, then the price will go up."
The head of Newmont Mining told CNBC yesterday he sees the price of gold rising to $2,000 an ounce and the time to buy it is now before inflation "comes roaring back."
Last year, O’Brien correctly predicted gold at over $1,750 an ounce in 2012.
He did not say when he expects gold to rise to $2,000 an ounce but did say the company sees flat production and escalating costs this year.
But taking a longer view, he said, "If you think about the next year, the next three years, and the next five years we’re in an upwardly sloping gold price environment."
O’Brien said Federal Reserve Chairman Ben Bernanke’s comments on the economy earlier Monday show currencies are "going to continue to be cheap, and when inflation comes, it’s going to come roaring back and gold will look like an asset class that people should own. Buying it now is the best time to buy it."
(Bloomberg) — Gold May Have Reached Low; Stage Set for Medium-Term Rally: Citi
Gold holds 55-wk avg., has not traded more than 1%-3% below avg. in past 10 yrs with exception of 2008, Citigroup analyst Tom Fitzpatrick says in note.
Chart suggests $1,585-$1,615 is “buy zone”; WMA holding, weekly “hammer” pattern indicate gold may have already posted its lows.
Latest pattern is similar to 2006 where gold steadied at 55 WMA, then set new highs
Sees resistance $1,790-$1,802, doesn’t specify source of resistance, followed by trend high at $1,920/oz.
(Bloomberg) — Gold Bulls ‘Vanished,’ Makes it Good Time to Buy: Strategas
Gold is a buy with bullish sentiment down to 44% in Consensus survey, a level where the metal has rallied from in the past, says Strategas technical analyst Chris Verrone.
Also supporting contrarian buy recommendation:
– 200 DMA still upwardly sloping
– $1,600-$1,650 “acting as strong support”
(Bloomberg) — Gold to Average $1,645 an Ounce This Year, CPM Group Says
Gold will average $1,645 an ounce this year, Jeffrey Christian, CPM Group’s managing director, said today in a presentation at the release of the research company’s “Gold Yearbook 2012.”
Last year, gold futures on the Comex in New York averaged $1,573.39.
(Bloomberg) — Gold Investors Turn More ‘Price Sensitive,’ CPM Group Says
Gold prices probably won’t top the record this year after buyers turned more “price sensitive,” buying on dips instead of rallies as global debt woes ease, CPM Group said.
Holdings by private investors increased 34.3 million ounces last year, 5.8 percent below the gain of 36.4 million in 2010, New York-based CPM said today in a statement with the release of its “Gold Yearbook 2012.” Additions this year “are expected to be flat” from 2011, the research company said.
Last year, gold gained 10 percent, the 11th straight annual gain. Futures rose to a record $1,923.70 an ounce on Sept. 6 as Europe’s debt crisis escalated and U.S. interest rates remained low. The metal fell in the fourth quarter as “investors stopped buying indiscriminately” amid signs that “the dollar, the euro, the European Central Bank and major commercial banks perhaps were not going to collapse,” CPM said.
“Reduced anxiety about the immediate state of the global economy already appears to have begun being reflected in investors becoming more price sensitive in their gold purchases,” Jeffrey Christian, CPM’s managing director, said in a presentation at the release of the yearbook. “All currencies, including gold, lose their purchasing power over time.”
Central banks and government institutions increased holdings by 12.7 million ounces in 2011 and were net buyers for the fourth straight year, CPM said. Fabrication demand rose 0.6 percent to 72.9 million ounces, the company said.
Supplies last year climbed 0.8 percent to 119.9 million ounces, partly as mine production increased, CPM said.
In 2011, Chinese investors added more than 4 million ounces to their holdings, CPM said.
Gold futures for June delivery fell 50 cents to $1,687.70 an ounce today on the Comex in New York. The price has climbed 7.7 percent this year.
CPM has published yearbooks on precious metals from a series of reports that began in 1971.
(Bloomberg) — Kazakhstan Increased Gold Reserves by 2.2 Tons, IMF Data Show
Kazakhstan raised its gold reserves by 2.2 metric tons in February, according to data on the International Monetary Fund’s website.
Mexico lowered bullion reserves by 0.1 ton, Tajikistan cut them by 0.2 ton and Turkey reduced holdings by 1.3 tons, the data show.
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