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Posting #41: Fri Jan 4th, 2008 01:25 |
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Gold Futures Near Record High
By STEVENSON JACOBS – 2 hours ago
NEW YORK (AP) — Gold prices neared a record high Thursday, propelled by a weakened U.S. dollar and surging oil prices — an inflationary combination that has boosted the precious metal's appeal as a safe-haven investment.
Soybean futures rose to a 34-year high, and crude oil hit $100 a barrel for the second straight day before retreating. Other commodities traded mixed.
An ounce of gold for February delivery jumped $9.10 to settle at $869.10 an ounce on the New York Mercantile exchange, after earlier hitting $872 an ounce, just shy of the all-time high of $875 an ounce set in 1980.
Gold prices increased nearly 32 percent in 2007. The greenback's steep decline against the 15-nation euro has been a major driver behind gold's advance from less than $650 an ounce in January 2007 to its current price. Investors often use gold as haven from falling currency values.
"The euro continues to tick a little higher, and that's supporting the gold market," said James Steel, a precious metals analyst at HSBC. "If you combine that with the uptick in the oil price, you have a cocktail that is positive for bullion."
The dollar gained slightly against the euro after trading lower earlier Thursday. The euro traded at $1.4738, down from $1.4726 late Wednesday in New York.
A gold buying spree by investment funds also propped up gold Thursday, the second trading day of the new year, according to Jon Nadler, an analyst with Kitco Bullion Dealers.
"The funds' Godzilla-sized footprint is really evident today. They have a lot of money to play around with, and it's helping gold," Nadler said.
Other precious metals also rose. March silver added 21 cents to settle at $15.50 an ounce on the Nymex, while March copper gained 12.40 cents to settle at $3.1880.
Though the gains have been steep, gold remains well below the inflation-adjusted high of 1980. Depending on the adjustment, an $875 ounce of gold in 1980 would be worth $2,115 to $2,200 today.
The surge in the price of oil — which hit $100 a barrel for the first time ever Wednesday and did so again Thursday — also has helped boost the price of gold as investors shifted resources to the precious metal, often seen as a hedge against inflation and political uncertainty.
Light, sweet crude for February delivery fell 44 cents to settle at $99.18 a barrel on the Nymex after earlier rising to $100.09, a trading record.
February gasoline fell 2.75 cents to settle at $2.5414 a gallon on the Nymex, and February heating oil fell 2.13 cents to settle at $2.7191 a gallon. Both contracts set new trading records Thursday.
In other commodities, agricultural futures rose broadly, with soybeans hitting a 34-year high on speculation that demand for the crop will grow in 2008. Soybeans for March delivery rose 18.75 cents to settle at $12.675 a bushel on the Chicago Board of Trade, the highest price in the most actively traded contract since 1973.
Wheat for March delivery rose 30 cents to settle at $9.45 a bushel. March corn added 3.5 cents to settle at $4.66 a bushel.
Meanwhile, Florida's citrus growers reported only minor damage Thursday from an overnight cold snap. A serious freeze would have been devastating to the country's biggest citrus industry, already struggling from years of diseases and hurricanes.
Orange-juice futures for immediate delivery fell 6.20 cents to settle at $1.4110 a pound on the New York Board of Trade.
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Posting #42: Mon Jan 7th, 2008 01:59 |
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Last edited on Mon Jan 7th, 2008 02:04 by prophet
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Posting #43: Wed Jan 9th, 2008 00:37 |
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Flight to gold as investors lose faith in money
Last Updated: 12:51am GMT 07/01/2008
The last time gold touched $850 an ounce, the world was visibly spiralling out of control.
Soviet tanks had just rolled into Afghanistan. The Mullahs had seized US hostages in Iran. Pax Americana was on the ropes, and so was capitalism. Inflation had reached 14 per cent in the United States.
Gold’s latest surge caught the bullion banks offguard, while mining bosses complain that the earth’s crust is yielding less
The final spike in bullion occurred when the Hunt brothers tried to corner the silver market, forcing up gold in tandem through arbitrage links. It collapsed within days.
If you strip out the Hunt anomaly, it is fair to say that gold established a "safe-haven" level of $600 - or $1,500 in today's money - that roughly lasted through the final phase of the Carter malaise, the oil shock, and the collapse of confidence in the monetary order.
By this benchmark, last week's jump to $869 looks tame. Yet gold is undoubtedly flashing warning signs. The price has jumped 42 per cent since the US credit markets suffered their heart attack in August. It has tripled since Gordon Brown sold over half Britain's reserves, deeming it a barbarous relic. That conceit has cost taxpayers ÂŁ3.4bn, after adjusting for returns from dollar, euro, and yen bonds.
The mounting risk that Pakistan's nuclear weapons could fall into the hands of al-Qa'eda is playing a role. So are fears that Western leaders have no credible answer to the banking crisis as it drags on for month after month.
Note that gold smashed the 28-year record just days after the European Central Bank launched its monetary "shock and awe", showering half a trillion dollars on the banks, with parallel moves by the Fed, the Bank of England and the Swiss. Clearly, a small army of investors is betting - rightly or wrongly - that our debt-bloated democracies are now too decadent to take their punishment. The elites will opt for the easy path of reflation to postpone the day of reckoning.
Ben Bernanke, the Fed chief, is viewed as an inflationist. He once talked of dropping bank notes from helicopters. Loose words have consequences if you are a Fed governor.
"The central banks are flooding the market with paper," Peter Hambro of Peter Hambro Mining, said. "Does anybody now take the dollar, the euro or the pound seriously? People are turning to gold because it is the only hard store of value," he said.
Joachim Fels, bond guru at Morgan Stanley, said that the central banks will tolerate an upward creep in the underlying level of inflation because the pain required to kick the habit at this late stage is deemed too high. "I strongly doubt that they will tighten the screws. I expect 2008 to mark the beginning of another global liquidity cycle."
Blame the return of 1970s stagflation. The China effect has turned malign, pushing up global prices. The easy trade-off between growth and inflation is over. All choices are now bad. Infecting everything is the looming end to US dollar hegemony. Mid-East and Asian states are importing America's bailout policies through their currency pegs (or dirty floats), stoking an inflationary fire. Prices are now rising 14 per cent in Qatar, 10 per cent in the UAE, 13 per cent in Vietnam and 6.9 per cent in China. The pegs are near snapping point. Bretton Woods II is dying.
For a while Asia, Russia, and the petro-powers seemed happy to accept the euro as the anti-dollar. Long-term capital flows into the eurozone reached a net €200bn in the first seven months of 2007, according to BNP Paribas. Then the money dried up.
Perhaps Asians were shocked to learn that German, French and Dutch banks had gorged on sub-prime debt, or perhaps they began to take a closer look at Europe's fertility rate and vanishing youth, or woke up to the deflating property bubble in Spain. Yes, the euro reached record highs in the autumn, but this was driven by hot money flows. Such fickle finance will drain away as soon as the ECB hints at rate cuts.
So are the new powers turning to gold instead, mistrusting the euro as much as the dollar? Their footprints have not yet shown up in the IMF reserve data, but there can be long delays, and China does not report data. Vladimir Putin has told Russia's central bank to raise the gold share of its $469bn reserves to 10 per cent. We know that those Asian and oil states now holding most of the world's $6.6 trillion reserves possess very little gold, yet most have an historical affinity for it. Draw your own conclusion. We know too that the little guys are buying defiantly, at last able to invest in gold through exchange trade funds (ETFs) on the main bourses. The ETF holdings have reached 834 tonnes, putting them in seventh place ahead of the Bank of England, the ECB and Japan.
Gold's latest surge has caught the bullion banks off-guard. Most expected the price to fall back at the end of India's Diwali marriage festival. Speculative "longs" on New York's Comex market exceed levels that have often led to a sharp sell-off in the past. Jewellery demand - still 80 per cent of the market - has stalled. With all the moons aligned for a correction, Goldman Sachs advised clients to go "short" in November. That was $60 ago. Ouch.
The gold bears may yet smile. James Steel, an analyst at HSBC, said gold is shackled to oil since the commodity funds ($140bn) allocate fixed shares to each component.
Energy makes up 65 per cent of the weighting, so the indexes must buy gold whenever oil shoots up - as it did last week, kissing $100 a barrel. "The oil gold correlation has risen 0.9 since the emergence of these funds, which is very high," he said.
So what happens if a slump chills oil? We will then learn whether gold is a commodity, or once again a currency.
"We think gold is fundamentally overvalued by about $150 but that can go on for a long time," John Reade, the precious metals chief at UBS and top forecaster this year. "A lot of our clients have been buying gold since the credit crunch because they think central banks will respond with aggressive monetary easing. If that becomes a mainstream view, gold will soon have four figures on it. The feeling is that there is a lot of money around, and not much gold," he said.
Indeed. Mining bosses complain that the earth's crust is yielding less gold. Output in South Africa has fallen to the lowest since 1932. Canada has passed peak output. Gregory Wilkins, head of Barrick Gold, says: "Global mine supply is going to decrease at a much faster rate than people generally believe."
In the Middle Ages gold fetched nearly $3,000 an ounce in real terms. The price fell to nearer $550 when Spain flooded the world with Aztec and Inca riches, and there it hovered for three centuries.
But the modern era has been an aberration. Supply is exhausted. Perhaps we should now regard the Middle Ages as the proper benchmark price. One thing is certain: gold will outperform paper as long as governments keep increasing the global money supply 15 per cent a year.
Information appearing on telegraph.co.uk is the copyright of Telegraph Media Group Limited and must not be reproduced in any medium without licence. For the full copyright statement see [color=#0000ff nsAdx="0" MR4Xz="0"]Copyright
Last edited on Wed Jan 9th, 2008 00:39 by prophet
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Posting #44: Wed Jan 9th, 2008 00:40 |
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Gold is the new global currency
Published: January 7 2008 19:05 | Last updated: January 7 2008 19:05
There was a time when gold was money. In today’s uncertain world, the yellow metal is back in fashion. Bullion prices rose to a record nominal high after the assassination of Benazir Bhutto in Pakistan added to nervousness about the world economy. Part of gold’s allure is its traditional status as a safe haven. It is seen as a store of value when everything else seems risky. But the bigger drivers behind the rising spot price are a depreciating dollar and the prospect of negative US real interest rates.
A better way to think of gold may be as central bankers used to before America dropped the gold standard: not as a commodity, but as another currency. As long as the dollar stays weak, gold’s bull run will last.
The arguments for further gains in the gold price are compelling. It looks cheap, despite climbing from a low of about $250 a troy ounce in 1999, when central banks were selling reserves. The UK’s decision back then to sell 60 per cent of its official holdings looks particularly poor judgment.
Prices have a long way to go before they approach the inflation-adjusted record touched in 1980 when Soviet tanks invaded Afghanistan. At Monday’s $859, gold was trading at less than half that level. It could top $1,000 and still be at the lower end of what some analysts argue is a safe haven range.
Gold is also benefiting from diversification away from equities. Commodities have emerged as a distinct asset class, with billions of dollars poured into exchange traded funds. Physical demand for jewellery may have stalled in Asia, but consumption remains strong in the Middle East. Declining output in South Africa will help support spot prices.
But it is the relationship between the dollar and the reaction of the world’s central banks to the credit squeeze that some bulls would say really makes gold an attractive bet.
The US Federal Reserve’s aggressive, rate-cutting response to the credit squeeze has created a risk of a sharp rise in American inflation. That in turn creates the risk of a precipitous fall in the dollar and so makes gold more attractive as a hedge.
The world’s major economies have experienced rapid money supply growth of 10 per cent plus per annum in recent years. The Fed remains the world’s biggest holder of gold, yet supplies of the metal are no longer growing annually. If gold is a finite currency, its value against not just the dollar, but sterling and the euro too, should rise.
Moreover, a sharp decline in US real interest rates – financial markets expect another half percentage point cut this month – means that the low yield on gold matters less. It may have been a poor hedge against inflation in the past but the combination of rising consumer prices and economic stagnation may make it a better store of value.
Gold’s rise shows investors are nervous. That is an important message for central banks contemplating interest rate cuts. The Fed must show it is not prepared to allow inflation to take off. Keynes called gold a barbarous relic. It has life left in it. But it is in the interests of business and consumers that its most bullish fans are proved wrong.
Copyright The Financial Times Limited 2008
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Posting #45: Wed Jan 9th, 2008 04:00 |
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THIS IS IT!!!
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Posting #46: Mon Jan 14th, 2008 02:34 |
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In 2008 Gold Should Glitter
by: By James Turk
Although gold is nearing its historic high, it may have more room to climb in 2008.
Bull markets begin when few people are paying attention. So it is not surprising that sentiment for gold hit rock bottom back in July 1999. That month marked the end of the selling climax precipitated by the announcement in May 1999 by then British Exchequer Gordon Brown that Britain would be selling one-half of its gold reserve. The “Brown bottom” in gold was in place at $252. Gold has been climbing ever since.
Of course, gold’s advance since then has not been a straight line. It never is. Bull markets always climb countless “walls of worry,” and gold has seen plenty of those during the past eight years, with more to come, no doubt, as investors look toward the prospects for gold in 2008. But with “walls of worry” come opportunities. Gold has risen in price each year of this decade, and good reasons suggest that this unbroken string of annual price appreciation will continue. So even though gold is now approaching its record high price of $850, it is still a good time to buy it. Here are some of the more important reasons to expect a much higher gold price in the year ahead. In fact, it is reasonable to expect that in 2008 gold will
reach that level long thought impossible—a four-digit gold price.
Gold Is Still A Good Value
Although gold’s previous record high of $850 reached in January 1980 gets attention, rarely do people consider that a 1980-dollar had substantially more purchasing power than a 2007-dollar. Adjusting for 27 years of inflation, it takes $2,208 today to equal the purchasing power of $850 in January 1980. So by this measure, gold is still far from a true record high.
Another useful measure to determine gold’s relative value can be made by comparing gold to the Dow Jones Industrial Average. Gold is overvalued when it takes only one ounce to buy the DJIA. For example in the 1930s, one ounce of gold at $35 bought the DJIA, and it did so again in 1980 when an ounce of gold was $850 and the DJIA was 800. Though this ratio has fallen from more than 40 ounces in 2000, it still takes 16 ounces of gold to buy the DJIA, meaning that gold continues to be a relatively good value while the DJIA is relatively expensive. See Figure 1.
click image for larger view
There are times to be invested in equities and other times it is useful to keep a portfolio in cash. We are in one of those moments of time where cash is the place to be–but not dollar-cash. Rather, an investor’s liquidity should be in gold, waiting for the next opportunity to buy the DJIA. That will be when one ounce of gold again buys the DJIA, like it did in the 1930s and in 1980. But what will that price be? No one knows of course. The price of gold and the DJIA will depend on whether the Federal Reserve deflates the monetary system as it did in the 1930s or inflates it like it did in the 1970s. Right now, Americans remain on the road to inflation, but regardless, the 1-to-1 relationship between the DJIA and gold is the target to await before moving a portfolio out of gold-cash to equities.
No Counterparty Risk
National currencies depend on the safety of the bank where someone deposits his or her currency. The U.S. subprime crisis has highlighted the severity of that risk, and the run on U.K.-based Northern Rock Bank highlights the fragility of the banking system.
National currencies have counterparty risk, but gold does not. As the subprime crisis continues to deepen, the ability to avoid this risk by holding gold during this period of financial turmoil and uncertainty about the safety and solvency of banks more than offsets any interest income one earns on bank interest.
National Currencies Are Managed
Central banks manage all national currencies. Some do a better job than others, but all national currencies, without exception, are being debased by inflation. In contrast to national currencies, gold cannot be inflated because it cannot be created out of “thin air” such as dollars, euros and other currencies. Consequently, an ounce of gold preserves its purchasing power. The price of crude oil shows (see Figure 2 ) that an ounce of gold has essentially the same purchasing power today as any other time since 1945.
click image for larger view
Figure 2 also illustrates the reasons gold is money; it is useful in economic calculation. In other words, during long periods, gold conveys the utility of goods and services by the value people place on them and straightforwardly conveys that usefulness in terms of prices, which at least for commodities, remain remarkably stable—and much more stable than the dollar price of any commodity.
Central Banks Are Losing Control
Central banks intervene in markets. That is what they do. They intervene in bonds and other debt instruments to influence interest rates. They intervene in currency markets to influence foreign exchange rates. And similarly, they intervene in the gold market to influence the price of the metal. Gold is a monetary barometer that measures how well national currencies are managed. A rising gold price indicates that a currency is being poorly managed, meaning that its purchasing power is being inflated away. This reality explains the objective of central bank intervention in the gold market, which is to cap the price of gold. By doing so, central bankers hope to make the dollar look worthy of being the world’s reserve currency, but years of mismanagement are now causing people around the world to question whether the dollar should remain in that esteemed role.
What’s more, people are now beginning to understand the impact of central bank intervention
on the gold price and the shallow reasons for it, thanks largely to the efforts of the Gold Anti-Trust Action Committee, which for several years has well documented the central banks’ intervention in the gold market. GATA has published the research of many analysts, including several articles by myself, and all of this work is available free at http://www.GATA.org. Because of central bank intervention, the gold price is much lower than it would be had there been no intervention.
That in itself is a solid reason to buy gold, but history also provides some strong evidence that gold should be acquired when its price is kept artificially low by central bank intervention. Now that central banks are losing control, the gold price will move toward its free-market price, just like it did after central banks stopped intervening in the late 1960s.
The Global Monetary System Is Broken
Global imbalances from trade and capital flows have become so huge that colossal pools of “hot money” are constantly looking for a safe home. The movements of this money now dwarf the flow of capital required for global trade and commerce and has, therefore, become a destabilizing force in the international monetary system. These imbalances did not occur under the classical gold standard, proving its efficacy. Thus, I anticipate that in the not-too-distant future, gold will once again be at the center of global commerce because only gold can impose the necessary discipline on money creation. And only discipline on the money creation process will end these destabilizing imbalances.
Basically, without some external discipline, which gold provided at one time, central banks will create money to excess. Figure 3 is a good example of that reality. M3, which is the total quantity of dollars in circulation, is presently growing at 15.2 percent per annum. The Federal Reserve stopped reporting M3 in February 2006, most likely to hide its intent to inflate the dollar. The red line since then is the current M3 estimate calculated by John Williams of ShadowStats.com. It is this excessive money creation that causes the destabilizing imbalances now wreaking havoc with the international monetary system and threatening to topple the dollar from its perch as the world’s reserve currency.
click image for larger view
Technicals Remain Strong
Many people say that gold began a bear market in January 1980. I disagree. Figure 4 shows that gold formed a “flag” beginning in 1980, which is a bullish consolidation pattern. Through the 1980s and 1990s, gold consolidated the tremendous gains realized in the 1960s and 1970s. It was not a bear market but simply a “breather” in a multidecade bull market.
But this chart is also important for another reason. Note the green uptrend line marking gold’s great bull market in the 1970s. Consider also the two red ovals in that decade. When gold pulled away from its uptrend line in the early 1970s and then again in the middle of the decade, it never looked back. The question then becomes, will history repeat? Gold is now pulling away from the green uptrend line formed this decade. If history is any guide—and I think it is—then gold will continue climbing from here. And the current red oval extends well into a four-digit gold price.
It All Adds Up To Higher Gold
All of the above factors will increase the demand for gold. This increased demand will cause gold’s rate of exchange to national currencies to rise, meaning gold’s price will climb. And a four-digit gold price in the months immediately ahead looks to be a reasonable expectation. The important point is that gold is a relatively good value. Given the rate at which M3 is growing, there is considerable inflation in the pipeline, so owning gold is a good strategy as inflation becomes a larger problem in the months ahead. In this environment of growing monetary problems, I recommend that gold should still be accumulated, month in and month out under a long-term savings plan. Instead of saving fiat currency, everyone should be saving sound money—gold. But buy physical gold, not the ETF, certificates, futures and other forms of “paper” gold.
click image for larger view
Gold and these types of paper gold are fundamentally different. With the paper gold, an investor owns exposure to the gold price; he or she does not own gold. With paper gold, a person has counterparty risk. In contrast, when the individual owns the physical metal, he or she gains exposure to the gold price without counterparty risk, which is what I recommend. Given the huge losses that banks worldwide are taking, everyone today should avoid counterparty risk. In other words, own “tangibles” instead of “promises.”
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Posting #47: Tue Jan 15th, 2008 00:09 |
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Gold, Platinum Rise to Record as Dollar Falls; Crop Prices Gain
By Claudia Carpenter
Jan. 14 (Bloomberg) -- Gold and platinum rose to records and cotton and corn surged as a declining dollar increased demand for precious metals and farm products as alternatives to stocks and bonds.
The dollar fell as traders increased bets that the Federal Reserve will lower U.S. interest rates to avoid a recession. Gold has gained 8.3 percent this year and the dollar has fallen more than 1.9 percent against the euro, to a seven-week low. Oil and base metals such as copper also rose, lifting the UBS Bloomberg Constant Maturity Commodity Index to the highest ever.
``We're in a falling-rate environment. I think that works in gold's favor,'' Richard Urwin, London-based head of asset allocation at BlackRock Investment Management, said in an interview with Bloomberg Television. ``We're probably in an environment in which, on average, the dollar is going to depreciate. Gold is a good hedge against it.''
Gold futures for February delivery rose $5.70, or 0.6 percent, to close at $903.40 an ounce on the Comex division of the New York Mercantile Exchange. The price earlier reached $915.90, the highest ever for a most-active contract. The metal for immediate delivery rose $7.20, or 0.8 percent, to $902.60 at 1:59 p.m. in New York. It earlier reached $914.30.
Twenty-three of 29 traders, investors and analysts from Mumbai to Chicago that were surveyed by Bloomberg on Jan. 10 and Jan. 11 advised buying gold this week. Five said sell, and one was neutral.
`Extremely Bullish'
``The market is still extremely bullish,'' said James Moore, an analyst at TheBullionDesk.com in London. ``With the U.S. potentially cutting interest rates while those in Europe stay firm, the dollar looks set to add additional upside momentum.''
Corn and soybeans rose to records, and wheat rose the maximum permitted by the Chicago Board of Trade. Corn, the biggest U.S. crop, has jumped 48 percent in the past five months, and soybeans surged 54 percent. Wheat has doubled in the past year. For a second straight session, cotton rose the maximum permitted by ICE Futures U.S.
``Rising commodity prices, especially agricultural prices, have heightened inflationary concerns,'' Commerzbank AG said in a report on Jan. 11.
The dollar declined on speculation that U.S. borrowing costs will fall below those denominated in currencies held by members of the European Union.
Fed Funds Expectations
Fed funds futures contracts on the Chicago Board of Trade show 54 percent odds the Fed will cut its 4.25 percent target rate for overnight bank loans to 3.75 percent at its Jan. 30 meeting. The Fed lowered the rate 1 percentage point last year. The ECB raised rates twice in 2007 to 4 percent.
Demand for gold will be less affected by a global slowdown than silver, platinum and palladium, said Walter de Wet, head of commodity research in Johannesburg at Standard Bank Group Ltd., Africa's largest lender.
Industrial uses for gold, such as dentistry and electronics production, made up 15 percent of total demand in 2006 compared with more than 50 percent for platinum and 47 percent for silver, according to estimates by London-based research company GFMS Ltd. Jewelry accounts for almost 60 percent of gold consumption.
``The investment component of demand for all of these precious metals is dominating,'' de Wet said. ``We're likely to see an increase in all of these metals but gold is probably going to outpace.'' The gains may last until the second half of this year, he said.
StreetTracks Assets Rise
Assets in the StreetTracks Gold Trust, the world's biggest exchange-traded fund backed by gold, are up 2.2 percent this year to a record 641.81 metric tons.
``We believe the broader investor base is not yet involved in gold, which remains a very small market,'' Citigroup Inc. analyst John Hill said yesterday in a report.
Investment demand for bullion, excluding purchases for jewelry, totaled $13 billion in 2007, Hill said.
Investors may also prefer gold to stocks, analysts said. The Standard & Poor's 500 Index has fallen 3.7 percent this month.
``People are looking at precious metals as principally a safe haven while they ride out a correction in equity markets,'' Peter McGuire, managing director at Commodity Warrants Australia Ltd., said by telephone from Sydney today.
The euro traded as high as $1.4915 today. It reached a record $1.4967 on Nov. 23.
Gold has had a correlation of 0.71 against the euro-dollar exchange rate in the past three months, compared with 0.67 in the previous three months. A reading of 1 would mean the two moved in lockstep.
Inflation-Adjusted Gold
Gold still is cheaper than its inflation-adjusted price. In 1980, futures reached a record $873 an ounce, which would be the equivalent of about $2,186 last year, based on an inflation calculator on the Minneapolis Federal Reserve Web site.
Silver for immediate delivery rose 8.63 cents, or 0.5 percent, to $16.3113 an ounce after earlier rising to $16.60, the highest since November 1980.
Platinum for immediate delivery gained $8.50, or 0.5 percent, to $1,573 an ounce, after earlier touching a record $1,592. The precious metal is used in products such as jewelry and auto-emissions control equipment.
Macquarie Group Ltd. raised its forecast for the average platinum price this year by 16 percent to $1,475 an ounce. It also increased its 2009 and 2010 estimates by 15 percent.
Palladium for immediate delivery advanced $3.75, or 1 percent, to $381.75 an ounce.
Macquarie cut its 2008 palladium forecast by 12 percent to $350 and its 2009 estimate by 14 percent to $365.
Morning `Fixing' Prices
The morning platinum ``fixing'' price used by some mining companies to sell their production gained $24 to $1,589 an ounce, the highest ever. The palladium fixing rose $6 to $382, the highest since May 17, 2006.
Still, gold and other precious metals may decline in the short-term as some price gauges show the rallies have been overdone.
Hedge-fund managers and other large speculators increased bets on higher New York gold futures, to a record net 205,404 contracts on the Comex as of Jan. 8, figures from the U.S. Commodity Futures Trading Commission on Jan. 11 showed. Net long positions were up from 199,438 contracts from a week earlier.
``We are more concerned about the prospects for a sharp correction in all the precious metals rather than for near-term gains,'' UBS London-based analyst Robin Bhar said in a report. ``It is clear that there are very large speculative positions present in gold and that gold is vulnerable to a sharp correction in price at any time.''
Following are technical gauges for gold:
20-day moving average 844 100-day moving average 778 200-day moving average 722
14-day relative strength index 77.49
Fibonacci Start End 50% 38.2%
745 904 825 806 To contact the reporter on this story: Claudia Carpenter in London at ccarpenter2@bloomberg.net .
Last Updated: January 14, 2008 14:02 EST
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Posting #48: Tue Jan 29th, 2008 01:02 |
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Gold, Platinum Hit New Records
By STEVENSON JACOBS – 2 hours ago
NEW YORK (AP) — Precious metals prices soared Monday, with gold and platinum hitting fresh highs on a falling U.S. dollar and supply concerns fed by a fourth day of mine stoppages in South Africa.
Other commodities rose broadly, with oil trading higher despite lingering recession worries.
The dollar dropped against its main rivals amid weak U.S. housing data and beliefs that the Federal Reserve will again slash interest rates when it meets this week. Many investors expect the Fed, seeking to breathe life into a weakening U.S. economy, to cut rates by up to a half point, following last week's surprise three-quarter-point cut.
The dollar fell against the euro late Monday, fetching $1.4774.
Lower interest rates can boost the economy but also send the dollar falling as investors shift funds into hard assets like gold.
"A weaker dollar is going to be very positive for both gold and silver," said Michael Gross, a futures analyst and broker at OptionSeller.com. "Right now, the market is probably expecting a half-point rate cut and ... gold prices are reacting accordingly."
Gold for February delivery surged to a record $929.80 an ounce on the New York Mercantile Exchange, eclipsing Friday's record of $924.30. It later pulled back to settle at $927.10 an ounce, up $16.40.
Gold has jumped in value in the last year and breached the $900 barrier for the first time earlier this month. Still, when adjusted for inflation, gold remains well below its all-time highs in 1980. An ounce of gold at $925 then would be worth about $2,360 today.
The continued suspension of mining in South Africa also supported gold and platinum prices. Several major mining companies, including AngloGold Ahsanti Ltd., Gold Fields Ltd. and Harmony Gold Mining Co., were forced to close Friday because of a national electricity shortage, ceasing production at some of the world's biggest mines.
South Africa is the world's leading platinum producer and is second only to China in world gold production.
Several mining companies were meeting with South Africa's state power utility in hopes of resuming production later this week.
"I think that we are starting to emerge from a crisis that had the potential to undermine the viability of the South African gold industry," AngloGold Ashanti CEO Mark Cutifani said in a statement.
Platinum prices jumped to a record $1,733 an ounce on the Nymex before settling at $1,728.70 an ounce, still up $48.60.
Other precious metals also rose. March silver added 26 cents to settle at $16.750 an ounce, while March copper gained 55 cents to settle at $3.1895 an ounce.
In energy markets, oil futures reversed earlier losses to end higher as traders brushed off recession concerns ahead of the expected Fed rate cut.
Light, sweet crude for March delivery rose 28 cents to settle at $90.99 a barrel on the Nymex. Oil earlier slipped below $90 a barrel on dismal U.S. data showing new home sales plunged to record lows last year.
Other energy futures also rose Monday. Heating oil futures for February delivery rose 0.74 cent to settle at $2.5265 a gallon on the Nymex while February gasoline futures rose 0.71 cent to settle at $2.3253 a gallon.
In agricultural markets, wheat for March delivery soared 30 cents to settle at $9.63 a bushel on the Chicago Board of Trade.
Other grain commodities also rose. March soybeans added 10.75 cent to settle at 12.5375 a bushel, while March corn gained 4 cents cent to settle at $5.0225.
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Posting #49: Fri Feb 1st, 2008 07:15 |
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Posting #50: Wed Feb 27th, 2008 01:52 |
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Gold gains on inflation fears February 27, 2008 - 8:45AM
Gold finished higher in overnight trading, resuming its rally as crude oil rose, the US dollar slid and a report showed rising US producer prices.
But the market remained wary of the possibility that the International Monetary Fund might sell a part of more than 3,000 tonnes of gold it holds.
Silver hit a 27-year high as investors considered it relatively cheap against other precious metals, analysts said.
Spot gold closed at $US946.60/947.40 by the last quote at 2:15 p.m. in New York, up from $US937.80/938.60 in New York on Monday and off last week's record high of $US953.60.
During the session, it fell as low as $US926.40 and reached a high of $US948.50.
The US gold contract for April delivery at the COMEX division of the New York Mercantile Exchange settled up $US8.40 at $US948.90 an ounce.
A record finish of crude oil futures on Tuesday increased gold's appeal as a hedge against inflation. US crude futures settled up nearly $US2 at $US100.88 ($108) a barrel.
The United States said it supported sale of a limited portion of the IMF's gold stocks and was confident Congress would support the move. The US Treasury had resisted seeking Congressional approval.
''The market is capped because of this IMF sales news. It would be healthy for the market if it dropped back to low $US900s. Then it has a better chance to make an assault on $US1,000,'' said Peter Hillyard, head of metals sales at ANZ Investment Bank.
''The dollar would have to get a lot weaker for the market to ignore that and just push through,'' he said, but added that any price dip or dollar weakness might attract some buying.
The dollar accelerated losses to hit an all-time low against the euro. In afternoon trade, the euro
surged to a record of $US1.4982. A lower dollar makes gold cheaper for investors holding other currencies.
The IMF is the world's third-largest gold holder, with 3,217 tonnes of reserves. Any sale of IMF gold might be done in accordance with a European Central Bank gold accord, which limits total gold sales to 500 tonnes a year, analysts said.
''It is a material development and suggests that it could actually get through. That's a genuine change because the market was assuming otherwise,'' said Stephen Briggs, economist at SG Corporate and Investment Banking.
''In itself, it won't be a huge thing but it is definitely something that the market was not expecting.''
The physical market was abuzz with activity as gold's fall during Asian trade attracted bargain hunters and jewellers, mainly from Indonesia and Vietnam.
Some analysts said the metal had potential to set new highs after consolidating its position. It rose 14% this year on the top of 32% gains in 2007.
''Strong buying on dips is likely to be witnessed outweighing temporary liquidations on such news, which are quite common when there are sharp price rises,'' said Pradeep Unni, analyst at Vision Commodities, referring to IMF gold sales news.
Unni also told clients in a note that countries such as China, Iran and some European countries could buy more gold to reduce their reliance on the US dollar in spite of the bearish IMF news.
In other precious metals, silver rose to $US18.65 an ounce, the highest level since December 1980. It was last quoted at $US18.65/18.70 an ounce, against $US18.07/18.12 late on Monday.
Platinum dropped 2% before paring losses. It fell as low as $US2,090 before rising to $US2,130/2,140 an ounce, against $US2,135/2,145 late in New York on Monday and a record high of $US2,192. Palladium rose $US3 to $US523/528 an ounce.
Reuters
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