Curb Your Capital(ism)

Good Day,

A more robust gain in the US dollar overnight (rising 0.56 on the index, to 75.82) drew additional sales from gold holders and dented values in crude oil as well as other precious and base metals. The US currency gained ground following cautionary words on the state of economic recovery by ECB President Jean-Claude Trichet. US stock index futures were indicating a drop on the day, and risk appetite appeared to be on the wane this Friday morning.

Analysts at Fort Pitt Capital in Pittsburgh distilled the dollar-centric action as follows this morning: "Everyone is looking at the dollar right now. Low interest rates are supposed to make investors want to take risks, but that is not happening. People remain very nervous about the economy, and especially about the consumer.” Nervous, like Mr. Trichet, who cautioned that it is ‘too early to call the [financial] crisis as over.’

Against this changing set of background conditions, New York spot gold bullion opened with an $8 loss, quoted at $1136.70 per ounce. Trade talk indicates a possible dip to the $1100 area prior to a possible renewed assault on the other side of the $1150 mid-point, up to $1180 or $1200. Provided other obstacles do not materialize, of course. In any case, ‘corrections’ have been ultra-shallow up to this point, despite growing nervousness about the sustainability of the patterns now in place since the first day of September. Thus, we still expect to see attempts at higher levels not only today, but perhaps next week as well. Read the rest of this entry »

Gold futures managed to rise slightly Thursday despite a rebounding dollar and sinking oil prices. Silver advanced modestly also, while platinum declined 0.6 percent. US stocks sank for a second straight day, tumbling to register their worst performances this month.

New York precious metal figures follow:

• Silver for December delivery rose 4 cents, or 0.2 percent, to $18.455 an ounce. It ranged from $18.150 to $18.64.

• Gold for December delivery climbed 70 cents to $1,141.90 an ounce. It ranged from $1,130.00 to $1,146.50.

• January platinum declined $8.10 to $1,443.90 an ounce. It ranged from $1,423.60 to $1,455.90.

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New York gold futures reached higher Wednesday to set a new record at $1,153.40 an ounce. Demand brightened for the yellow metal as the US dollar slid against world currencies. The other metals followed, hitting more than 12-month highs. Some settling occurred later, with platinum ending lower on the day.

In other markets, crude oil finished up for a third trading session while US stocks retreated from 13-month highs.

New York precious metal figures follow:

• Silver for December delivery finished up 2.8 cents, or 0.2 percent, to $18.415 an ounce. It ranged from $18.325 to $18.855 — the highest level since July 2008.

• Gold for December delivery advanced $1.80 to $1,141.20 an ounce. It ranged from $1,136.00 to $1,153.40 — an all-time high.

• January platinum declined $10.50, or 0.7 percent, to $1,452.00 an ounce. It ranged from $1,442.50 to $1,471.70 — the highest since Sept. 2008

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Good Day,

Today’s market news and analysis roundup begins with the -by now- ‘normal’ observance of yet another price record having been achieved by gold. During the hours preceding the New York session’s opening, spot gold touched the $1150 level (plus 30 cents) as the US dollar broke under the 75 mark on the trade weighted index once again. The metal remains overbought and continues to dart around in uncharted territory. Other commodities also climbed, with oil rising back towards $80 a barrel and copper to 13-1/3 month highs near $7,000 a tonne, as the US currency traded at 1.493 against the euro. This morning’s main trading focus was on US CPI figures and US housing starts.

Gold traders were looking for CPI-based clues as to the next direction of trade, both due to its effect on the currency markets and on bullion itself, which is often seen as an inflation hedge. But, at this juncture, we rather feel that any news is translated into "bullish-eze." "Low inflation pressures are traditionally a negative for gold prices," said HSBC analyst James Steel in a market note. "If, however, weak inflation data are seen as allowing the Fed to continue to pursue easy monetary policies, this may be seen as supportive of gold."

As it turns out, inflation figures came in higher than expected, rising 0.3% - driven mainly by an increase in energy and commodity prices. Core CPI was seen at 1.7% over the past year. The inflation data should of course help gold, but the dollar turned up slightly after the news release, although sources we polled were not sure whether to point at the inflation numbers or the very poor housing starts figures. Read the rest of this entry »

Precious metals were mixed on Tuesday following explosive gains from the day prior. Gold edged up slightly despite a stronger US dollar. Crude oil continued to stay atop a one-month low. US stocks registered modest gains to remain at ‘09 highs.

New York precious metal figures follow:

• Silver for December delivery fell 1.3 cents, or 0.1 percent, to $18.387 an ounce. It ranged from $18.085 to $18.435.

• Gold for December delivery rose 20 cents to $1,139.40 an ounce. The yellow metal ranged from $1,127.80 to $1,142.00.

• January platinum gained $17.90, or 1.2 percent, to $1,462.50 an ounce. It ranged from $1,433.50 to $1,464.60.

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Commodities were on fire Monday as another drop in the US dollar weighed into the mix. New York gold futures surged 2.0 percent to a fresh all-time high while silver soared 5.9 percent. Crude oil rebounded from a one-month low. US stocks joined in with their own rally, as the major indexes reached new ‘09 highs.

New York precious metal figures follow:

• Silver for December delivery soared $1.02 to $18.40 an ounce. It ranged from $17.475 to $18.450.

• Gold for December delivery jumped $22.50 to $1,139.20 an ounce. It ranged from $1,119.5 to $1143.00 — a new all-time high.

• January platinum surged $22.90, or 4.0 percent, to $1,444.60 an ounce. It ranged from $1,393.8 to $1,458.20.

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Carry On

Good Day,

With but a week to go before its December options expire, gold bullion tracked a further accelerating, and nearly vertical ballistic trace overnight, as a slew of buy stops hit the market just moments after opening for electronic trade. Some 2,000 contracts went through the order pipeline in the initial minutes of trading - not something one sees on a routine basis. The yellow metal eventually set a fresh record spot peak at 1134.20 during the night, as the dollar fell precipitously towards the 75 mark on the trade-weighted index, and then eventually broke under it.

Carl Johansson, analyst over at Belgium’s GoldEssential.com  wrote that he believed that "the orders [seen] on [market] opening were too large to be mere coincidence. A similar comment was made by a bullion trader at Commerzbank who saw that "someone had an interest in making a new high" and that " there are no bullish news that can give a reason for the move, so maybe someone is playing games and trying to protect their position." Talk of $1150 gold subsequently became the order of the new trading day in Asian and European overnight markets.

Johansson added that "option plays could also steer  the market over the next few days, with the expiration of the December gold options now only 7 days away (Nov 23), but warned that prices could succumb to heavy profit taking once the weight of pending options and the attached expectations were lifted from the market’s shoulders." Profit-taking. Now there is a phenomenon that has been hardly visible at all since the first session in September. Read the rest of this entry »

Precious metals were up and down through much of the week as the US dollar mostly set gold’s direction. While metal futures finished with higher weekly gains in New York, silver was the standout in London logging a 1.2% loss. Oil slipped to a one-month low Friday following weaker than expected US consumer confidence numbers. In stocks, European indexes ended mixed on Friday but higher on the week while US indexes were positive both ways, enjoying a second consecutive up week.

In London bullion weekly figures, gold rose 0.7 percent, silver fell 1.2 percent and platinum advanced 0.9 percent. Friday precious metals prices follow:

London silver closed to $17.32 an ounce, falling 20 cents from last Friday’s close. New York December silver futures ended at $17.38 for a weekly advance of a half penny.

London gold was fixed at $1,104.00 an ounce, rising $7.25 this week. New York gold for December delivery finished at $1,116.70 for five-day gain of $21.00.

London platinum ended at $1,359.00 an ounce, climbing $12.00 since last Friday’s close. New York platinum for January delivery ended at $1,388.70, surging $40.50 on the week. Read the rest of this entry »

Friday the 13th did not prove unlucky, at least as far as the “Old World” is concerned. The NY Times reported this morning that: “The 16-country euro zone has officially joined the United States and Japan out of recession, after figures showed its economy grew by 0.4 percent in the third quarter from the previous three-month period. However, the rise reported by the EU’s statistics office Eurostat was not as large as the 0.6 percent most economists had been predicting, as growth in major economies fell short of forecasts.”

The euro was lifted by the news and gained ground against the US dollar (rising to 1.492 from 1.486 earlier this morning) ahead of statistical news releases concerning the US economy. Whatever risk aversion was present in the markets early this morning, dissipated later on. A one-two punch coming from the widest trade gap in a decade and from once again swooning consumer sentiment set markets off in a different than expected direction by mid-morning. To wit, the Dow gained (?!)nearly 100 points after the poor data and metals rose. Carry on, so to speak…

Gold’s initial small gains turned into larger ones by noontime in NY. The carry trade resumed and quickly lifted oil (which had been down on ample inventories and fading demand) back towards $77 per barrel, copper and zinc, and of course precious metals. At last check gold was ahead by $13 per ounce, quoted at $1115.30 against a 0.50 drop on the dollar index (shown at 75.19). Read the rest of this entry »

New York gold futures on Thursday broke away from an eight day winning streak, falling for the first time in November. The yellow metal retreated from a new all-time high that was reached earlier in the morning after the US dollar rebounded from a 15-month low. Platinum and silver also declined, as did crude oil. US stocks closed sharply lower.

New York precious metal figures follow:

• Silver for December delivery fell 27.2 cents, or 1.6 percent, to $17.265 an ounce. It ranged from $17.350 to $17.780.

• Gold for December delivery slid $8.00, or 0.7 percent to $1,106.60 an ounce. It ranged from $1,103.70 to $1,123.40 — once again, an all-time high.

• January platinum declined $6.40, or 0.5 percent, to $1,363.20 an ounce.

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