New York gold futures rose for a second straight day on Tuesday, although prices closed up just 0.3 percent. Safe-haven buying was credited for gold’s gains which were supported by worries over Europe’s credit crisis, plunging equities and tensions on the Korean peninsula.
Other metals declined, however. Platinum and palladium plunged the most over continuing concerns that another economic slowdown would kick in and weaken their industrial demand. They suffered respective losses of 2.8 percent and 5.1 percent. Silver retreated 1.2 percent.
In other markets, crude oil fell 2.1 percent, while a late-day rally erased most losses in U.S. stocks. The Dow notably declined only 22.8 points after plummeting nearly 300 points earlier in the day.
New York precious metal figures follow:
Gold for June delivery climbed $4.00 to $1,198.00 an ounce. It ranged from $1,185.20 to $1,200.40.
Silver for July delivery declined 21.9 cents to $17.781 an ounce. It ranged from $17.530 to $17.990.
- July platinum fell $42.60 to $1,491.90 an ounce. It ranged from $1,484.50 to $1,532.00.
- June palladium plunged $23.15 to $430.40 an ounce. It ranged from $423.00 to $446.70.
In notable bullion quotes of the day:
"Gold is being bought because of the level of international fear out there," Leonard Kaplan, the president of Prospector Asset Management in Evanston, Illinois, was quoted on Bloomberg. "Europe is buying because of the decline in the euro, and Asia is buying because they’re scared to death of North Korea."
"People are going long again with equities that continue to slide. All equities are bearish at the moment … it’s probably going to get worse before it gets better," Standard Bank analyst Walter de Wet was quoted on Reuters. "If gold goes below $1,180 it’s definitely a good buy. We think it’s going to head higher and end the year above $1,300."
"The good news/bad news routine continued to be the order of the day as regards Indian gold demand. Spurred by hefty price declines in April, the country’s gold imports surged by 71% (to a monthly figure of 34.2 tonnes)," wrote Jon Nadler, senior analyst at Kitco Metals, Inc. "Nowadays, however, the local price is near a record high and sales are anything but stellar." [Read Nadler’s full morning commentary.]
In PM London bullion, the benchmark gold price was fixed earlier in the North American day to $1,198.25 an ounce, gaining $11.25 from the price on Monday. Silver fell 15 cents to $17.630 an ounce. Platinum settled at $1,493.00 an ounce, declining $32.00. Palladium ended down $22.00 to $428.00 an ounce.
Oil and gasoline prices
Crude oil plunged, but "futures trimmed some of their losses Tuesday as commercial buyers snapped up crude at bargain-basement prices and stocks came off their lows," wrote Claudia Assis from MarketWatch.
Bloomberg today cites a report indicating oil’s 20 percent loss in the past month will likely end at $66 a barrel.
"We look for a downside resolution toward the confluence of support between $66.11 and $65.87," Barclays Capital analysts led by MacNeil Curry in New York said in a report yesterday that was cited on Bloomberg.
New York crude oil for July delivery tumbled $1.46 to $68.75 a barrel.
The national average for regular unleaded gasoline fell 1.3 cents to $2.780 a gallon, according to AAA fuel data. The current average is 7.9 cents lower than last week, 7.4 cents less than a month back, but 35.6 cents higher than the average from a year ago.
U.S. stocks "staged a furious late-day rally on Tuesday to push the S&P 500 into positive territory as the focus shifted from European debt woes to buying after shares hit six-month lows," wrote Chuck Mikolajczak of Reuters.
"There’s been very little news to cause investors to think the market is going to rally against the backdrop of global uncertainty," Len Blum, managing director at Westwood Capital, was cited on CNNMoney.com. "We’re one international economy right now, and it would be hard for the U.S. to have meaningful growth if Europe is having a slowdown.
The Dow Jones industrial average fell 22.82 points, or 0.23 percent, to 10,043.75. The S&P 500 Index rose 0.38 points, or 0.04 percent, to end at 1,074.03. The Nasdaq Composite Index retreated 2.60 points, or 0.12 percent, to 2,210.95.
In a coin news item that is a clear reminder of a slower economy where less change is used, the United States Mint today published the Hot Springs quarters mintages. The coins are the first issue from the new U.S. Mint America the Beautiful Quarters™ Program.
The latest production figures reveal they are now also the most scarce quarter design in generations. The Mint struck 59.6 million of them, with 29 million made in Denver and 30.6 million produced in Philadelphia. As a stark comparison, the first Delaware quarter in the 50 State Quarters Program® had a total mintage of 774.8 million. For more, read the article Hot Springs National Park Quarters Mintages Scarcest.
by Jon Nadler, Kitco Metals Inc.
Global equity markets sagged overnight as apprehensions about a zonal slowdown in Europe undermined investor appetite for taking much if any risk. The European debt crisis remained front and centre on global market stages as the IMF presses Spain for further budget cuts and what it called a ‘labour overhaul.’ Meanwhile, currency traders continued to flog the euro as rising confidence in its eventual parity vis a vis the greenback became manifest once again.
Albeit the common currency’s decline has been rather significant, it has not hitherto been too much of a case of a ‘free-fall’ and thus the ‘i’ word has not yet been used in conjunction with it. However, it has been indirectly and not very subtly hinted that the ECB will use intervention if it feels it has to. Thus, sellers of the euro are treading fairly lightly as they try to push it towards the 1.20 mark.
As opined last week, this is still a game of ‘chicken’ and bluff-calling between speculators and officialdom. FIFA has nothing on this battle, it would seem. The spectacle is intense; the euro gained 4% over two days last week and is fast giving back much of that gain this week.
Shorting the euro is as popular a market sport as bashing the dollar was late last year. Even if a soft common currency implies better chances at export growth for the economically-challenged region. We could have the makings of a bear trap here and the ECB…bears close-watching. Nearly 35 central bank currency market interventions have been recorded over the past decade, with the Bank of Japan and the Swiss National Bank taking home the Oscar for ‘most active intervention in a supporting role.’
What is benefiting from the euro’s woes? Why, the US dollar, of course. Its share of global currency reserves got a hefty boost in Q1 as the outlook for better US growth and the euro’s crumble left little in the way of alternatives to consider. The greenback’s share of reserves now probably stands at just above 62% of the pie while the euro’s slice shrank to a little above 27% of same.
What was a ‘diversification’ out of dollars in 2009 is now apparently a trend in the opposite direction. Behold the higher-than 87.00 print on the US dollar index as of this morning. A figure that, just a few months ago (see Q4), was seen in reverse number order, amid promises that it would drop to under the 70 mark. All is quiet on the dollar-bear front, these days.
Spot bullion prices opened flat-to-lower this morning as overnight losses of nearly 300 points in the Nikkei index raised fears that the Dow would follow and that such declines will engender more margin calls (and related asset liquidations to pay for same). Gold started with a 40-cent gain at $1192.70 after having once again made an attempt at stabbing the $1200 prize and coming $2 shy of it overnight.
No such luck in silver, which dropped 22 cents out of the gate, to open at $17.67 the ounce. As Kitco’s AM Roundup indicates, gold bulls need to show some mettle in coming days in order to avoid ‘serious near-term chart damage.’ The yellow metal is currently bouncing to correct the initial decline from its May 14 high at $1250.45.
According to the Elliott Wave perspective, "prices have pushed to initial resistance near $1200, but it would not be unreasonable if they decide to extend a bit higher. Subsequent resistance is in the $1208-$1229 area. Once gold closes beneath the lower channel line, which crosses $1128.50 tomorrow and is rising at approximately $1 per day, the price peak will be confirmed and gold should rapidly descend to the $950-$1000 area. Even lower targets remain probable."
The good news/bad news routine continued to be the order of the day as regards Indian gold demand. Spurred by hefty price declines in April, the country’s gold imports surged by 71% (to a monthly figure of 34.2 tonnes). Nowadays, however, the local price is near a record high and sales are anything but stellar. In fact, sales –as in sell-backs of the scrap variety– are possibly about to hit the market. This, as local farmers prepare to buy seeds and fertilizer ahead of the ‘kharif sowing season.’ Such secondary supplies of gold and silver are projected to cut into the Indian metals import figures for May/June.
Platinum and palladium resumed their southerly headings with a $32 fall in the former (to $1495) and a $17 decline in the latter (to $428). Industrial buyers are sitting on the sidelines and are perceived to be awaiting lower prices once again.
ETF Securities Ltd. opines that platinum might indeed see a ‘soccer spike’ and hopefully not a ‘head-fake’ as the World Cup gets underway next month in S. Africa.
Power supplies to the mines that produce the metal may be diverted to light up the matches while the miners may have to light matches in order to continue to dig. State-owned utility Eskom is ‘confident’ that it will be able to supply sufficient juice to shed light on both customers.
The drama keeps escalating, but let us not lose focus of the fact that the footie event is but one-month long. Short-term effects are one thing, but technical analysts at Barclays Capital (that name just keeps popping up) envision palladium falling to around $380 per ounce following a ‘temporary gain’ courtesy of ETF attention and risk appetite.
Such appetite as well as assorted apprehensions were on display as of the last check, when US home price data (showing a 0.5% decline in March) lifted gold and kept crude under pressure. The Dow fell 220 points out of the starting gate and commenced the session at under the $10K level. Buckle up of continuing turbulence over the next 72 hours. Margin calls remain the air pockets to watch out for.
Kitco Metals Inc.
In addition to bullion American Silver Eagles that are already available, the United States Mint this year will also issue 5 oz. bullion America the Beautiful Silver Coins that are duplicates of the America the Beautiful Quarters. The first of five coins will be released this summer, with the remaining four to follow in short intervals. Check the above link to visit a sister site to CoinNews for more information on the series.