Gold Dips Ahead Of Fed Meeting

Gold eased on Tuesday as investors turned their back on the metal ahead this week's Federal Reserve meeting on interest rates, which may offer directions to the dollar and precious metals.

Gold often takes cue from movements in the dollar because of its role as an alternative investments to currencies, stocks and bonds. Trading was thin with Japanese players away for a holiday.

Gold fell to $890.00/891.00 an ounce from $891.65/892.65 late in New York on Monday, when it hit an intraday day high of $895.50 an ounce on speculative buying driven by record high oil CLc1.

The metal was still trading well below a lifetime high of $1,030.80 an ounce hit on March 17, with attempts to revisit the level met by heavy profit taking.

"Everybody is waiting for the Fed," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

"I think gold has to stay above these levels before it can charge higher again. The range is still the same at between $880 to $900 for today and tomorrow."

The euro edged up to $1.5653 , while the dollar was steady against the yen 104.13 yen in thin trade as dealers awaited the outcome of the Fed's two-day policy meeting which ends on Wednesday.

Gold Might Loose Its Shine

Last week, gold prices declined below $900 an ounce. At the outset, a short-term weakness seems to have fully set in gold, despite a minor recovery on Friday to $889.

A major reason for gold’s fall last week was the strengthening of dollar. With the US President, Mr George Bush, saying that things are likely to look up from this week, we may see gold’s sheen wearing off a little more this week. Among other dampeners for gold last week was the World Gold Council’s report for the first quarter of this year. The report shows fall in demand across all sectors.

In particular, jewelery demand has declined sharply in the first quarter, basically since gold prices had ruled high during the period. It even touched a record $1,034 on March 17. The overall indication is that physical demand for the yellow metal is yet to see any significant pickup. In the futures, too, there have been interesting developments, signalling this fall.

Long speculators have been cutting down their holdings. Open interest of long speculators, who make up 47 per cent of the non-commercial holdings in gold, has declined to 2.02 lakh from 3.15 lakh that was witnessed when gold was at its peak. Other long position holders also seem to be shedding their holdings.

After a 3 week low, Gold prices rise

Gold rose nearly one percent on Friday, rebounding from three-week lows as weaker prices attracted bargain hunters and a recovery in oil lifted bullion’s appeal as an inflation hedge.

But gold was expected to face downward pressure again after falling nearly 15 percent from last month’s record high. Near-term sentiment had also turned bearish it broke its 100-day moving average of just above $900 an ounce this week, they said.

Spot metal fell as low as $877.60 an ounce before rising to a high of $896.50. It was quoted at $887.50/888.50 against $885.25/ 886.45 in New York late on Thursday. Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange was up $4.30 an ounce to $893.70 an ounce.

Analysts said bearish market sentiment was also evident from large withdrawals from exchange-traded funds. Gold held in New York-listed StreetTRACKS Gold Shares, the world’s largest gold-backed ETF, fell about 50 tonnes to 591 tonnes in the last two sessions.

A firmer dollar makes gold costlier for holders of other currencies and often lowers bullion demand. The metal is also generally seen as a hedge against oil-led inflation. In other precious metals, platinum partly recovered after falling to a three-week low of $1,907 an ounce. It was last quoted at $1,935/1,950, still down from $1,961.50/1,971.50 late on Thursday. It hit a record high of $2,290 on March 4.

Gold Prices Fall As $US Gains On Euro

Gold prices fell on Wednesday as the dollar gained ground against the euro, prompting bullion investors to liquidate long positions amid weak buying sentiment, traders said.

The US active gold contract for June delivery settled down $US16.20, or 1.8 per cent, at $US909 an ounce.

Spot gold sank to an intraday low of $US897.10 an ounce and was at $US906.10, well below levels of $US921.35 late in New York trade on Tuesday.

Platinum fell 2 per cent to $US1,975.50 an ounce on the declines in gold, and was last quoted at $US1,997 against $US2,022.50, its Tuesday US close.

Platinum faced pressure from news that Mitsui Mining and Smelting had developed a new catalyst for diesel car engines that replaces the use of platinum with silver, a less conventional but much cheaper metal.

Silver edged down to $US17.21 an ounce from $US17.685 late in New York on Tuesday, while palladium fell to $US444.50 versus its previous close of $US454.

Gold Prices Rise On Strong Oil

Gold added $US7.60 to settle at $US925.20 a troy ounce on the Comex division of the New York Mercantile Exchange.

Higher oil prices and a lower US dollar were the "primary factors" supporting gold futures, said Andrew Montano, director of precious metals at Scotia Mocatta.

But the metal's gains were relatively mild, especially as the euro hit a record high of $US1.6020 against the US dollar, and May crude oil hit a Nymex record high for the sixth straight trading day, this time at $US119.90 a barrel.

In other metals trading, May silver rose US35 cents to settle at $US17.71 an ounce, July platinum climbed $US10.10 to $US2037.40 an ounce, June rose US90c to $US463.40 an ounce.

The most-active July copper contract rose US9.20c to settle at $US3.9585 a pound. A strike against Chilean miner Codelco, coupled with ongoing strength in crude oil but weakness in the US dollar enabled copper futures to close sharply higher overnight, market participants said.

Gold prices tumble by Rs 325

Gold prices tumbled by Rs 325 to Rs 12,060 per 10 gram on the bullion market on Saturday on aggressive selling by stockists triggered by steep fall in its prices in global market.

Selling pressure gathered momentum after reports that the gold fell the most in two weeks in global markets as dollar rebounded from an all-time low against the euro, reducing the appeal of the precious metal as an alternative investment.

Silver also dropped in line with gold and reduced offtake by industrial units.

Marketmen said despite busy ongoing marriage season steep fall in its prices in the international market mainly attributed to hefty plunge.

The dollar rose against the euro and the yen on speculation that financial companies will survive the credit crisis. Gold in New York dropped by $ 27.20 to $915.20 an ounce and silver futures for May delivery declined 48.5 cents to 17.82 dollar an ounce.

Standard gold and ornaments tumbled by Rs 325 each to Rs 12,060 and Rs 11,910 per 10 grams respectively.

Sovereign followed suit and lost Rs 50 at Rs 9900 per piece of eight gram.

Gold prices move down

Gold prices moved down in the bullion market here during the week on poor demand coupled with fresh stockists offerings on the back of lower global advices, while silver prices firmed up on mild industrial demand.

On Thursday, standard gold rose to Rs 12,260 on persistent stockists buying in view of current marriage season coupled with strong rally in global market. Pure gold (99.9 purity) also rose to Rs 12,315. However, standard gold (99.5 purity) ended lower at Rs 11,895 as against the last weekend's level of Rs 11,990, showing a loss of Rs 95 per 10 grams.

Pure gold (99.9 purity) also finished lower at Rs 11,950 from the last weekend's level of Rs 12,050, disclosing a loss of Rs 100 per 10 grams. Silver ready (.999 fineness) opened lower at Rs 23,410, but recovered afterwards to Rs 24,480 before ending at Rs 23,945 as against Rs 23,780, showing a gain of Rs 165 per kilo.

In New York, record highs in crude oil and the euro, combined with ongoing uneasiness about inflation, led to a sharp rally in gold and other precious metals on Wednesday, a trader said. June gold rose By $16.30 to $948.30 an ounce on the Comex division of the New York Mercantile Exchange.

Comex May silver climbed by 47.5 cents to $18.32. In Hong Kong, gold prices rose to $949.70/950.40 per ounce and in London gold shot up to $951.00 per ounce.

Gold futures plummet to 2-week low as dollar gains on euro

Gold prices plunged to a two-week low Friday after the dollar gained some muscle against the euro, giving investors reason to sell the metal traditionally viewed as an inflation hedge.

Other commodities traded mixed, with crude oil surging to a new record of $117 and wheat prices plummeting.

The dollar edged higher against the 15-nation euro, rebounding from a record low reached Thursday after European officials expressed concern that its strength was becoming harmful. Luxembourg Prime Minister Jean-Claude Juncker, the head of the euro finance ministers' group, told reporters Thursday that the euro was moving in a "direction I don't consider desirable."

The euro bought $1.5795 in afternoon trading, down from $1.5888 late Thursday. A stronger dollar encourages investors to sell hard assets like gold and silver, which are viewed as inflation hedges since they're known for holding their value in times of rising prices.

Gold for June delivery dropped $27.70 to settle at $915.20 an ounce on the New York Mercantile Exchange, after earlier falling as low as $907.30, its lowest level in two weeks.

Gold And Silver Prices

Gold ended lower after hitting a three-week high above $950 an ounce on Thursday, as a slight recovery in the dollar prompted profit-taking in the metal.

But near record-high oil prices have lifted gold's appeal as a hedge against inflation and are seen underpinning the market.

Spot gold rose as high as $952.60 an ounce and was last at $938.90/939.70 at 2:15 p.m. EDT (1815 GMT), against $943.90/944.70 in New York late on Wednesday, when the metal gained 2 percent.

The euro retreated from a record high against the dollar after Eurogroup head Jean-Claude Juncker said excessive exchange rate volatility was bad for global growth and called euro gains against the dollar "undesirable."

Gold often moves in the opposite direction of the dollar, as the metal is traditionally considered an alternative investment and a safe-haven asset.

But the metal got support from oil, which set a record above $115 a barrel as a fall in U.S. gasoline inventories raised supply shortage concerns ahead of the summer driving season.

U.S. crude futures ended 7 cents lower at $114.86 a barrel.

James Steel, metals analyst with HSBC in New York, told clients in a note that gold might require increasingly dire news to keep driving its safe-haven appeal and prices higher.

Steel also said that a combination of rising inflation and Federal Reserves rate cutting had been a main driver of gold's rally.

In other markets, U.S. gold futures for June delivery settled down $5.40 at $942.90 an ounce, after Wednesday's rise to a 2-1/2 week peak.

Platinum rose as high as $2,063 an ounce and was last quoted at $2,042/2,052, up from $2,015/2,025 in the U.S. market late on Wednesday.

"The platinum story continues to remain favourable, especially now that the spot price seems to be working its way through the $2,040-$2,045 range resistance," Michael Jansen, analyst at J.P. Morgan Securities, said in a note.

"We continue to believe that the power problems in South Africa will hamstring both output from existing operations and the efforts by miners to bring on new production. We continue to see platinum working its way back towards the $2,200 level."

Silver climbed to a one-month high of $18.74 an ounce and was last at $18.23/18.28, against $18.28/18.33 late on Wednesday. Palladium was up $1 at $456/461 an ounce.

Gold Slides On Profit Booking

Gold dropped on Wednesday as buying interest subsided after an oil-driven rally the previous day, and dealers expect volatility to persist with a firming U.S. dollar weighing on sentiment.

Gold powered to a record high of $1,030.80 an ounce on March 17 but tumbled to a two-month low of $872.90 in early April in the down draft of a broad commodities sell-off.

It has firmed since then, but is struggling to retest a key resistance of $950.

Gold was trading on Wednesday in Asia at $925.60/926.40, below late New York levels of $927.60/928.40.

It was backing away from an intraday high of $936.50 on Tuesday when oil hit a record high above $114 a barrel and lifted gold's appeal as a hedge against inflation.

Gold has risen more than 20 percent in 2008 on speculative buying ignited by rising oil prices and expectations of further interest rate cuts in the United States, which reduce the dollar's appeal.

Dollar Down, Gold Up

he U.S. dollar was mixed against other major currencies in European trading Wednesday. Gold prices rose.

The Euro was quoted at $1.5616, up from $1.5601 late Tuesday in New York. Later, in midday trading in New York, the euro fetched $1.5629.

Other dollar rates in Europe, compared with late Tuesday in New York, included 102.76 Japanese yen, up from 102.04; 1.0149 Swiss francs, up from 1.0130; and 1.0175 Canadian dollars, down from 1.0212.

The British pound was quoted at $1.9822, down from $1.9833.

In midday New York trading, the dollar bought 102.72 yen and 1.0136 Swiss francs, while the pound was worth $1.9833.

Gold traded in London at $889.70 bid per troy ounce, up from $879.45 late Tuesday. In Zurich, gold traded at $888.10 bid per troy ounce, up from $879.45.

Silver traded in London at $17.02 bid per troy ounce, up from $16.56.

Gold Bounces Back To gain Over 1 %

Gold rebounded to gain more than 1 percent on Wednesday after hitting two-month lows in the previous session as firmer oil and a slightly weaker dollar against the euro prompted investors to snap up the metal.

But analysts said the broad commodities sell-off in recent days had damaged near-term sentiment and bullion investors would be cautious in chasing the metal higher ahead of US payrolls data on Friday that could influence the dollar. Gold hit a high of $894 and was at $891.50/892.40 an ounce, up from $884.20/885.40 late in New York on Tuesday, when it fell as low as $872.90.

A decline of three percent on Tuesday took overall losses to 15 percent since gold hit a record high of $1,030.80 last month, making bullion attractive for physical dealers. A weaker dollar makes gold cheaper for holders of other currencies and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation. In other precious metals markets, US gold futures for June delivery on the COMEX division of the New York Mercantile Exchange rose $7.8 an ounce to $895.60. Spot platinum rose 1.6 percent to $1,948/1,958 an ounce from $1,918/1,928 on Tuesday, when it fell to a low of $1,888. Silver rose to $17.03/17.08 from $16.81/16.86 an ounce on Tuesday, when it hit a two-month low of $16.32. Palladium rose $2 to $437/442 an ounce.

Gold recovers but still near 2-month low

Gold regained some strength on Wednesday on a technical rebound after falling to a two-month low the previous day when a rise in the dollar and a US stock rally sparked selling in precious metals. Gold rose to $887.10/887.90 an ounce from $884.20/885.40 late in New York.
Gold hit a low of $872.90 on Tuesday well below a record high of $1,030.80 struck on March 17. Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange added $3.4 an ounce to $891.3 an ounce. The dollar vaulted higher on Tuesday after major banks UBS and Lehman Brothers raised a combined $19 billion to shore up their balance sheets and investors took the view that the worst of the banking sector's problems may be over.

Spot platinum rose to $1,919/1,929 an ounce from $1,918/1,928. It dropped to a one-week low at $1,888 on Tuesday. The most active Tokyo platinum futures confirmed 90 yen per gram to 6,182 yen, having hit limit down on Tuesday.

Silver edged up to $16.91/16.95 an ounce from $16.81/16.86 an ounce. Spot palladium fell to $434/439 an ounce from $435/440 an ounce.

Gold, silver recover

Gold and Silver recovered on the bullion market on renewed stockists demand in view of higher global advices.

Gold rose in Asia after the biggest weekly decline in prices in 25 years enticed buying from jewelers and as the dollar fell on concern that US consumer confidence dropped to a five-year low.

Gold traded as high as $927.20 an ounce, 10 per cent down from the record 1,032.70 reached on March 17. Bullion for immediate delivery gained $10.38 to 925.68 an ounce and silver 2.2 per cent to $17.42 an ounce.

Gold in Hong Kong closed higher at $931.60/932.20 per ounce as against $921.00/921.70 per ounce previously and in London, it was fixed higher in the morning at $930.65 per ounce as against $925.75 per ounce previously.

Turning to the domestic market, standard gold (99.5 purity) firmed up by Rs 110 per ten grams to Rs 12,115 from Rs 12,005 previously.

Pure gold (99.9 purity) also looked up to Rs 12,175 from last close of Rs 12,065.

Silver ready (.999 fineness) moved up by Rs 325 per kilo to Rs 22,990 from Rs 22,665 previously.

Goald Prices Near 1 Month Low

Gold dropped and held near its lowest in a month on Tuesday, with its appeal as an alternative investment and a hedge against inflation weakened by a firming U.S. dollar and sliding crude oil prices.

Investors were on the sidelines after their confidence was shaken by a recent broad-based sell-off in commodities. Gold has lost more than 10 percent in value since spiking to an historic high of $1,030.80 an ounce on March 17.

Gold fell to $919.20/920.00 ounce from $920.90/921.70 an ounce in New York on Monday and was within sight of last week's one-month low of $904.65 an ounce.

"If gold were to start heading lower again, say below $900 an ounce, that might create a temporary cycle of further selling," said an analyst at Commonwealth Bank of Australia in Sydney.

"As investors' sentiment turned, gold was then especially vulnerable to that change in sentiment. I think it's difficult to see which way gold would go in the very short term."

Platinum fell while silver and palladium gained but stayed below recent highs. Precious metals, oil, grains and other agricultural products tumbled last week in a wave of selling as funds cashed out, taking profits at record high prices.

The dollar held onto gains after better-than-expected U.S. housing data revived optimism towards the world's biggest economy. The euro hardly changed at $1.5433 -- well below a record high of $1.5905 hit last week.

Gold Prices decline on profit booking

Gold prices last week hit a record $1,030.90 an ounce, but fell sharply and closed at $917, far lower than the previous week’s close. In fact, the yellow metal’s fall from the peak has been so sharp that it has shed 11.5 per cent.

What the market is currently witnessing is profit-booking and analysts have no two views on gold being an asset class.

The crash in the equities market, lead by the Bear Stearns saga, was the primary reason for the profit booking — more than the Fed’s 75 basis point rate cut — and the precious metal’s fall. The fact is that funds are ensuring that they are left with profits in at least the commodities counter, after being wrapped hard on the knuckles in the equities market. After falling to $903, gold has recovered to end the week at $917.

According to Mr Anul Goel of Kotak Commodity Services Ltd, gold witnessed a severe rejection on the day it peaked by forming a gravestone doji and latter a shooting star candle-stick pattern on the charts. In a nutshell, it means that the current trend can come to a pause but not necessarily turn down as it could have also been sideways. On the next day, a one month up trendline (red) was broken on a closing basis with decent volumes. According to Mr Anul, the Fed rate cut shows more concern towards containing inflation, thereby putting a downward pressure on the gold prices that is mainly used as an inflation hedge. On the same day a much longer trend line was also broken with huge volumes and there was a sharp fall in open interest exhibiting longs being liquidated.

Gold: The Safe Investment

With the sock market in a bear hug, a wave of fear has gripped all the investors. In these uncertain times, you may have also found yourself struggling, and sometimes worried, on how to get the right portfolio mix and avoid the bear’s claws.

I know a friend of mine, who ran out of his wits after his year-long investments eroded in a matter of few seconds. If analysts are to be believed, in such turbulent phases, you can always look up to gold as an investment option not only as an insurance against the choppy markets but for better returns as well.

The Golden Scenario :

With an expected slower US growth momentum, Fed rate easing, a weakening dollar, rising oil prices and heightened geopolitical concerns, gold prices appear to be firmly supported in the months ahead. Strong investor demand coupled with strong jewelery demand from Asia and the Middle East is also likely to push the prices. “In the present context, gold is expected to provide better capital appreciation, provided it is bought at a right price. It is also a good hedge against inflation,” says Mukesh Agarwal, director of Wealthcare Securities.

Strong fundamentals put aside, gold has also given a return of 18% in the first two months of 2008. “Today, it is the most recession-proof asset and is actually playing the role of insurance in the investor’s portfolio,” says Vandana Bharti, senior research analyst (commodity) at SMC.

Gold Prices Slide

April gold futures fell $25.30, or 2.7%, to end at $920 an ounce on the New York Mercantile Exchange. On Wednesday, gold plummeted $59 as traders began selling most commodities, many of which had recently rallied to historic highs.

After hitting a record high of $1,034 an ounce Monday, gold's subsequent sharp drop led it to post a 8.3% decline for the shortened week. U.S. markets, including the Nymex, will be closed Friday.

Among other metals, copper for May delivery lost 6.35 cents, or 1.7%, to end at $3.53 a pound. June palladium slid $18.40, or 3.9%, to $446.05 an ounce. April platinum lost $9.70, or 0.5%, to $1,877.30 an ounce.

May silver fell $1.59, or 8.6%, to $16.85 an ounce.

Alongside metals, crude-oil futures also continued to fall, with the May contract losing 70 cents, or 0.7%, to $101.94 a barrel.Other commodities also slid, with the Reuters-Jefferies CRB index off 1.7%

Gold As Investment

The usual benchmark for the price of gold is known as the London Gold Fixing, a twice-daily (telephone) meeting of representatives from five bullion-trading firms. Furthermore, there is active gold trading based on the intra-day spot price, derived from gold-trading markets around the world as they open and close throughout the day.

Today, like all investments and commodities, the price of gold is ultimately driven by supply and demand, including hoarding and disposal. Unlike most other commodities, the hoarding and disposal plays a much bigger role in affecting the price, because most of the gold ever mined still exists and is potentially able to come on to the market for the right price. Given the huge quantity of hoarded gold, compared to the annual production, the price of gold is mainly affected by changes in sentiment, rather than changes in annual production.

According to the World Gold Council, annual mine production of gold over the last few years has been close to 2,500 tonnes. About 3,000 tonnes goes into jewelry or industrial/dental production, and around 500 tonnes goes to retail investors and exchange traded gold funds. This translates to an annual demand for gold to be 1000 tonnes in excess over mine production which has come from central bank sales and other disposal. Demand from the electronics industry is rising by 11% a year, jewelry by 19%, and industrial and dental by 21%.

Central banks and the International Monetary Fund play an important role in the gold price. At the end of 2004 central banks and official organizations held 19 percent of all above-ground gold as official gold reserves. The Washington Agreement on Gold (WAG), which dates from September 1999, limits gold sales by its members (Europe, United States, Japan, Australia, Bank for International Settlements and the International Monetary Fund) to less than 400 tonnes a year. European central banks, such as the Bank of England and Swiss National Bank, have been key sellers of gold over this period.

Although central banks do not generally announce gold purchases in advance, some, such as Russia, have expressed interest in growing their gold reserves again as of late 2005 . In early 2006, China, which only holds 1.3% of its reserves in gold [16], announced that it was looking for ways to improve the returns on its official reserves. Many bulls hope that this signals that China might reposition more of its holdings into gold in line with other Central Banks.