Palm oil declined on concern that stockpiles in Malaysia, the second-largest grower, may increase as exports slow after the end of the festival season.
The November-delivery contract dropped 1.1 percent to 3,018 ringgit ($1,013) per metric ton on the Malaysia Derivatives Exchange. Futures gained 2.5 percent last week, the first increase in six weeks.
Shipments from Malaysia may ease as importers stocked up ahead of the Muslim festival of Eid, celebrated last week. Malaysia’s palm oil exports fell 0.6 percent to 1.62 million tons in August compared with the previous month, independent market surveyor Intertek said Sept. 2. Shipments dropped 0.5 percent in the month, Societe Generale de Surveillance estimated on Aug. 29.
“Exports will be lower, as pre-stocking was already done in July,” Arhnue Tan, senior investment analyst at ECM Libra Capital Sdn., said by phone from Kuala Lumpur today. “The resulting impact could see stock levels go up. This will be bad news” for prices, she said.
Stockpiles dropped to 2 million tons in July from 2.05 million tons in June, while exports rose 9.1 percent to a record 1.73 million tons, the Malaysian Palm Oil Board said on Aug. 10. Production slipped 0.1 percent to 1.75 million tons in July. The board is scheduled to release output, inventory and shipment data for August on Sept. 12.
“Exports for August were much lower than industry expectations,” said Vimala Reddy, an analyst at Karvy Comtrade Ltd., said by phone from the Indian city of Hyderabad. “Bulk demand for edible oil is gradually decreasing. The main festive season has already come to an end.”
Demand would pick up again in a month’s time as the Hindu Diwali festival is celebrated at the end of October, Reddy said.
Soybean futures for November delivery climbed 11.25 cents, or 0.8 percent, to $14.4575 a bushel in Chicago on Sept. 2, capping a weekly gain of 1.6 percent, the third straight. All U.S. markets and government offices are closed today, in observance of Labor Day.
Palm oil for May delivery on the Dalian Commodity Exchange shed 0.5 percent to close at 8,996 yuan ($1,408) per ton, while soybean oil for delivery in the same month fell 0.6 percent to 10,426 yuan a ton.
Tuesday 6 September 2011
Copper Declines to One-Week Low as Slowing Economies May Cut Into Demand
Copper fell to a one-week low in London on speculation slumping economies will reduce demand.
An index of investor confidence in the euro region declined to a two-year low this month, Limburg, Germany Sentix said today. The MSCI World (MXWO) Index of shares fell 2.1 percent today.
“It’s more just the feeling that the macro outlook is weaker,” Jim Lennon, global head of commodities research at Macquarie Group Ltd. in London, said by phone.
Copper for three-month delivery declined $116, or 1.3 percent, to $8,960 a metric ton on the London Metal Exchange, the lowest closing price since Aug. 24. Copper for December delivery dropped 6.35 percent, or 1.5 percent, to $4.061 a pound on the Comex in New York by 6:40 p.m. in London.
Prices fell after German Chancellor Angela Merkel’s party suffered its fifth election loss this year following a campaign based on her handling of the euro-area debt crisis. Germany’s top constitutional court will rule on Sept. 7 in three cases challenging the country’s participation in a bailout of Greece and the euro-area rescue fund.
“Focus this week is likely to switch to the EU debt situation again as Germany’s government is voting on the EU bailout fund,” William Adams, an analyst at Basemetals.com in London, wrote in a report.
Stronger Dollar
Metals also declined as the U.S. Dollar Index headed for its longest winning streak since January, making dollar-priced commodities more expensive in terms of other monies.
Nickel for three-month delivery on the LME led declines among the six main metals traded on the exchange, falling 2.8 percent to $20,895 a ton. Zinc retreated 1.1 percent to $2,172 a ton, the lowest settlement since Aug. 22.
Aluminum dropped 2 percent to $2,387.50 a ton, lead slid 1 percent to $2,435 a ton and tin fell 1.2 percent to $23,950 a ton.
An index of investor confidence in the euro region declined to a two-year low this month, Limburg, Germany Sentix said today. The MSCI World (MXWO) Index of shares fell 2.1 percent today.
“It’s more just the feeling that the macro outlook is weaker,” Jim Lennon, global head of commodities research at Macquarie Group Ltd. in London, said by phone.
Copper for three-month delivery declined $116, or 1.3 percent, to $8,960 a metric ton on the London Metal Exchange, the lowest closing price since Aug. 24. Copper for December delivery dropped 6.35 percent, or 1.5 percent, to $4.061 a pound on the Comex in New York by 6:40 p.m. in London.
Prices fell after German Chancellor Angela Merkel’s party suffered its fifth election loss this year following a campaign based on her handling of the euro-area debt crisis. Germany’s top constitutional court will rule on Sept. 7 in three cases challenging the country’s participation in a bailout of Greece and the euro-area rescue fund.
“Focus this week is likely to switch to the EU debt situation again as Germany’s government is voting on the EU bailout fund,” William Adams, an analyst at Basemetals.com in London, wrote in a report.
Stronger Dollar
Metals also declined as the U.S. Dollar Index headed for its longest winning streak since January, making dollar-priced commodities more expensive in terms of other monies.
Nickel for three-month delivery on the LME led declines among the six main metals traded on the exchange, falling 2.8 percent to $20,895 a ton. Zinc retreated 1.1 percent to $2,172 a ton, the lowest settlement since Aug. 22.
Aluminum dropped 2 percent to $2,387.50 a ton, lead slid 1 percent to $2,435 a ton and tin fell 1.2 percent to $23,950 a ton.
Gold Rises as Growth, Debt Concerns Boost Demand
Gold rose above $1,900 an ounce on speculation that economic growth will slow and Europe’s debt woes will worsen, boosting demand for a protection of wealth.
European equities dropped after an election loss for German Chancellor Angela Merkel’s party spurred concern that support for bailing out Europe’s indebted nations may fade. Bullion jumped 3.1 percent on Sept. 2, the most in almost four weeks, as data showed the U.S. jobs market stalled in August, prompting renewed speculation that the country’s economy may be headed for a recession.
“With the implications of Friday’s U.S. payrolls report and intense focus on European sovereign issues this week, gold has two strong reasons to rally,” Edel Tully, a London-based analyst at UBS AG, wrote in a report. “Additional evidence of U.S. economic weakness raises the likelihood that the Federal Reserve will announce further easing this month. As European woes reclaim center-stage and in turn investor nervousness extends, these factors will support gold in the coming weeks.”
Gold for immediate delivery gained $17.82, or 0.9 percent, to $1,900.70 an ounce by 7:06 p.m. in London, after touching $1,903.52. The metal set a record at $1,913.50 on Aug. 23. In New York, gold futures for December delivery were up $26, or 1.4 percent, at $1,902.90 on the Comex, after touching $1,908.40. Floor trading in the U.S. was closed today for the Labor Day holiday.
The metal fell to $1,895 in the afternoon “fixing” in London, used by some mining companies to sell output, from $1,896.50 at this morning’s fixing.
Bull Market
Bullion is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify away from equities and some currencies. The metal is up 33 percent this year, outperforming global stocks, commodities and Treasuries. The metal climbed to a record priced in euros and British pounds today.
Merkel’s party yesterday suffered its fifth election loss this year after the chancellor failed to sway voters in her home state with a campaign based on her handling of the euro area’s debt crisis. European investor confidence fell to the lowest level in more than two years in September, a report showed today.
European sovereign-debt risk rose to a record based on closing prices, according to traders of credit-default swaps. World Bank President Robert Zoellick said in Beijing on Sept. 3 that the global economy is entering a “new danger zone” amid Europe’s debt difficulties.
Growth Concerns
“U.S. growth concerns and euro-zone debt concerns continue to overshadow markets,” James Moore, an analyst at TheBullionDesk.com in London, wrote in a report. Gold will be supported by “investors seeking to diversify from the volatile flows in equities.”
Gold exchange-traded-product holdings fell for a third day on Sept. 2, declining 1.7 metric tons to 2,142.4 tons, data compiled by Bloomberg show. Assets reached a record 2,216.8 tons on Aug. 8.
Silver for immediate delivery declined 0.5 percent to $43.0375 an ounce. Platinum rose 0.2 percent to $1,888 an ounce. Gold’s rally pushed its price above platinum today. An ounce of platinum bought 1.19 ounces of gold on average this year, data compiled by Bloomberg show. Palladium fell 1.3 percent to $764.50 an ounce.
European equities dropped after an election loss for German Chancellor Angela Merkel’s party spurred concern that support for bailing out Europe’s indebted nations may fade. Bullion jumped 3.1 percent on Sept. 2, the most in almost four weeks, as data showed the U.S. jobs market stalled in August, prompting renewed speculation that the country’s economy may be headed for a recession.
“With the implications of Friday’s U.S. payrolls report and intense focus on European sovereign issues this week, gold has two strong reasons to rally,” Edel Tully, a London-based analyst at UBS AG, wrote in a report. “Additional evidence of U.S. economic weakness raises the likelihood that the Federal Reserve will announce further easing this month. As European woes reclaim center-stage and in turn investor nervousness extends, these factors will support gold in the coming weeks.”
Gold for immediate delivery gained $17.82, or 0.9 percent, to $1,900.70 an ounce by 7:06 p.m. in London, after touching $1,903.52. The metal set a record at $1,913.50 on Aug. 23. In New York, gold futures for December delivery were up $26, or 1.4 percent, at $1,902.90 on the Comex, after touching $1,908.40. Floor trading in the U.S. was closed today for the Labor Day holiday.
The metal fell to $1,895 in the afternoon “fixing” in London, used by some mining companies to sell output, from $1,896.50 at this morning’s fixing.
Bull Market
Bullion is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify away from equities and some currencies. The metal is up 33 percent this year, outperforming global stocks, commodities and Treasuries. The metal climbed to a record priced in euros and British pounds today.
Merkel’s party yesterday suffered its fifth election loss this year after the chancellor failed to sway voters in her home state with a campaign based on her handling of the euro area’s debt crisis. European investor confidence fell to the lowest level in more than two years in September, a report showed today.
European sovereign-debt risk rose to a record based on closing prices, according to traders of credit-default swaps. World Bank President Robert Zoellick said in Beijing on Sept. 3 that the global economy is entering a “new danger zone” amid Europe’s debt difficulties.
Growth Concerns
“U.S. growth concerns and euro-zone debt concerns continue to overshadow markets,” James Moore, an analyst at TheBullionDesk.com in London, wrote in a report. Gold will be supported by “investors seeking to diversify from the volatile flows in equities.”
Gold exchange-traded-product holdings fell for a third day on Sept. 2, declining 1.7 metric tons to 2,142.4 tons, data compiled by Bloomberg show. Assets reached a record 2,216.8 tons on Aug. 8.
Silver for immediate delivery declined 0.5 percent to $43.0375 an ounce. Platinum rose 0.2 percent to $1,888 an ounce. Gold’s rally pushed its price above platinum today. An ounce of platinum bought 1.19 ounces of gold on average this year, data compiled by Bloomberg show. Palladium fell 1.3 percent to $764.50 an ounce.
Crude Oil Extends Drop on Signs of Slowing U.S. Economy, Rising Stockpiles
Oil extended declines in New York as investors speculated that signs of a weakening U.S. economy and increasing crude stockpiles indicate fuel demand will falter in the world’s biggest consumer of the commodity.
Futures slid as much as 3.8 percent before a report today that may show service industries grew at the slowest pace in more than a year. Crude supplies at Cushing, Oklahoma, the delivery point for West Texas Intermediate oil, rose 2.4 percent on Sept. 1 from Aug. 31, according to DigitalGlobe Inc. London- traded Brent widened its premium to U.S. prices.
“Oil benchmarks slipped again as fears of slowing global growth weighed on demand sentiment,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note today. “Oil prices should primarily take direction from equity markets, so expect further selling pressure this week as markets remain jittery ahead of major policy discussions.”
Crude for October delivery fell as much as $3.25 to $83.20 a barrel in electronic trading on the New York Mercantile Exchange and was at $83.75 at 10:30 a.m. Sydney time. Floor trading was closed yesterday for the Labor Day holiday and electronic trades will be booked with today’s transactions for settlement purposes. The contract slipped 2.8 percent to $86.45 a barrel on Sept. 2. Prices are 12 percent higher the past year.
Brent oil for October settlement was at $110.13, up 5 cents, on the London-based ICE Futures Europe exchange. The European benchmark was at a premium of $26.38 to U.S. futures, compared with a record close of $26.21 on Aug. 19.
Cushing Supplies
Crude stockpiles held in floating-roof tanks at Cushing rose 850,000 barrels to 35.6 million, satellite images taken by Longmont, Colorado-based DigitalGlobe show. The Energy Department said last week that supplies, including floating and fixed tanks, totaled 33.1 million barrels as of Aug. 26.
The Institute for Supply Management’s non-manufacturing index fell to 51 last month, the lowest since January 2010, from 52.7 in July, according to the median of 59 forecasts in a Bloomberg News survey before a release today. Citigroup Inc. cut its 2011 global economic growth forecast yesterday to 3.1 percent from 3.7 percent.
Japan’s Nikkei 225 benchmark stock index fell 1.2 percent in Tokyo trading and Australia’s S&P/ASX 200 slid 1.5 percent in Sydney today as concern that Europe’s debt crisis is worsening sapped demand for riskier assets.
Futures slid as much as 3.8 percent before a report today that may show service industries grew at the slowest pace in more than a year. Crude supplies at Cushing, Oklahoma, the delivery point for West Texas Intermediate oil, rose 2.4 percent on Sept. 1 from Aug. 31, according to DigitalGlobe Inc. London- traded Brent widened its premium to U.S. prices.
“Oil benchmarks slipped again as fears of slowing global growth weighed on demand sentiment,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note today. “Oil prices should primarily take direction from equity markets, so expect further selling pressure this week as markets remain jittery ahead of major policy discussions.”
Crude for October delivery fell as much as $3.25 to $83.20 a barrel in electronic trading on the New York Mercantile Exchange and was at $83.75 at 10:30 a.m. Sydney time. Floor trading was closed yesterday for the Labor Day holiday and electronic trades will be booked with today’s transactions for settlement purposes. The contract slipped 2.8 percent to $86.45 a barrel on Sept. 2. Prices are 12 percent higher the past year.
Brent oil for October settlement was at $110.13, up 5 cents, on the London-based ICE Futures Europe exchange. The European benchmark was at a premium of $26.38 to U.S. futures, compared with a record close of $26.21 on Aug. 19.
Cushing Supplies
Crude stockpiles held in floating-roof tanks at Cushing rose 850,000 barrels to 35.6 million, satellite images taken by Longmont, Colorado-based DigitalGlobe show. The Energy Department said last week that supplies, including floating and fixed tanks, totaled 33.1 million barrels as of Aug. 26.
The Institute for Supply Management’s non-manufacturing index fell to 51 last month, the lowest since January 2010, from 52.7 in July, according to the median of 59 forecasts in a Bloomberg News survey before a release today. Citigroup Inc. cut its 2011 global economic growth forecast yesterday to 3.1 percent from 3.7 percent.
Japan’s Nikkei 225 benchmark stock index fell 1.2 percent in Tokyo trading and Australia’s S&P/ASX 200 slid 1.5 percent in Sydney today as concern that Europe’s debt crisis is worsening sapped demand for riskier assets.
Gold Rises Above $1,900 an Ounce as Growth, Debt Concerns Enhance Demand
Gold, trading above $1,900 an ounce, may advance toward a record on speculation Europe’s debt crisis will worsen, damping economic growth and driving investors to protect their wealth.
Gold for immediate delivery was little changed at $1,902.05 an ounce as of 6:57 a.m. Singapore time. The metal touched $1,903.48 earlier, within 0.6 percent of the all-time high of $1,913.50 reached Aug. 23. Futures for December delivery in New York were at $1,905, up 1.5 percent from their close on Sept. 2. Floor trading in the U.S. was closed yesterday for the Labor Day holiday.
“Fear continues to dominate European markets with the debt crisis center of attention,” Lachlan Shaw, an analyst at Commonwealth Bank of Australia, wrote in an e-mail. “The gold price rose to near record highs as investors embraced safe-haven assets.”
Gold is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify away from equities and some currencies. The metal is up 34 percent this year, outperforming global stocks, commodities and Treasuries. It climbed to a record priced in euros today.
European equities dropped yesterday after an election loss for German Chancellor Angela Merkel’s party spurred concern that support may fade for bailouts of Europe’s indebted nations. U.S. stock futures fell today, indicating the Standard & Poor’s 500 Index may slide for a third day. The MSCI All-Country World Index fell 2 percent yesterday, dropping for a third day, after data last week showed the U.S. jobs market stalled in August, renewing speculation the world’s largest economy may be faltering.
Silver for immediate delivery rose 0.2 percent to $43.0075 an ounce. Cash platinum was little changed at $1,887.75 an ounce, trading below gold for a second day. Palladium was little changed at $764.75 an ounce.
Gold for immediate delivery was little changed at $1,902.05 an ounce as of 6:57 a.m. Singapore time. The metal touched $1,903.48 earlier, within 0.6 percent of the all-time high of $1,913.50 reached Aug. 23. Futures for December delivery in New York were at $1,905, up 1.5 percent from their close on Sept. 2. Floor trading in the U.S. was closed yesterday for the Labor Day holiday.
“Fear continues to dominate European markets with the debt crisis center of attention,” Lachlan Shaw, an analyst at Commonwealth Bank of Australia, wrote in an e-mail. “The gold price rose to near record highs as investors embraced safe-haven assets.”
Gold is in the 11th year of a bull market, the longest winning streak since at least 1920 in London, as investors seek to diversify away from equities and some currencies. The metal is up 34 percent this year, outperforming global stocks, commodities and Treasuries. It climbed to a record priced in euros today.
European equities dropped yesterday after an election loss for German Chancellor Angela Merkel’s party spurred concern that support may fade for bailouts of Europe’s indebted nations. U.S. stock futures fell today, indicating the Standard & Poor’s 500 Index may slide for a third day. The MSCI All-Country World Index fell 2 percent yesterday, dropping for a third day, after data last week showed the U.S. jobs market stalled in August, renewing speculation the world’s largest economy may be faltering.
Silver for immediate delivery rose 0.2 percent to $43.0075 an ounce. Cash platinum was little changed at $1,887.75 an ounce, trading below gold for a second day. Palladium was little changed at $764.75 an ounce.
Thursday 2 June 2011
Gold May Advance as Economic Slowdown, Greece’s Debt Turmoil Spur Demand
Gold may advance for a second day to near one-month high, as data pointing to economic slowdown and prolonged debt turmoil in Greece spurred demand for the metal as a store of value.
Immediate-delivery gold rose as much as 0.3 percent to $1,544.38 an ounce before trading at $1,540.10 at 9:24 a.m. in Singapore. The metal reached $1,550.20 an ounce yesterday, the highest level since May 3. Cash silver strengthened 0.5 percent to $37.04 an ounce.
Manufacturing growth from China to the euro region and the U.S. slowed in May, adding to signs momentum is weakening in the global economy. The Institute for Supply Management’s factory index fell more than projected to 53.5 last month, the lowest level since September 2009, U.S. data showed yesterday.
“Investors bought the safe-haven asset” after signs of economic slowdown in the U.S., Mark Pervan, head of commodity research with ANZ Banking Group Ltd., wrote in a note today. Continued central bank purchases of bullion also provided “additional support and positive sentiment for gold.”
Bullion is extending its 10-year winning streak, as retail investors, pension funds and central bankers seek to protect wealth against Europe’s sovereign-debt crisis, weaker currencies and resurgent inflation.
Russia and Mexico added gold in April now valued at almost $1 billion to their reserves. Russia bought 13.72 metric tons in the month, raising holdings to 824.83 tons, according to data on the International Monetary Fund’s website. Mexico’s assets rose 5.93 tons to 106.14 tons, the data showed this week.
Risk of Default
Greece’s risk of default was raised to 50 percent by Moody’s Investors Service as European officials rushed to put together the second bailout plan in two years to stave off renewed financial turmoil in the region.
Moody’s downgraded Greece to Caa1 from B1, putting it on a par with Cuba, according to a report published late yesterday. The move came after policy makers considered asking investors to reinvest in new Greek debt when existing bonds mature.
An ounce of gold bought 41.5687 ounces of silver today after the ratio jumped 4.8 percent yesterday, the most since May 16. The gold-to-silver ratio fell to as low as 31.7135 on April 28 and rebounded to as high as 44.3310 on May 16.
Spot palladium was little changed at $770.25 an ounce, while platinum was also little changed at $1,819.50 an ounce.
Immediate-delivery gold rose as much as 0.3 percent to $1,544.38 an ounce before trading at $1,540.10 at 9:24 a.m. in Singapore. The metal reached $1,550.20 an ounce yesterday, the highest level since May 3. Cash silver strengthened 0.5 percent to $37.04 an ounce.
Manufacturing growth from China to the euro region and the U.S. slowed in May, adding to signs momentum is weakening in the global economy. The Institute for Supply Management’s factory index fell more than projected to 53.5 last month, the lowest level since September 2009, U.S. data showed yesterday.
“Investors bought the safe-haven asset” after signs of economic slowdown in the U.S., Mark Pervan, head of commodity research with ANZ Banking Group Ltd., wrote in a note today. Continued central bank purchases of bullion also provided “additional support and positive sentiment for gold.”
Bullion is extending its 10-year winning streak, as retail investors, pension funds and central bankers seek to protect wealth against Europe’s sovereign-debt crisis, weaker currencies and resurgent inflation.
Russia and Mexico added gold in April now valued at almost $1 billion to their reserves. Russia bought 13.72 metric tons in the month, raising holdings to 824.83 tons, according to data on the International Monetary Fund’s website. Mexico’s assets rose 5.93 tons to 106.14 tons, the data showed this week.
Risk of Default
Greece’s risk of default was raised to 50 percent by Moody’s Investors Service as European officials rushed to put together the second bailout plan in two years to stave off renewed financial turmoil in the region.
Moody’s downgraded Greece to Caa1 from B1, putting it on a par with Cuba, according to a report published late yesterday. The move came after policy makers considered asking investors to reinvest in new Greek debt when existing bonds mature.
An ounce of gold bought 41.5687 ounces of silver today after the ratio jumped 4.8 percent yesterday, the most since May 16. The gold-to-silver ratio fell to as low as 31.7135 on April 28 and rebounded to as high as 44.3310 on May 16.
Spot palladium was little changed at $770.25 an ounce, while platinum was also little changed at $1,819.50 an ounce.
Thursday 19 May 2011
Gold May Gain for Second Straight Day on Slowdown, European Debt Concerns
Gold may advance for a second day as further signs of a global economic slowdown and protracted sovereign-debt concerns in Europe spurred demand for precious metals as a store of value.
Immediate-delivery gold traded little changed at $1,497 per ounce at 12:42 p.m. in Singapore after gaining as much as 0.3 percent to $1,500.82. Gold for June delivery in New York was also little changed at $1,497 an ounce, while silver futures jumped as much as 1.8 percent to $35.71 an ounce, extending yesterday’s 4.8 percent advance.
Japan’s economy shrank more than estimated in the first quarter after the March 11 earthquake and tsunami, sending the nation into its third recession in a decade, data showed today. Malaysia’s growth unexpectedly eased last quarter as services and manufacturing moderated, according to data yesterday. The dollar fell for a fourth day, losing 0.3 percent against a basket of six major currencies. Gold typically moves counter to the dollar.
“A weaker dollar is proving the main driver shoring up demand for gold,” said Park Jong Beom, a Seoul-based trader at Tongyang Futures Co. “Lingering concerns over Europe’s debt issues and signs of economic slowdown are also supporting precious metals as a haven asset.”
European Central Bank officials ruled out a Greek debt restructuring, clashing with political leaders over a solution to the crisis. EU finance ministers for the first time this week floated the idea of extending Greece’s debt-repayment schedule as the nation struggles to meet the terms of last year’s 110 billion-euro ($157 billion) rescue.
Decade-Long Rally
Gold strengthened 5.4 percent this year after a 30 percent rally in 2010, keeping it on course for an 11th straight annual advance as investors seek protection against the prospect of currency debasement and accelerating inflation.
Gold and silver may decline next year as governments and central banks raise interest rates and end stimulus measures, Natixis Commodity Markets Ltd. said in an e-mailed report. Gold will average $1,140 an ounce in 2012, while silver will average $19.80, according to yesterday’s report.
Immediate-delivery platinum gained as much as 1.3 percent to $1,792 an ounce and last traded at $1,784, while palladium advanced as much as 0.7 percent to $740.25 an ounce before trading at $736.25.
Immediate-delivery gold traded little changed at $1,497 per ounce at 12:42 p.m. in Singapore after gaining as much as 0.3 percent to $1,500.82. Gold for June delivery in New York was also little changed at $1,497 an ounce, while silver futures jumped as much as 1.8 percent to $35.71 an ounce, extending yesterday’s 4.8 percent advance.
Japan’s economy shrank more than estimated in the first quarter after the March 11 earthquake and tsunami, sending the nation into its third recession in a decade, data showed today. Malaysia’s growth unexpectedly eased last quarter as services and manufacturing moderated, according to data yesterday. The dollar fell for a fourth day, losing 0.3 percent against a basket of six major currencies. Gold typically moves counter to the dollar.
“A weaker dollar is proving the main driver shoring up demand for gold,” said Park Jong Beom, a Seoul-based trader at Tongyang Futures Co. “Lingering concerns over Europe’s debt issues and signs of economic slowdown are also supporting precious metals as a haven asset.”
European Central Bank officials ruled out a Greek debt restructuring, clashing with political leaders over a solution to the crisis. EU finance ministers for the first time this week floated the idea of extending Greece’s debt-repayment schedule as the nation struggles to meet the terms of last year’s 110 billion-euro ($157 billion) rescue.
Decade-Long Rally
Gold strengthened 5.4 percent this year after a 30 percent rally in 2010, keeping it on course for an 11th straight annual advance as investors seek protection against the prospect of currency debasement and accelerating inflation.
Gold and silver may decline next year as governments and central banks raise interest rates and end stimulus measures, Natixis Commodity Markets Ltd. said in an e-mailed report. Gold will average $1,140 an ounce in 2012, while silver will average $19.80, according to yesterday’s report.
Immediate-delivery platinum gained as much as 1.3 percent to $1,792 an ounce and last traded at $1,784, while palladium advanced as much as 0.7 percent to $740.25 an ounce before trading at $736.25.
Malaysia to Plan Global Islamic Dollar Bond
Malaysia is said to be planning a 10- year dollar-denominated Islamic bond, its second sovereign sale of Shariah-compliant debt in a year, four people familiar with the matter said.
The deadline for the request for proposals from bankers has closed and the government has yet to take a final decision, said one of the people, a government official who couldn’t be named as the matter is confidential. Three local investment banks submitted pitches proposing a size of $500 million, which can potentially be raised to $1.7 billion, three of the people said.
An offering of 10-year overseas Islamic debt would set a benchmark for the $1 trillion industry, where issuers tend to favor shorter maturities such as five years or less. The government may be willing to pay a higher yield on the notes than non-Shariah-compliant bonds because it wants to strengthen Malaysia’s position as the global hub for Islamic finance and the biggest market for sukuk, the people said.
“Malaysia’s sovereign bonds have always been sought after because they are rare,” Lum Choon Kuan, head of fixed-income research at CIMB Investment Bank Bhd., a unit of Malaysia’s second-biggest bank, said in a telephone interview in Kuala Lumpur today. Proceeds are likely to be used to part-refinance a $1.75 billion non-Islamic, dollar-denominated bond that matures in July, he said.
Ringgit Sales Surge
The Southeast Asian nation sold $1.25 billion of the five- year dollar-denominated Islamic bonds in May last year at a 180 basis-point premium over U.S. Treasuries. The yield difference has since shrunk to 97 basis points today, approaching a March 31 low of 88 basis points, according to data compiled by Bloomberg.
The yield on the 3.928 percent sukuk maturing in June 2015 was little changed today at 2.45 percent, prices from Royal Bank of Scotland Group show. It reached 2.33 percent on Nov. 4, the lowest since the debt was sold.
Sales of ringgit-denominated Islamic bonds rose 72 percent this year to 12.4 billion ringgit ($4.1 billion) from the same period in 2010, Bloomberg data show. The government has announced a $444 billion 10-year development plan that includes a mass railway in Kuala Lumpur. Malaysia may also sell local- currency sukuk to help finance the construction of the 48 billion ringgit network, Prime Minister Najib Razak said on March 29.
Global sales of sukuk, which pay asset returns to comply with Islam’s ban on interest, climbed to $5.9 billion this year, from $5.4 billion in the same period of 2010, according to data compiled by Bloomberg.
The deadline for the request for proposals from bankers has closed and the government has yet to take a final decision, said one of the people, a government official who couldn’t be named as the matter is confidential. Three local investment banks submitted pitches proposing a size of $500 million, which can potentially be raised to $1.7 billion, three of the people said.
An offering of 10-year overseas Islamic debt would set a benchmark for the $1 trillion industry, where issuers tend to favor shorter maturities such as five years or less. The government may be willing to pay a higher yield on the notes than non-Shariah-compliant bonds because it wants to strengthen Malaysia’s position as the global hub for Islamic finance and the biggest market for sukuk, the people said.
“Malaysia’s sovereign bonds have always been sought after because they are rare,” Lum Choon Kuan, head of fixed-income research at CIMB Investment Bank Bhd., a unit of Malaysia’s second-biggest bank, said in a telephone interview in Kuala Lumpur today. Proceeds are likely to be used to part-refinance a $1.75 billion non-Islamic, dollar-denominated bond that matures in July, he said.
Ringgit Sales Surge
The Southeast Asian nation sold $1.25 billion of the five- year dollar-denominated Islamic bonds in May last year at a 180 basis-point premium over U.S. Treasuries. The yield difference has since shrunk to 97 basis points today, approaching a March 31 low of 88 basis points, according to data compiled by Bloomberg.
The yield on the 3.928 percent sukuk maturing in June 2015 was little changed today at 2.45 percent, prices from Royal Bank of Scotland Group show. It reached 2.33 percent on Nov. 4, the lowest since the debt was sold.
Sales of ringgit-denominated Islamic bonds rose 72 percent this year to 12.4 billion ringgit ($4.1 billion) from the same period in 2010, Bloomberg data show. The government has announced a $444 billion 10-year development plan that includes a mass railway in Kuala Lumpur. Malaysia may also sell local- currency sukuk to help finance the construction of the 48 billion ringgit network, Prime Minister Najib Razak said on March 29.
Global sales of sukuk, which pay asset returns to comply with Islam’s ban on interest, climbed to $5.9 billion this year, from $5.4 billion in the same period of 2010, according to data compiled by Bloomberg.
Wednesday 11 May 2011
Goldman Sees Commodity Recovery as Slump Erases $99 Billion
The commodities rout that knocked off $99 billion of market value last week is driving out speculators and leading Goldman Sachs Group Inc., which forecast the plunge, to predict a possible recovery.
The combination of slower growth in U.S. service industries and fewer German manufacturing orders helped drive the Standard & Poor’s GSCI Index of 24 commodities down 11 percent in five days, the most since December 2008, and erased all the gains since mid-March. Wheat, zinc and gold rebounded at the end of the week as U.S. payrolls exceeded economists’ forecasts, reducing concern that demand will weaken.
“Given the magnitude of the pullback, it does create an opportunity for more upside potential, particularly in the second half of this year, when fundamentals are expected to tighten,” Jeffrey Currie, the London-based head of commodity research at Goldman, said in a May 6 interview. A month ago, Currie told investors they should be “underweight” in commodities. “In the very near-term, we’d be a little cautious,” he says now.
The value of all 24 commodities tracked by the S&P GSCI index was about $805 billion on May 6, compared with $891 billion on April 29, according to data compiled by Bloomberg on the number of outstanding contracts and prices of futures closest to delivery. Combined holdings of exchange-traded products backed by precious metals fell to $119 billion from $132 billion, the data show.
Investment Funds
Speculators retreated after investment funds had made near- record bets on price gains last month and the S&P GSCI reached the highest since August 2008. Commodities beat stocks, bonds and the dollar for five consecutive months through the end of April, the longest in at least 14 years, on forecasts for demand exceeding output in everything from oil to copper to corn.
The most influential analysts and fund managers are divided on where prices are headed. The last time the S&P GSCI fell this much, the index rebounded 12 percent the following week, and by the end of last month, it had more than doubled.
Bulls say the expanding global economy, led by growth in China, India and Brazil, is boosting demand at a time when producers from BHP Billiton Ltd., the largest mining company, to BP Plc, Europe’s second-biggest oil producer, can’t keep up.
Selling would be “premature,” and the rally will resume, said Hussein Allidina, the head of commodity research at Morgan Stanley in New York, reiterating comments made before the rout. “The decline we are seeing is not being driven by any meaningful change in fundamentals,” he said.
‘Not Turning Point’
“This is not a turning point,” said Kevin Norrish, a London-based managing director at Barclays Capital, whose commodities research team is ranked by Bloomberg in the top three for copper and gold. “We’d expect to see a pretty good recovery from these levels before too long.”
The S&P GSCI climbed 3.6 percent today, as silver futures jumped 5.2 percent and crude oil in New York added 5.5 percent.
Brent crude should rebound about 3 percent to $115 a barrel in coming weeks because violence in northern Africa and the Middle East continues, Christin Tuxen, an analyst at Danske Bank A/S in Copenhagen and the most-accurate oil forecaster tracked by Bloomberg over eight quarters, said on May 6. The fighting already curbed supply from Libya and increased concern that it may spread to regional producers including Saudi Arabia.
JPMorgan Chase & Co. raised its oil-price forecasts for this year and next on May 6 because it expects production to fall short of demand. Brent crude will average $120 in 2011 and 2012, from previous estimates of $110 and $114, the bank said. Oil prices should match or top their recent highs by next year, Goldman said in a note to clients on the same day.
Global Recession
The bears say that even if the economy grows, speculation is so excessive that prices no longer reflect supply and demand. The S&P GSCI Index is 39 percent higher than a year ago and more than twice where it was in February 2009, when economies were recovering from the global recession.
Commodities are at the start of a bear market that may last as long as five to 10 years, said Michael Aronstein, the president of Marketfield Asset Management in New York who correctly predicted the 2008 slump that drove the benchmark index down 66 percent in seven months.
The scale of investment means “supply and demand is almost meaningless,” Aronstein said in an interview May 6. “It’s almost like the last days of the tech bubble.”
Oil, which lost 15 percent last week in New York and 13 percent in London, became “detached from fundamentals,” said Oswald Clint, London-based head oil analyst at Sanford C. Bernstein, the joint-most-accurate oil forecaster tracked by Bloomberg in 2010. Brent could drop below $100 a barrel, he said. That’s about 14 percent lower than now.
Commodity Funds
About $9.61 billion went into commodity funds in the first quarter, more than triple the $2.77 billion a year earlier, EPFR Global, a Cambridge, Massachusetts-based research firm, said in a report in April. Energy funds attracted $10.9 billion, compared with a year-earlier outflow of $367 million.
A rebound in the dollar also dimmed the appeal for commodities that are priced in the U.S. currency. The Dollar Index, a measure against six counterparts, rose 2.6 percent last week, the most since August. The index has a negative correlation of 0.89 to the S&P GSCI Index. A figure of 1 would mean they move in lockstep. The currency gauge may drop to the lowest since July 2008 by the end of the year, estimates compiled by Bloomberg show.
Five-Day Slump
“This is probably the beginning of a bear phase, even if it’s temporary, where the dollar and bonds will be more popular than commodities,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “It’s fitting hand in glove with the U.S. slowdown story.”
The S&P GSCI’s five-day slump, the longest since August, began on May 2 and accelerated on May 5 by plunging 6.5 percent, the most since January 2009.
Silver led the rout after CME Group Inc., the owner of the Comex exchange, increased the cost of making new speculative positions by 84 percent in two weeks. Prices that advanced as much as 61 percent to $49.845 an ounce this year tumbled 27 percent last week to $35.287 on May 6. The metal may drop as low as $30 toward the end of the year before rebounding as gold rallies, said Dan Smith, the London-based analyst at Standard Chartered Plc, which predicted a decline in prices last month.
Gold, Soros
Gold also fell, declining 4.2 percent to $1,491.60 an ounce last week, after the Wall Street Journal reported May 4 that Soros Fund Management LLC, the hedge fund chaired by billionaire investor George Soros, sold some of its precious-metal holdings.
Bullion will advance to a record $1,650 by year-end, partly fueled by central banks buying to diversify their reserves, said Andrew Kaleel, chief executive officer of Sydney-based H3 Global Advisors Pty Ltd., which has a commodity hedge fund managing about A$600 million ($642 million).
Mexico, Russia and Thailand bought about a combined $6 billion of bullion in February and March, International Monetary Fund data show. Since the end of 2009, countries including India, Sri Lanka, Mauritius and Bangladesh have bought metal. Central banks are expanding their gold reserves for the first time in a generation as bullion rises for an 11th consecutive year, the longest winning streak since at least 1920.
The killing of al-Qaeda leader Osama bin Laden may have been the catalyst for this week’s slide in oil, the biggest exchange-traded commodity by value. Crude had surged as much as 25 percent this year as violence swept through northern Africa and the Middle East, disrupting 1.3 million barrels a day from Libya and raising concerns of shortages from the Persian Gulf. Since bin Laden’s death was announced, traders shifted their focus to prospects of weaker demand.
Service Industries
Service industries in the U.S. expanded in April at the slowest pace in eight months, the Institute for Supply Management said May 4. Applications for jobless benefits jumped the most since August in the week ended April 30, the Labor Department said May 5. That was tempered by a report from the department a day later showing payrolls increased last month by the most since May 2010.
Factory orders in Germany, Europe’s largest economy, unexpectedly dropped 4 percent in March, the Economy Ministry said May 5. The country’s industrial production rose for a third time the same month, the ministry said the next day.
Central bankers also helped drive commodities lower last week by indicating their intention to cool growth to combat inflation. Rates rose in more than two-dozen countries this year, according to data compiled by Bloomberg.
‘Extremely Alert’
European Central Bank President Jean-Claude Trichet said May 6 that policy makers are “extremely alert” on inflation after they raised interest rates on April 7, joining China, India, Poland and Sweden in seeking to control consumer prices with tighter monetary policy. Trichet said he may take further decisions on rates after new economic projections in June.
While every commodity tracked by the S&P GSCI fell last week, some rebounded May 6. Wheat futures rose 2 percent on the Kansas City Board of Trade as drought and flooding threatened crops in North America, Europe and Asia. Cocoa, cattle, zinc, gold, copper, nickel and soybeans also gained.
Lower prices also may spur more demand. Barclays, which told investors in a report May 6 to use the slump to buy, is forecasting shortfalls in production this year for copper, nickel, tin, lead, platinum and palladium. Rabobank expects demand to exceed output in corn and cotton, according to a report last month.
‘Strong’ Demand
“Ultimately, supply remains weak, and demand remains strong, and that’s why they will eventually go higher,” said John Stephenson, who helps manage $2.6 billion at First Asset Investment Management Inc. in Toronto. “Commodities, in the worst case, will start firming by late August, but in the meantime, I would see this as a buying opportunity.”
Oil demand will exceed supply this year, the U.S. Energy Department said in a report April 12. Billionaire hedge-fund manager T. Boone Pickens said May 3 that prices will rise.
“If you look at the fourth-quarter projection for oil, that’s 90 million barrels a day globally, and I don’t think the world can produce more than 88 million,” Pickens said in an interview from Los Angeles with Willow Bay and Lisa Murphy on Bloomberg Television’s “Fast Forward.”
For now, funds are probably still trimming bets on higher commodity prices. Net-long positions held by managed-money funds fell 2.4 percent to 1.45 million futures and options in the week ended May 3, Commodity Futures Trading Commission data show. They reached a record 1.56 million contracts in October.
Open interest in 17 of 19 commodities tracked by the Thomson Reuters/Jefferies CRB Index dropped 0.6 percent to 8.15 million contracts, data from the CFTC show. That compares with an all-time high of 8.6 million on Feb. 18.
“I don’t think the commodities boom is over,” said Robbert Van Batenburg, an analyst at Louis Capital Markets in New York, who correctly predicted a 2007 rebound in oil. “We may see a pause in the rally, and that’s OK. Past the summer doldrums, I think the rally picks up where we left off.”
The combination of slower growth in U.S. service industries and fewer German manufacturing orders helped drive the Standard & Poor’s GSCI Index of 24 commodities down 11 percent in five days, the most since December 2008, and erased all the gains since mid-March. Wheat, zinc and gold rebounded at the end of the week as U.S. payrolls exceeded economists’ forecasts, reducing concern that demand will weaken.
“Given the magnitude of the pullback, it does create an opportunity for more upside potential, particularly in the second half of this year, when fundamentals are expected to tighten,” Jeffrey Currie, the London-based head of commodity research at Goldman, said in a May 6 interview. A month ago, Currie told investors they should be “underweight” in commodities. “In the very near-term, we’d be a little cautious,” he says now.
The value of all 24 commodities tracked by the S&P GSCI index was about $805 billion on May 6, compared with $891 billion on April 29, according to data compiled by Bloomberg on the number of outstanding contracts and prices of futures closest to delivery. Combined holdings of exchange-traded products backed by precious metals fell to $119 billion from $132 billion, the data show.
Investment Funds
Speculators retreated after investment funds had made near- record bets on price gains last month and the S&P GSCI reached the highest since August 2008. Commodities beat stocks, bonds and the dollar for five consecutive months through the end of April, the longest in at least 14 years, on forecasts for demand exceeding output in everything from oil to copper to corn.
The most influential analysts and fund managers are divided on where prices are headed. The last time the S&P GSCI fell this much, the index rebounded 12 percent the following week, and by the end of last month, it had more than doubled.
Bulls say the expanding global economy, led by growth in China, India and Brazil, is boosting demand at a time when producers from BHP Billiton Ltd., the largest mining company, to BP Plc, Europe’s second-biggest oil producer, can’t keep up.
Selling would be “premature,” and the rally will resume, said Hussein Allidina, the head of commodity research at Morgan Stanley in New York, reiterating comments made before the rout. “The decline we are seeing is not being driven by any meaningful change in fundamentals,” he said.
‘Not Turning Point’
“This is not a turning point,” said Kevin Norrish, a London-based managing director at Barclays Capital, whose commodities research team is ranked by Bloomberg in the top three for copper and gold. “We’d expect to see a pretty good recovery from these levels before too long.”
The S&P GSCI climbed 3.6 percent today, as silver futures jumped 5.2 percent and crude oil in New York added 5.5 percent.
Brent crude should rebound about 3 percent to $115 a barrel in coming weeks because violence in northern Africa and the Middle East continues, Christin Tuxen, an analyst at Danske Bank A/S in Copenhagen and the most-accurate oil forecaster tracked by Bloomberg over eight quarters, said on May 6. The fighting already curbed supply from Libya and increased concern that it may spread to regional producers including Saudi Arabia.
JPMorgan Chase & Co. raised its oil-price forecasts for this year and next on May 6 because it expects production to fall short of demand. Brent crude will average $120 in 2011 and 2012, from previous estimates of $110 and $114, the bank said. Oil prices should match or top their recent highs by next year, Goldman said in a note to clients on the same day.
Global Recession
The bears say that even if the economy grows, speculation is so excessive that prices no longer reflect supply and demand. The S&P GSCI Index is 39 percent higher than a year ago and more than twice where it was in February 2009, when economies were recovering from the global recession.
Commodities are at the start of a bear market that may last as long as five to 10 years, said Michael Aronstein, the president of Marketfield Asset Management in New York who correctly predicted the 2008 slump that drove the benchmark index down 66 percent in seven months.
The scale of investment means “supply and demand is almost meaningless,” Aronstein said in an interview May 6. “It’s almost like the last days of the tech bubble.”
Oil, which lost 15 percent last week in New York and 13 percent in London, became “detached from fundamentals,” said Oswald Clint, London-based head oil analyst at Sanford C. Bernstein, the joint-most-accurate oil forecaster tracked by Bloomberg in 2010. Brent could drop below $100 a barrel, he said. That’s about 14 percent lower than now.
Commodity Funds
About $9.61 billion went into commodity funds in the first quarter, more than triple the $2.77 billion a year earlier, EPFR Global, a Cambridge, Massachusetts-based research firm, said in a report in April. Energy funds attracted $10.9 billion, compared with a year-earlier outflow of $367 million.
A rebound in the dollar also dimmed the appeal for commodities that are priced in the U.S. currency. The Dollar Index, a measure against six counterparts, rose 2.6 percent last week, the most since August. The index has a negative correlation of 0.89 to the S&P GSCI Index. A figure of 1 would mean they move in lockstep. The currency gauge may drop to the lowest since July 2008 by the end of the year, estimates compiled by Bloomberg show.
Five-Day Slump
“This is probably the beginning of a bear phase, even if it’s temporary, where the dollar and bonds will be more popular than commodities,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “It’s fitting hand in glove with the U.S. slowdown story.”
The S&P GSCI’s five-day slump, the longest since August, began on May 2 and accelerated on May 5 by plunging 6.5 percent, the most since January 2009.
Silver led the rout after CME Group Inc., the owner of the Comex exchange, increased the cost of making new speculative positions by 84 percent in two weeks. Prices that advanced as much as 61 percent to $49.845 an ounce this year tumbled 27 percent last week to $35.287 on May 6. The metal may drop as low as $30 toward the end of the year before rebounding as gold rallies, said Dan Smith, the London-based analyst at Standard Chartered Plc, which predicted a decline in prices last month.
Gold, Soros
Gold also fell, declining 4.2 percent to $1,491.60 an ounce last week, after the Wall Street Journal reported May 4 that Soros Fund Management LLC, the hedge fund chaired by billionaire investor George Soros, sold some of its precious-metal holdings.
Bullion will advance to a record $1,650 by year-end, partly fueled by central banks buying to diversify their reserves, said Andrew Kaleel, chief executive officer of Sydney-based H3 Global Advisors Pty Ltd., which has a commodity hedge fund managing about A$600 million ($642 million).
Mexico, Russia and Thailand bought about a combined $6 billion of bullion in February and March, International Monetary Fund data show. Since the end of 2009, countries including India, Sri Lanka, Mauritius and Bangladesh have bought metal. Central banks are expanding their gold reserves for the first time in a generation as bullion rises for an 11th consecutive year, the longest winning streak since at least 1920.
The killing of al-Qaeda leader Osama bin Laden may have been the catalyst for this week’s slide in oil, the biggest exchange-traded commodity by value. Crude had surged as much as 25 percent this year as violence swept through northern Africa and the Middle East, disrupting 1.3 million barrels a day from Libya and raising concerns of shortages from the Persian Gulf. Since bin Laden’s death was announced, traders shifted their focus to prospects of weaker demand.
Service Industries
Service industries in the U.S. expanded in April at the slowest pace in eight months, the Institute for Supply Management said May 4. Applications for jobless benefits jumped the most since August in the week ended April 30, the Labor Department said May 5. That was tempered by a report from the department a day later showing payrolls increased last month by the most since May 2010.
Factory orders in Germany, Europe’s largest economy, unexpectedly dropped 4 percent in March, the Economy Ministry said May 5. The country’s industrial production rose for a third time the same month, the ministry said the next day.
Central bankers also helped drive commodities lower last week by indicating their intention to cool growth to combat inflation. Rates rose in more than two-dozen countries this year, according to data compiled by Bloomberg.
‘Extremely Alert’
European Central Bank President Jean-Claude Trichet said May 6 that policy makers are “extremely alert” on inflation after they raised interest rates on April 7, joining China, India, Poland and Sweden in seeking to control consumer prices with tighter monetary policy. Trichet said he may take further decisions on rates after new economic projections in June.
While every commodity tracked by the S&P GSCI fell last week, some rebounded May 6. Wheat futures rose 2 percent on the Kansas City Board of Trade as drought and flooding threatened crops in North America, Europe and Asia. Cocoa, cattle, zinc, gold, copper, nickel and soybeans also gained.
Lower prices also may spur more demand. Barclays, which told investors in a report May 6 to use the slump to buy, is forecasting shortfalls in production this year for copper, nickel, tin, lead, platinum and palladium. Rabobank expects demand to exceed output in corn and cotton, according to a report last month.
‘Strong’ Demand
“Ultimately, supply remains weak, and demand remains strong, and that’s why they will eventually go higher,” said John Stephenson, who helps manage $2.6 billion at First Asset Investment Management Inc. in Toronto. “Commodities, in the worst case, will start firming by late August, but in the meantime, I would see this as a buying opportunity.”
Oil demand will exceed supply this year, the U.S. Energy Department said in a report April 12. Billionaire hedge-fund manager T. Boone Pickens said May 3 that prices will rise.
“If you look at the fourth-quarter projection for oil, that’s 90 million barrels a day globally, and I don’t think the world can produce more than 88 million,” Pickens said in an interview from Los Angeles with Willow Bay and Lisa Murphy on Bloomberg Television’s “Fast Forward.”
For now, funds are probably still trimming bets on higher commodity prices. Net-long positions held by managed-money funds fell 2.4 percent to 1.45 million futures and options in the week ended May 3, Commodity Futures Trading Commission data show. They reached a record 1.56 million contracts in October.
Open interest in 17 of 19 commodities tracked by the Thomson Reuters/Jefferies CRB Index dropped 0.6 percent to 8.15 million contracts, data from the CFTC show. That compares with an all-time high of 8.6 million on Feb. 18.
“I don’t think the commodities boom is over,” said Robbert Van Batenburg, an analyst at Louis Capital Markets in New York, who correctly predicted a 2007 rebound in oil. “We may see a pause in the rally, and that’s OK. Past the summer doldrums, I think the rally picks up where we left off.”
China’s Commodity Deals Dropping
China, the world’s biggest user of natural resources, is pulling back from commodities and energy acquisitions as the rest of the world pursues deals at the fastest pace since the financial crisis.
China’s companies have spent $14.2 billion on acquisitions this year, down 30 percent from the same period last year, according to data compiled by Bloomberg. Worldwide the value of takeovers in the industry is $176 billion, the most at this time of the year since 2007. U.S. companies from Alpha Natural Resources Inc. (ANR) to DuPont Co. are the largest buyers.
After China snapped up assets from a stake in Repsol YPF SA (REP)’s Brazilian unit to Ugandan fields from Tullow Oil Plc (TLW), political unrest in countries such as Egypt and Libya helped push up commodity prices this year. The rebound led Glencore International AG to offer shares this month in the year’s biggest initial public offering, which may value the commodity trader at about $61 billion.
“Faced with strict regulatory control over Chinese acquisitions in the U.S. and other countries, Chinese companies have been shifting targets,” said Guan Anping, a professor at the People’s University of China in Beijing and a former Chinese trade official. “The turmoil in North Africa and Middle East highlighted the risks of resources investment in the region. Chief executives of state-owned enterprises became very cautious.”
Lubrizol, Danisco
U.S. buyers lead acquisitions this year, with the biggest deal coming from Warren Buffett’s Berkshire Hathaway Inc. (BRK/A)’s $9.2 billion takeover of lubricant maker Lubrizol Corp. (LZ) Mine owner Massey Energy Co. (MEE) agreed in January to an $8.3 billion buyout from Alpha Natural Resources Inc. DuPont last month raised its bid for Danish food-ingredients maker Danisco A/S to $6.4 billion.
Morgan Stanley (MS) has advised on 16 deals valued at $55 billion so far this year, the most among investment banks. Goldman Sachs Inc. comes second at $46 billion, and Credit Suisse has advised on $35 billion in transactions.
China lost the contest for Equinox Resources Ltd. last month, with Toronto-based Barrick Gold Corp. (ABX)’s C$7.3 billion ($7.6 billion) bid trumping Minmetals Resources Ltd. (1208)’s C$6.3 billion offer.
Most Expensive
The takeover was the most expensive copper mining acquisition, according to data compiled by Bloomberg. The battle came as China’s currency fell 2.8 percent against the Canadian dollar over the past six months. It reached a two-year low of 6.8681 yuan to the so-called loonie on April 29, and traded at 6.7889 as of 11:05 a.m. in Hong Kong today. Against the euro, the yuan has dropped 3.2 percent in the past six months.
“China is still pursuing acquisitions, but they are not the only game in town anymore,” said Richard Horrocks-Taylor, head of mining investment banking at RBC Capital Markets in London. “Chinese acquirers have become more sophisticated and more thorough in their assessment before they make an offer.”
In mining, China had already retreated last year, making acquisitions worth $4.5 billion compared with $10 billion in 2009, according to Ernst & Young LLP.
Valuations on mining and energy companies have gone up after crude oil jumped 43 percent in the past year to more than $110 a barrel in London and copper advanced 24 percent. The Standard & Poor’s GSCI Total Return Index of 24 commodities has beaten bonds, stocks and the dollar every month since December, the longest run in at least 14 years.
Baar, Switzerland-based Glencore’s IPO will set benchmarks for assets as it raises funds in London and Hong Kong, said Christine Tiscareno, an equity analyst at Standard & Poor’s.
Commodities Prices
“Prices are at the peak,” Tiscareno said. “China is very shrewd to take a back seat until they see what happens with Glencore. Even though they can afford to pay up and they need the resources, prices are likely to come down.”
Commodities tumbled last week on concern the global economy may slow. The S&P commodities index slid more than 10 percent, and crude oil declined more than 12 percent. Copper fell to the lowest price in almost five months last week on concern that higher interest rates will lead to slower growth and inflation.
China faces political opposition to some deals. Australia blocked a $2.8 billion bid by state-owned China Minmetals Corp. for OZ Minerals Ltd. (OZL) in March 2009 on national security concerns. Australia also helped stymie Aluminum Corp. of China’s planned $19.5 billion investment in Rio Tinto Group.
Political Barriers
“Political barriers raised by Western countries have frustrated Chinese in overseas takeovers,” said Heng Kun, an analyst with Essence Securities Co. in Beijing. “But that’s unlikely to deter their expansion plans in the long run. China will continue to seek iron ore, oil, copper, uranium and minor metals that are in domestic short supplies.”
China will build 10 cities larger than New York by 2025 and will need to import more steel, iron ore, coal, aluminum and copper, Rio Tinto’s Chief Economist Vivek Tulpule said last year. The nation will almost triple its annual use of copper to 20 million tons in 25 years, according to CRU, a London-based metals and mining consulting company, prompting companies to seek control of mines oversees.
“China has a longer-term strategic imperative to secure sources of future supply for commodities,” said Ric Ronge, who helps manage the equivalent of $1.3 billion at Pengana Global Resources Fund in Melbourne. “They will keep buying.”
China’s companies have spent $14.2 billion on acquisitions this year, down 30 percent from the same period last year, according to data compiled by Bloomberg. Worldwide the value of takeovers in the industry is $176 billion, the most at this time of the year since 2007. U.S. companies from Alpha Natural Resources Inc. (ANR) to DuPont Co. are the largest buyers.
After China snapped up assets from a stake in Repsol YPF SA (REP)’s Brazilian unit to Ugandan fields from Tullow Oil Plc (TLW), political unrest in countries such as Egypt and Libya helped push up commodity prices this year. The rebound led Glencore International AG to offer shares this month in the year’s biggest initial public offering, which may value the commodity trader at about $61 billion.
“Faced with strict regulatory control over Chinese acquisitions in the U.S. and other countries, Chinese companies have been shifting targets,” said Guan Anping, a professor at the People’s University of China in Beijing and a former Chinese trade official. “The turmoil in North Africa and Middle East highlighted the risks of resources investment in the region. Chief executives of state-owned enterprises became very cautious.”
Lubrizol, Danisco
U.S. buyers lead acquisitions this year, with the biggest deal coming from Warren Buffett’s Berkshire Hathaway Inc. (BRK/A)’s $9.2 billion takeover of lubricant maker Lubrizol Corp. (LZ) Mine owner Massey Energy Co. (MEE) agreed in January to an $8.3 billion buyout from Alpha Natural Resources Inc. DuPont last month raised its bid for Danish food-ingredients maker Danisco A/S to $6.4 billion.
Morgan Stanley (MS) has advised on 16 deals valued at $55 billion so far this year, the most among investment banks. Goldman Sachs Inc. comes second at $46 billion, and Credit Suisse has advised on $35 billion in transactions.
China lost the contest for Equinox Resources Ltd. last month, with Toronto-based Barrick Gold Corp. (ABX)’s C$7.3 billion ($7.6 billion) bid trumping Minmetals Resources Ltd. (1208)’s C$6.3 billion offer.
Most Expensive
The takeover was the most expensive copper mining acquisition, according to data compiled by Bloomberg. The battle came as China’s currency fell 2.8 percent against the Canadian dollar over the past six months. It reached a two-year low of 6.8681 yuan to the so-called loonie on April 29, and traded at 6.7889 as of 11:05 a.m. in Hong Kong today. Against the euro, the yuan has dropped 3.2 percent in the past six months.
“China is still pursuing acquisitions, but they are not the only game in town anymore,” said Richard Horrocks-Taylor, head of mining investment banking at RBC Capital Markets in London. “Chinese acquirers have become more sophisticated and more thorough in their assessment before they make an offer.”
In mining, China had already retreated last year, making acquisitions worth $4.5 billion compared with $10 billion in 2009, according to Ernst & Young LLP.
Valuations on mining and energy companies have gone up after crude oil jumped 43 percent in the past year to more than $110 a barrel in London and copper advanced 24 percent. The Standard & Poor’s GSCI Total Return Index of 24 commodities has beaten bonds, stocks and the dollar every month since December, the longest run in at least 14 years.
Baar, Switzerland-based Glencore’s IPO will set benchmarks for assets as it raises funds in London and Hong Kong, said Christine Tiscareno, an equity analyst at Standard & Poor’s.
Commodities Prices
“Prices are at the peak,” Tiscareno said. “China is very shrewd to take a back seat until they see what happens with Glencore. Even though they can afford to pay up and they need the resources, prices are likely to come down.”
Commodities tumbled last week on concern the global economy may slow. The S&P commodities index slid more than 10 percent, and crude oil declined more than 12 percent. Copper fell to the lowest price in almost five months last week on concern that higher interest rates will lead to slower growth and inflation.
China faces political opposition to some deals. Australia blocked a $2.8 billion bid by state-owned China Minmetals Corp. for OZ Minerals Ltd. (OZL) in March 2009 on national security concerns. Australia also helped stymie Aluminum Corp. of China’s planned $19.5 billion investment in Rio Tinto Group.
Political Barriers
“Political barriers raised by Western countries have frustrated Chinese in overseas takeovers,” said Heng Kun, an analyst with Essence Securities Co. in Beijing. “But that’s unlikely to deter their expansion plans in the long run. China will continue to seek iron ore, oil, copper, uranium and minor metals that are in domestic short supplies.”
China will build 10 cities larger than New York by 2025 and will need to import more steel, iron ore, coal, aluminum and copper, Rio Tinto’s Chief Economist Vivek Tulpule said last year. The nation will almost triple its annual use of copper to 20 million tons in 25 years, according to CRU, a London-based metals and mining consulting company, prompting companies to seek control of mines oversees.
“China has a longer-term strategic imperative to secure sources of future supply for commodities,” said Ric Ronge, who helps manage the equivalent of $1.3 billion at Pengana Global Resources Fund in Melbourne. “They will keep buying.”
Gold, Silver Extend Advance on China’s Inflation, European Debt Concerns
Gold and silver extended their advance as faster-than-forecast inflation in China and a resurgence of Europe’s sovereign-debt crisis increased demand for precious metals as a store of value.
Immediate-delivery gold gained as much as 0.5 percent to $1,523.82 per ounce, climbing for a fourth day after last week’s 4.4 percent slump, and traded at $1,522.95 at 11:05 a.m. in Singapore. Silver futures, which shed 27 percent last week, increased as much as 1.9 percent to $39.20 an ounce.
China’s consumer prices rose 5.3 percent in April from a year earlier, data showed today, exceeding the government’s full-year target for a fourth month. The gain was more than the 5.2 percent median forecast in a Bloomberg survey of 30 economists and compared with a 5.4 percent increase in March.
“Higher-than-expected inflation readings out of China might even result in some medium-term support for precious metals,” Marc Ground, an analyst at Standard Bank Plc, wrote in a note before the figure was released at 10 a.m. in Beijing.
The government aims for full-year inflation of 4 percent as Premier Wen Jiabao eyes the risk that rising prices for basic goods and housing will fan social discontent. Inflation is “the most pressing problem” facing China, Vice Premier Wang Qishan said at talks in Washington this week.
“Signs of continued pressures might see the market’s preoccupation with rising global inflation resurface, and consequently see some inflation-hedge demand,” wrote Ground.
Weaker Dollar
Gold, which reached a record $1,577.57 an ounce on May 2, may climb to $2,000 by January, according to Deutsche Bank AG. Investors including George Soros invested in gold as the metal surged over the past year on Europe’s sovereign-debt crisis, a weakening dollar and quickening inflation.
Standard & Poor’s this week downgraded Greece’s credit rating for the fourth time since April 2010, signaling that the region’s debt crisis is escalating. Demand for precious metals also grew as the dollar declined 0.4 percent this week against six major currencies, halting a 2.6 percent advance last week.
“With the resurfacing of euro-zone sovereign-debt concerns, we expect to see continued appetite for gold and silver,” Ground wrote. “Given the recent selloff, expect to see a return of investor as well as physical buying in search of value.”
UBS AG said its so-called physical gold sales yesterday were the second-highest this year, with above-average demand from India, the largest gold consumer. India’s inflation index rose 8.98 percent in March from a year ago, data showed on April 15, exceeding the central bank’s 8 percent estimate.
“Without necessarily expecting this very high pace of buying to continue, we nonetheless would look for Indian demand to continue at above-average levels, given how willing these buyers have lately been at prices in excess of $1,500,” UBS analyst Edel Tully wrote in an e-mailed report yesterday.
Immediate-delivery palladium increased 0.7 percent to $735.25 an ounce, while platinum gained 0.2 percent to $1,801.25. Spot silver gained as much as 1.8 percent to $39.2075 per ounce, and traded at $39.1475
Immediate-delivery gold gained as much as 0.5 percent to $1,523.82 per ounce, climbing for a fourth day after last week’s 4.4 percent slump, and traded at $1,522.95 at 11:05 a.m. in Singapore. Silver futures, which shed 27 percent last week, increased as much as 1.9 percent to $39.20 an ounce.
China’s consumer prices rose 5.3 percent in April from a year earlier, data showed today, exceeding the government’s full-year target for a fourth month. The gain was more than the 5.2 percent median forecast in a Bloomberg survey of 30 economists and compared with a 5.4 percent increase in March.
“Higher-than-expected inflation readings out of China might even result in some medium-term support for precious metals,” Marc Ground, an analyst at Standard Bank Plc, wrote in a note before the figure was released at 10 a.m. in Beijing.
The government aims for full-year inflation of 4 percent as Premier Wen Jiabao eyes the risk that rising prices for basic goods and housing will fan social discontent. Inflation is “the most pressing problem” facing China, Vice Premier Wang Qishan said at talks in Washington this week.
“Signs of continued pressures might see the market’s preoccupation with rising global inflation resurface, and consequently see some inflation-hedge demand,” wrote Ground.
Weaker Dollar
Gold, which reached a record $1,577.57 an ounce on May 2, may climb to $2,000 by January, according to Deutsche Bank AG. Investors including George Soros invested in gold as the metal surged over the past year on Europe’s sovereign-debt crisis, a weakening dollar and quickening inflation.
Standard & Poor’s this week downgraded Greece’s credit rating for the fourth time since April 2010, signaling that the region’s debt crisis is escalating. Demand for precious metals also grew as the dollar declined 0.4 percent this week against six major currencies, halting a 2.6 percent advance last week.
“With the resurfacing of euro-zone sovereign-debt concerns, we expect to see continued appetite for gold and silver,” Ground wrote. “Given the recent selloff, expect to see a return of investor as well as physical buying in search of value.”
UBS AG said its so-called physical gold sales yesterday were the second-highest this year, with above-average demand from India, the largest gold consumer. India’s inflation index rose 8.98 percent in March from a year ago, data showed on April 15, exceeding the central bank’s 8 percent estimate.
“Without necessarily expecting this very high pace of buying to continue, we nonetheless would look for Indian demand to continue at above-average levels, given how willing these buyers have lately been at prices in excess of $1,500,” UBS analyst Edel Tully wrote in an e-mailed report yesterday.
Immediate-delivery palladium increased 0.7 percent to $735.25 an ounce, while platinum gained 0.2 percent to $1,801.25. Spot silver gained as much as 1.8 percent to $39.2075 per ounce, and traded at $39.1475
Monday 9 May 2011
Silver Futures Rally From Worst Weekly Loss Since 1975 as Investors Return
Silver futures rebounded from the worst weekly slump since at least 1975 on speculation investors will return to commodity markets as concerns over the global recovery eased and the dollar weakened. Gold also gained.
Silver for July delivery jumped as much as 2.9 percent to $36.31 an ounce after plunging 27 percent last week, while cash silver added as much as 1.9 percent to $36.3175. Immediate- delivery gold rose 0.4 percent to $1,501.65 an ounce at 2:07 p.m. in Singapore. The metal rallied 1.4 percent on May 6, paring last week’s loss to 4.4 percent.
The Standard & Poor’s GSCI Index of 24 commodities declined 11 percent last week, the most since December 2008, led by the tumble in silver futures. The dollar fell as much as 0.5 percent against six major currencies today.
“Gold and silver may regain strength as traders perceive last week’s commodities washout to be excessive and it isn’t viewed as a trend reversal,” said Park Jong Beom, Seoul-based trader with Tongyang Futures Co. “There’s no change in the outlook for a weaker dollar as well.”
The value of all 24 commodities tracked by the S&P GSCI index was about $805 billion on May 6, compared with $891 billion on April 29, according to data compiled by Bloomberg on the number of outstanding contracts and prices of futures closest to delivery. Combined holdings of exchange-traded products backed by precious metals fell to $119 billion from $132 billion, the data show.
American Jobs
American employers added more jobs than forecast in April and previous monthly gains this year were revised up, easing concern the economy is cooling. Payrolls expanded by 244,000 last month, the biggest gain since May 2010, after a revised 221,000 increase the prior month, the Labor Department said on May 6 in Washington.
“We see no reason to panic about recent price declines,” Monty Guild, chief executive officer at Guild Investment Management Inc., wrote in a note last week. “Nothing has changed, except for the fact that some highly-leveraged speculators have been forced to sell. After the panic has ended, buying opportunities at low prices will abound.”
Net-long positions of commodities held by managed-money funds fell 2.4 percent to 1.45 million futures and options in the week ended May 3, Commodity Futures Trading Commission data show. They reached a record 1.56 million contracts in October.
Immediate delivery palladium strengthened 0.3 percent to $723 an ounce, while platinum added 0.5 percent to $1,794.50 an ounce.
Silver for July delivery jumped as much as 2.9 percent to $36.31 an ounce after plunging 27 percent last week, while cash silver added as much as 1.9 percent to $36.3175. Immediate- delivery gold rose 0.4 percent to $1,501.65 an ounce at 2:07 p.m. in Singapore. The metal rallied 1.4 percent on May 6, paring last week’s loss to 4.4 percent.
The Standard & Poor’s GSCI Index of 24 commodities declined 11 percent last week, the most since December 2008, led by the tumble in silver futures. The dollar fell as much as 0.5 percent against six major currencies today.
“Gold and silver may regain strength as traders perceive last week’s commodities washout to be excessive and it isn’t viewed as a trend reversal,” said Park Jong Beom, Seoul-based trader with Tongyang Futures Co. “There’s no change in the outlook for a weaker dollar as well.”
The value of all 24 commodities tracked by the S&P GSCI index was about $805 billion on May 6, compared with $891 billion on April 29, according to data compiled by Bloomberg on the number of outstanding contracts and prices of futures closest to delivery. Combined holdings of exchange-traded products backed by precious metals fell to $119 billion from $132 billion, the data show.
American Jobs
American employers added more jobs than forecast in April and previous monthly gains this year were revised up, easing concern the economy is cooling. Payrolls expanded by 244,000 last month, the biggest gain since May 2010, after a revised 221,000 increase the prior month, the Labor Department said on May 6 in Washington.
“We see no reason to panic about recent price declines,” Monty Guild, chief executive officer at Guild Investment Management Inc., wrote in a note last week. “Nothing has changed, except for the fact that some highly-leveraged speculators have been forced to sell. After the panic has ended, buying opportunities at low prices will abound.”
Net-long positions of commodities held by managed-money funds fell 2.4 percent to 1.45 million futures and options in the week ended May 3, Commodity Futures Trading Commission data show. They reached a record 1.56 million contracts in October.
Immediate delivery palladium strengthened 0.3 percent to $723 an ounce, while platinum added 0.5 percent to $1,794.50 an ounce.
Thursday 5 May 2011
Central Banks Expand Gold Reserves With $6 Billion in Purchases
Mexico, Russia and Thailand added gold now valued at about $6 billion to their reserves in February and March as prices advanced to a record, the dollar weakened and Treasuries lost investors money.
Mexico bought 93.3 metric tons since January, increasing holdings from about 6.9 tons, according to data from the International Monetary Fund, and the nation’s central bank later said it purchased 100 tons in recent months. Russia increased reserves 18.8 tons to 811.1 tons in March and Thailand expanded assets 9.3 tons to 108.9 tons in the same month, the data show.
Central banks are expanding their gold reserves for the first time in a generation as purchases by billionaire investors including John Paulson contributed to bullion extending its longest winning streak since at least 1920. Countries were also boosting their holdings in 1980 when gold rose to a then-record $850 an ounce, only to fall for most of the next 20 years.
“Central banks have good reason to buy gold,” said Peter Morici, a professor of business at the University of Maryland in College Park and a former economic adviser to the U.S. government. “The dollar is no longer a safe asset for backing currencies. Treasuries are not a sound investment” and budget and debt issues mean central banks should buy gold, he said.
Gold for immediate delivery climbed to a record $1,577.57 an ounce on May 2, and traded little changed at $1,516.75 at 9:03 a.m. in Singapore. The price is up 6.8 percent this year and has gained the past 10 years. Global holdings of gold by governments and official institutions such as the IMF stood at 30,523 tons by April, according to the World Gold Council.
‘Regular Policy’
Mexico’s purchase of 100 tons formed part of the central bank’s ordinary investment activities, and the gold represents about 4 percent of the nation’s international reserves, Banco de Mexico said in an e-mailed statement late yesterday.
“These purchases are part of the regular policy of this institution in regards to investment and diversification,” the statement said. Mexico’s international reserves have risen 11 percent this year to $125.8 billion, central bank data show.
The dollar yesterday slid to the lowest level since July 2008 against six major currencies. Treasuries lost investors 0.14 percent in February and March, according to Bank of America Merrill Lynch indexes.
Bullion dropped 1.3 percent yesterday after the Wall Street Journal reported that Soros Fund Management LLC sold some of its precious-metal holdings because of a reduced risk of deflation, citing unidentified people close to the matter. The Soros fund held shares in the SPDR Gold Trust and the iShares Gold Trust equal to about 508,800 ounces as of Dec. 31, a U.S. Securities and Exchange Commission filing on Feb. 14 showed.
‘Asset Bubble’
George Soros described gold in January last year as “the ultimate asset bubble.” In a Nov. 15 speech the 80-year-old investor said that conditions for the metal to keep rising were “pretty ideal” and in January this year he said the boom in commodities may last “a couple of years” longer. Michael Vachon, a spokesman for Soros, declined to comment yesterday.
Since the end of 2009, countries including India, Sri Lanka, Mauritius and Bangladesh have bought gold. Before this year’s purchases, gold accounted for about 0.2 percent of Mexico’s total reserves, and 2.6 percent of Thailand’s reserves. The metal accounts for more than 70 percent of reserves of the U.S. and Germany, the biggest holders, World Gold Council data show.
“Mexico’s gold accumulation confirms the demand of emerging-market central banks to diversify,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “They will be the big buyers for years to come.”
A call and text message seeking comment from Thailand’s central bank spokeswoman Sirithida Panomwan Na Ayudhya was not returned after business hours.
Kazakhstan reduced its bullion holdings by 1.55 tons to 67.3 tons in March, the IMF data show.
Mexico bought 93.3 metric tons since January, increasing holdings from about 6.9 tons, according to data from the International Monetary Fund, and the nation’s central bank later said it purchased 100 tons in recent months. Russia increased reserves 18.8 tons to 811.1 tons in March and Thailand expanded assets 9.3 tons to 108.9 tons in the same month, the data show.
Central banks are expanding their gold reserves for the first time in a generation as purchases by billionaire investors including John Paulson contributed to bullion extending its longest winning streak since at least 1920. Countries were also boosting their holdings in 1980 when gold rose to a then-record $850 an ounce, only to fall for most of the next 20 years.
“Central banks have good reason to buy gold,” said Peter Morici, a professor of business at the University of Maryland in College Park and a former economic adviser to the U.S. government. “The dollar is no longer a safe asset for backing currencies. Treasuries are not a sound investment” and budget and debt issues mean central banks should buy gold, he said.
Gold for immediate delivery climbed to a record $1,577.57 an ounce on May 2, and traded little changed at $1,516.75 at 9:03 a.m. in Singapore. The price is up 6.8 percent this year and has gained the past 10 years. Global holdings of gold by governments and official institutions such as the IMF stood at 30,523 tons by April, according to the World Gold Council.
‘Regular Policy’
Mexico’s purchase of 100 tons formed part of the central bank’s ordinary investment activities, and the gold represents about 4 percent of the nation’s international reserves, Banco de Mexico said in an e-mailed statement late yesterday.
“These purchases are part of the regular policy of this institution in regards to investment and diversification,” the statement said. Mexico’s international reserves have risen 11 percent this year to $125.8 billion, central bank data show.
The dollar yesterday slid to the lowest level since July 2008 against six major currencies. Treasuries lost investors 0.14 percent in February and March, according to Bank of America Merrill Lynch indexes.
Bullion dropped 1.3 percent yesterday after the Wall Street Journal reported that Soros Fund Management LLC sold some of its precious-metal holdings because of a reduced risk of deflation, citing unidentified people close to the matter. The Soros fund held shares in the SPDR Gold Trust and the iShares Gold Trust equal to about 508,800 ounces as of Dec. 31, a U.S. Securities and Exchange Commission filing on Feb. 14 showed.
‘Asset Bubble’
George Soros described gold in January last year as “the ultimate asset bubble.” In a Nov. 15 speech the 80-year-old investor said that conditions for the metal to keep rising were “pretty ideal” and in January this year he said the boom in commodities may last “a couple of years” longer. Michael Vachon, a spokesman for Soros, declined to comment yesterday.
Since the end of 2009, countries including India, Sri Lanka, Mauritius and Bangladesh have bought gold. Before this year’s purchases, gold accounted for about 0.2 percent of Mexico’s total reserves, and 2.6 percent of Thailand’s reserves. The metal accounts for more than 70 percent of reserves of the U.S. and Germany, the biggest holders, World Gold Council data show.
“Mexico’s gold accumulation confirms the demand of emerging-market central banks to diversify,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “They will be the big buyers for years to come.”
A call and text message seeking comment from Thailand’s central bank spokeswoman Sirithida Panomwan Na Ayudhya was not returned after business hours.
Kazakhstan reduced its bullion holdings by 1.55 tons to 67.3 tons in March, the IMF data show.
Tuesday 3 May 2011
Buying more GOLD/SILVER without using your cash??
How can we do that?
From my explanation in the ADVANTAGE of GOLD, after your 1st time purchased of GOLD.. you actually still have that gold as an asset. You still can assume that gold is your money to spend.
How can we buy another gold or silver without using our cash money from our saving account?
I will teach you how to utilize your 1st purchased of GOLD.
Lets put a situation that you have your 1st purchased of gold, 20gm x 3pcs.
1) Use back the AR- Rahnu scheme, where you can have some money from your gold.
2) Keep your 20gm x 3pcs gold with Agro Bank. Estimated per gold will get about RM2050.(subject to change base on current gold market value)
So RM 2050 x 3 = RM 6150.00
3) With that RM 6150.00, you can purchase another 20gm gold x 1 and 250gm Silver x 1 with balance of cash in hand about few hundreds. (all cost subject to change base on current market value of gold and silver)
4) Every month you just need to pay to the Agro Bank about RM46.00 for the deposit charges.This will continue up to 6 months.
Means that, RM46 x 6 month = RM276.00
5) On the 6th months, u need to withdraw your 20gm x 3 gold from the bank.
Accumulative cost for withdrawal is about RM 6150 (initial borrowing cost) + RM 276 (deposit charges for 6months), total RM6426.00
(For the total cost above, you can pay it gradually/installment for 6 months or accumulate until on the 6th month to pay all)
The most important thing is, by the time you get back your 3 pcs gold from the bank.. your newly purchased of GOLD and SILVER definitely has increased its value more than the charges that u paid to the bank (RM276).
So, end of the day you got 4pcs of 20gm GOLD + 250gm SILVER as your asset. Total cost for 4pcs 20gm Gold and 250gm Silver is actually equal to 3pcs of 20gm Gold (initially) + RM276.00 only..Well done!!
**Note: This is just rough sample calculation. For actual figure, please consult me.
From my explanation in the ADVANTAGE of GOLD, after your 1st time purchased of GOLD.. you actually still have that gold as an asset. You still can assume that gold is your money to spend.
How can we buy another gold or silver without using our cash money from our saving account?
I will teach you how to utilize your 1st purchased of GOLD.
Lets put a situation that you have your 1st purchased of gold, 20gm x 3pcs.
1) Use back the AR- Rahnu scheme, where you can have some money from your gold.
2) Keep your 20gm x 3pcs gold with Agro Bank. Estimated per gold will get about RM2050.(subject to change base on current gold market value)
So RM 2050 x 3 = RM 6150.00
3) With that RM 6150.00, you can purchase another 20gm gold x 1 and 250gm Silver x 1 with balance of cash in hand about few hundreds. (all cost subject to change base on current market value of gold and silver)
4) Every month you just need to pay to the Agro Bank about RM46.00 for the deposit charges.This will continue up to 6 months.
Means that, RM46 x 6 month = RM276.00
5) On the 6th months, u need to withdraw your 20gm x 3 gold from the bank.
Accumulative cost for withdrawal is about RM 6150 (initial borrowing cost) + RM 276 (deposit charges for 6months), total RM6426.00
(For the total cost above, you can pay it gradually/installment for 6 months or accumulate until on the 6th month to pay all)
The most important thing is, by the time you get back your 3 pcs gold from the bank.. your newly purchased of GOLD and SILVER definitely has increased its value more than the charges that u paid to the bank (RM276).
So, end of the day you got 4pcs of 20gm GOLD + 250gm SILVER as your asset. Total cost for 4pcs 20gm Gold and 250gm Silver is actually equal to 3pcs of 20gm Gold (initially) + RM276.00 only..Well done!!
**Note: This is just rough sample calculation. For actual figure, please consult me.
Friday 29 April 2011
Graph pattern to identify for maximize profit and minimize lost - Part 2
Ascending Triangle Pattern
Confirm your ascending triangle pattern by drawing a horizontal line tracing the upper price barrier and a diagonal line tracing the series of ascending troughs.
The descending triangle is the bearish counterpart to the ascending triangle.
Descending Triangle Pattern
Confirm your descending triangle by drawing a horizontal line tracing the lower price barrier and a diagonal line tracing the series of descending troughs.
The ascending and descending patterns indicate a stock is increasing or decreasing in demand. The stock meets a level of support or resistance (the horizontal trendline) several times before breaking out and continuing in the direction of the developing up or down pattern.
How to Profit from Ascending and Descending Triangles
Ascending and descending triangles are short-term investor favorites, because the trends allow short-term traders to earn from the same sharp price increase that long-term investors have been waiting for. Rather than holding on to a stock for months or years before you finally see a big payday, you can buy and hold for only a period of days and reap in the same monster returns as the long-time stock owners.
As with many of our favorite patterns, when you learn to identify ascending and descending triangles, you can profit from upwards or downwards breakouts. That way, you’ll earn a healthy profit regardless of where the market is going.
Watch For:
• An ascending or descending pattern forming over three to four weeks.
Set Your Target Price:
For ascending and descending triangles, sell your stock at a target price of:
• Entry price plus the pattern’s height for an upward breakout.
• Entry price minus the pattern’s height for a downward breakout.
**Note: All info was taken from Chart Advisor..here is just for reference.
Graph pattern to identify for maximize profit and minimize lost - Part 1
The symmetrical triangle pattern is formed when investors are unsure of a stock’s value. Once the pattern is broken, investors jump on the bandwagon, shooting the stock price north or south.
Symmetrical Triangle Pattern
To form your symmetrical triangle pattern, draw two converging trendlines that bound the high and low prices. Your trendlines should form (you guessed it) a symmetrical triangle, lying on its side.
How to Profit from Symmetrical Triangles
Symmetrical triangles are very reliable. You can profit from upwards or downwards breakouts. You’ll learn more about how to earn from downtrends when we talk about maximizing profits.
If you see a symmetrical triangle forming, watch it closely. The sooner you catch the breakout, the more money you stand to make.
Watch For:
• Sideways movement, a period of rest, before the breakout.
• Price of the asset traveling between two converging trendlines.
• Breakout ¾ of the way to the apex.
Set Your Target Price:
As with all patterns, knowing when to get out is as important as knowing when to get in. Your target price is the safest time to sell, even if it looks like the trend may be continuing.
For symmetrical triangles, sell your stock at a target price of:
• Entry price plus the pattern’s height for an upward breakout.
• Entry price minus the pattern’s height for a downward breakout.
**Note: All info was taken from Chart Advisor... here is just for reference.
Symmetrical Triangle Pattern
To form your symmetrical triangle pattern, draw two converging trendlines that bound the high and low prices. Your trendlines should form (you guessed it) a symmetrical triangle, lying on its side.
How to Profit from Symmetrical Triangles
Symmetrical triangles are very reliable. You can profit from upwards or downwards breakouts. You’ll learn more about how to earn from downtrends when we talk about maximizing profits.
If you see a symmetrical triangle forming, watch it closely. The sooner you catch the breakout, the more money you stand to make.
Watch For:
• Sideways movement, a period of rest, before the breakout.
• Price of the asset traveling between two converging trendlines.
• Breakout ¾ of the way to the apex.
Set Your Target Price:
As with all patterns, knowing when to get out is as important as knowing when to get in. Your target price is the safest time to sell, even if it looks like the trend may be continuing.
For symmetrical triangles, sell your stock at a target price of:
• Entry price plus the pattern’s height for an upward breakout.
• Entry price minus the pattern’s height for a downward breakout.
**Note: All info was taken from Chart Advisor... here is just for reference.
Gold Heads for Best Monthly Gain Since November 2009 on Inflation, Dollar
Gold is poised for its biggest monthly advance since November 2009 as a weakening dollar and accelerating inflation prompted investors to buy precious metals as a store of value.
Immediate-delivery gold was little changed at $1,534.72 an ounce at 10:25 a.m. in Singapore after touching a record $1,540.85 an ounce earlier. The metal surged 6.8 percent this month. Bullion for June delivery in New York rose 0.2 percent to $1,534.80 an ounce, nearing yesterday’s record of $1,538.80.
“The sinking dollar is driving people to the gold market as speculators betting on a further rally are adding more fuel to the fire,” said Lim Han Jo, a Seoul-based trader with Tongyang Futures Co. “I don’t exclude the possibility of gold hitting $1,800 this year.”
The dollar fell to the lowest since December 2009 against the euro yesterday after the Federal Reserve kept borrowing costs at a record low. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, have expanded 1.5 percent this month, heading for the biggest gain since August.
The U.S. economy slowed more than forecast in the first quarter as government spending declined by the most since 1983 and household purchases cooled. Fed Chairman Ben S. Bernanke said this week the bank would maintain record monetary stimulus after ending large-scale bond purchases in June to spur growth.
Eighteen of 21 traders, investors and analysts surveyed by Bloomberg, or 86 percent, said bullion will rise next week. Three predicted lower prices.
‘Influencing Gold’
Gold has gained 8 percent this year, extending a decade- long advance, the best run since at least 1920, as the prospect of currency debasement and accelerating inflation fuel investor demand. Fighting in Libya and sovereign-debt turmoil in Europe have also contributed to the rally this year.
“Going forward, the direction of the dollar is still one of the main factors influencing gold,” said Ong Yi Ling, Singapore-based analyst with Phillip Futures Pte Ltd. “Dollar weakness may continue as the Fed is likely to err on the side of caution rather than tighten too early.”
Cash silver jumped 29 percent this month, the most since 1987, climbing to a record $49.79 on April 25. Silver last traded at $48.4575. Palladium gained 0.6 percent to $781.25, a 2.3 percent gain this month, while platinum was little changed at $1,843.75, a 4.3 percent advance for April.
Immediate-delivery gold was little changed at $1,534.72 an ounce at 10:25 a.m. in Singapore after touching a record $1,540.85 an ounce earlier. The metal surged 6.8 percent this month. Bullion for June delivery in New York rose 0.2 percent to $1,534.80 an ounce, nearing yesterday’s record of $1,538.80.
“The sinking dollar is driving people to the gold market as speculators betting on a further rally are adding more fuel to the fire,” said Lim Han Jo, a Seoul-based trader with Tongyang Futures Co. “I don’t exclude the possibility of gold hitting $1,800 this year.”
The dollar fell to the lowest since December 2009 against the euro yesterday after the Federal Reserve kept borrowing costs at a record low. Assets in the SPDR Gold Trust, the biggest exchange-traded fund backed by gold, have expanded 1.5 percent this month, heading for the biggest gain since August.
The U.S. economy slowed more than forecast in the first quarter as government spending declined by the most since 1983 and household purchases cooled. Fed Chairman Ben S. Bernanke said this week the bank would maintain record monetary stimulus after ending large-scale bond purchases in June to spur growth.
Eighteen of 21 traders, investors and analysts surveyed by Bloomberg, or 86 percent, said bullion will rise next week. Three predicted lower prices.
‘Influencing Gold’
Gold has gained 8 percent this year, extending a decade- long advance, the best run since at least 1920, as the prospect of currency debasement and accelerating inflation fuel investor demand. Fighting in Libya and sovereign-debt turmoil in Europe have also contributed to the rally this year.
“Going forward, the direction of the dollar is still one of the main factors influencing gold,” said Ong Yi Ling, Singapore-based analyst with Phillip Futures Pte Ltd. “Dollar weakness may continue as the Fed is likely to err on the side of caution rather than tighten too early.”
Cash silver jumped 29 percent this month, the most since 1987, climbing to a record $49.79 on April 25. Silver last traded at $48.4575. Palladium gained 0.6 percent to $781.25, a 2.3 percent gain this month, while platinum was little changed at $1,843.75, a 4.3 percent advance for April.
Gold Luring Central-Bank Buyers May Extend Record Rally
Central banks that were net sellers of gold a decade ago are buying the precious metal to reduce their reliance on the dollar as a reserve currency, signaling demand that may extend a record rally in prices.
As developing countries accelerate purchases, gold may reach $2,000 an ounce this year, compared with a record of $1,538.80 yesterday in New York, said Robert McEwen, the chief executive officer of producer U.S. Gold Corp. Euro Pacific Capital’s Michael Pento, who correctly predicted gold’s highs for the past two years, forecast a 2011 high of $1,600.
Prices reached a record 14 times this month on demand from investors seeking an alternative to the dollar after the currency slumped to the lowest since 2009, U.S. debt widened, and the Federal Reserve signaled April 27 that borrowing costs will remain near zero percent for an extended period. The economy in China, the biggest foreign holder of U.S. Treasuries, grew 9.7 percent in the first quarter.
“China is out to have more gold than America, and Russia is aspiring to the same,” McEwen said yesterday in an interview in New York. “When you have debt, you don’t have a lot of flexibility. China wants to show its currency has more backing than the U.S.”
In 2010, central banks became net buyers for the first time in two decades, adding 87 metric tons in official-sector purchases by countries including Bolivia, Sri Lanka and Mauritius, according to World Gold Council data. China, with more than $3 trillion in foreign-currency reserves, plans to set up new funds to invest in precious metals, Century Weekly reported this week. Russia purchased 8 tons of gold in the first quarter.
China’s Gold Reserves
China, which has just 1.6 percent of its reserves in gold, may invest more than $1 trillion in bullion, Pento said. “China wants to be an international player, and they need to own more gold than they currently have.”
The U.S. Treasury Department projects the government could reach its debt ceiling of $14.3 trillion as soon as mid-May and run out of options for avoiding default by early July. The Fed has kept its benchmark rate between zero percent and 0.25 percent since December 2008 to help stimulate the economy, driving the dollar down 11 percent against a basket of six major currencies during the past year.
“Until monetary policy changes, you’re going to continue to see gold go up,” said Michael Cuggino, who helps manage $12 billion at Permanent Portfolio Funds in San Francisco.
“Ultimately the best thing we can do to create strong fundamentals for the dollar in the medium term is first, keep inflation low, which maintains the buying power of the dollar, and second, create a stronger economy,” Fed Chairman Ben S. Bernanke said on April 27.
U.S. Reserves
As of April, China was the sixth-largest official holder of gold, with 1,054.1 tons, according to World Gold Council estimates. The U.S. has the most, with 8,133.5 tons, or 74.8 percent of the nation’s currency reserves, council data show.
Central-bank buying may have the same impact on gold as the introduction of exchange-traded funds, Cuggino said. Prices have more than tripled since the SPDR Gold Trust, the biggest ETF backed by bullion, was introduced in November 2004.
Central banks in emerging markets may aim to hold 2 percent to 8 percent of their foreign-currency reserves in gold, Francisco Blanch, the head of commodities research at Bank of America Merrill Lynch in New York, said in an interview.
Gold is “close to” its cyclical high, said Blanch, who expects the metal to average $1,500 this year.
Gold’s Enemies
“The enemies of gold are rising interest rates and a balanced budget,” said Pento of Euro Pacific Capital in New York. “I look for a summer swoon once Bernanke exits the bond market. You’re going to have a temporary rise in real interest rates.”
The Fed said it would buy $600 billion in U.S. Treasuries through June.
The Federal Funds rate would have to rise to “Volcker” levels before gold enters a bear market, said Gold Corp.’s McEwen, who expects the metal to rise to $5,000 over three to four years.
Prices have advanced 7.7 percent this year, extending a decade of gains in which gold jumped sixfold from a low in 1999. The all-time inflation adjusted record is $2,338.92, based on the value on Jan. 21, 1980, according to a calculator on the Web site of the Federal Reserve Bank of Minneapolis.
Former Fed Chairman Paul Volcker ended gold’s rally to a then-record $873 by raising borrowing costs to 20 percent in March 1980.
Silver Rally No Bubble as Price Will Top Record, Coeur d’Alene Chief Says
The rally in silver to a 31-year high in New York shows no sign of ending because tight supply and robust demand will send the metal to a record, according to Coeur d’Alene Mines Corp. (CDE), the largest U.S. producer.
“We’re in a legitimate market driven by financial interest in silver and strong industrial demand,” Chief Executive Officer Dennis Wheeler said today at the Bloomberg Link Precious Metals Conference in New York. “Supplies are relatively inelastic.”
Silver has surged 162 percent in the past year, outpacing the 31 percent gain in gold. Investment demand for silver jumped 40 percent in 2010 as inflation rose, currencies lost value and Europe’s debt crisis escalated, said researcher GFMS Ltd. Industrial use gained 21 percent last year and may climb to a record this year, London-based GFMS said.
The rally is “very different” from the surge in the late 1970s, when the Hunt brothers tried to corner the market, and in 1980, when prices touched a record $50.35 an ounce, Frank McGhee, the head dealer at Integrated Brokerage Services, said at the conference.
“There is no manipulation going on in this market,” McGhee said. “It does not take a lot to stop the market until this market decides to go. I’d like to categorize silver as a freight train.”
Silver futures for July delivery rose $1.554, or 3.4 percent, to close at $47.541 on the Comex in New York. Silver reached $49.845 on April 25.
Older Mines
Discovering new deposits has become more difficult, while “older mines cease production at a time when demand continues to grow,” said Wheeler, whose company is based in Coeur d’Alene, Idaho. High prices are not “a short-term phenomenon,” and the metal may jump to $55 by the end of 2011, he said. Integrated Brokerage’s McGhee predicted $62.
Not everyone is bullish on silver. William Hamelin, the president of Ames Goldsmith Corp., forecast a drop to $35.85 by year-end. Some manufacturers are “leaning” toward using more substitutes, including copper and nickel, after prices surged, he said.
Coeur d’Alene, which is based in the Idaho city of the same name, fell 51 cents, or 1.6 percent, to settle at $31.70 in New York Stock Exchange composite trading. The shares have jumped 84 percent in the past year, compared with a 19 percent gain for the Russell 2000 Index. (RTY)
“We’re in a legitimate market driven by financial interest in silver and strong industrial demand,” Chief Executive Officer Dennis Wheeler said today at the Bloomberg Link Precious Metals Conference in New York. “Supplies are relatively inelastic.”
Silver has surged 162 percent in the past year, outpacing the 31 percent gain in gold. Investment demand for silver jumped 40 percent in 2010 as inflation rose, currencies lost value and Europe’s debt crisis escalated, said researcher GFMS Ltd. Industrial use gained 21 percent last year and may climb to a record this year, London-based GFMS said.
The rally is “very different” from the surge in the late 1970s, when the Hunt brothers tried to corner the market, and in 1980, when prices touched a record $50.35 an ounce, Frank McGhee, the head dealer at Integrated Brokerage Services, said at the conference.
“There is no manipulation going on in this market,” McGhee said. “It does not take a lot to stop the market until this market decides to go. I’d like to categorize silver as a freight train.”
Silver futures for July delivery rose $1.554, or 3.4 percent, to close at $47.541 on the Comex in New York. Silver reached $49.845 on April 25.
Older Mines
Discovering new deposits has become more difficult, while “older mines cease production at a time when demand continues to grow,” said Wheeler, whose company is based in Coeur d’Alene, Idaho. High prices are not “a short-term phenomenon,” and the metal may jump to $55 by the end of 2011, he said. Integrated Brokerage’s McGhee predicted $62.
Not everyone is bullish on silver. William Hamelin, the president of Ames Goldsmith Corp., forecast a drop to $35.85 by year-end. Some manufacturers are “leaning” toward using more substitutes, including copper and nickel, after prices surged, he said.
Coeur d’Alene, which is based in the Idaho city of the same name, fell 51 cents, or 1.6 percent, to settle at $31.70 in New York Stock Exchange composite trading. The shares have jumped 84 percent in the past year, compared with a 19 percent gain for the Russell 2000 Index. (RTY)
Monday 25 April 2011
Silver Surges to All-Time High on Inflation Hedge, Industry Use
Silver rallied to an all-time high as investors sought to protect their wealth against accelerating inflation and a weaker dollar with holdings in a metal that also benefits from economic growth.
Immediate-delivery silver climbed as much as 5.4 percent to $49.79 per ounce, surpassing the previous peak, which according to research company GFMS Ltd was $49.45 in January 1980. The metal traded at $49.2563 at 1:15 p.m. in Singapore, up for a ninth day and set for the longest winning run since an 11-day increase in March 2008. Spot gold also reached a record.
Precious metals have rallied on investor concern that central-bank programs to revive economic growth with record-low interest rates and increased supply of money will reignite inflation and hurt currencies including the dollar. Silver has more than doubled over the past year.
“It’s driven mainly by speculative buying, with investors eyeing the record for a while now,” Yang Shandan, a trader at Cinda Futures Co., said from Zhejiang, China. “We might get a bout of profit-taking now that we’ve pushed passed the high.”
July-delivery silver on the Comex in New York jumped as much as 8.2 percent to $49.845 per ounce, before trading at $48.730. The record was $50.35 an ounce, also set in January 1980, according to the exchange. Gold for immediate delivery climbed as much as 0.7 percent to $1,517.98 per ounce.
What is SPREAD??
When we talk about Gold and Silver investment, I believe that you've heard a lot of company are selling this precious metal. Some of them are selling even cheaper price than Public Gold.
What makes Public Gold different from others is the SPREAD.
What is SPREAD?
Spread is the price different between a selling and buying price. It is measured in certain percentage. Normally when you view the live price from Public Gold or others, you can see 2 different price which is SELLING and BUYING. I am very sure some of the people outside there always said that Public Gold price is higher than other company in fact the purity and quality of the gold is the same.. Why?
Let me explain to you the most important point here. I agreed, Public Gold price is a bit higher than some of other company. But when we invest or talk about a investment return, we should choose the most higher value and less deduction. Why I said that, SPREAD for Public Gold is actually only around 4.5% - 6% from the selling price. For example, if you bought a Gold Bar cost RM3000 last year.. and you are planning to sell it this year which is you already know the price has gain 30%, become RM3900... but when you want to sell to ABC company which is their spread is 12%-13%, so you only left about 17% profit from your Gold. But with Public Gold, the spread is about 6% and you still gain a balance profit of 24%.. even though when you bought its slightly expensive than others. Plus, Public gold will accept your gold even its already dented, scratched, or looks old..as long the certificate and the weight is still remain..
This is what I call a better investment choice and platform...
I am here not to condemned others company product or their strategy.. but to open our mind and let you to decide and choose which is better for your needs. You can try to study other company's product and spread. At the end of the day, its still up to you to choose...
Good Luck!!
What makes Public Gold different from others is the SPREAD.
What is SPREAD?
Spread is the price different between a selling and buying price. It is measured in certain percentage. Normally when you view the live price from Public Gold or others, you can see 2 different price which is SELLING and BUYING. I am very sure some of the people outside there always said that Public Gold price is higher than other company in fact the purity and quality of the gold is the same.. Why?
Let me explain to you the most important point here. I agreed, Public Gold price is a bit higher than some of other company. But when we invest or talk about a investment return, we should choose the most higher value and less deduction. Why I said that, SPREAD for Public Gold is actually only around 4.5% - 6% from the selling price. For example, if you bought a Gold Bar cost RM3000 last year.. and you are planning to sell it this year which is you already know the price has gain 30%, become RM3900... but when you want to sell to ABC company which is their spread is 12%-13%, so you only left about 17% profit from your Gold. But with Public Gold, the spread is about 6% and you still gain a balance profit of 24%.. even though when you bought its slightly expensive than others. Plus, Public gold will accept your gold even its already dented, scratched, or looks old..as long the certificate and the weight is still remain..
This is what I call a better investment choice and platform...
I am here not to condemned others company product or their strategy.. but to open our mind and let you to decide and choose which is better for your needs. You can try to study other company's product and spread. At the end of the day, its still up to you to choose...
Good Luck!!
Minera's McEwen on Gold Price From April 21
April 21 (Bloomberg) -- Robert McEwen, chief executive officer of Minera Andes Inc., talks about the outlook for gold prices. McEwen talks with Julie Hyman on Bloomberg Television's "Fast Forward." (Source: Bloomberg)
To watch the video, please click here.
To watch the video, please click here.
Sunday 24 April 2011
Gold Touches Record, Set for Third Weekly Gain; Silver Hits 31-Year High - news by Bloomberg
Gold advanced for a third week as a weaker dollar and debt concerns boosted the metal’s appeal as an alternative investment. Silver gained to the highest level in 31 years.
Gold for immediate delivery rose 1.4 percent this week and was little changed at $1,506.85 an ounce at 6:48 p.m. in Paris after climbing to an all-time high of $1,512.47 earlier today. June-delivery futures touched a record $1,509.60 yesterday on the Comex in New York, the 10th all-time high this month. The exchange is closed today for the Good Friday holiday.
“The weak dollar is having the most influence on gold at the moment,” said Chae Un Soo, a Seoul-based trader at Korea Exchange Bank Futures Co. “The market is getting more jittery now that we have sovereign-debt concerns about the U.S. in addition to Europe and the Middle East problems, which increasingly boosts safe-haven demand for gold.”
The dollar slid to the lowest level since August 2008 against a basket of six major currencies this week on speculation that the U.S. Federal Reserve will be slow to raise borrowing costs. The Dollar Index is little changed today and is set for a 0.9 percent weekly drop. The Fed has kept the benchmark rate between zero percent and 0.25 percent since December 2008 and pledged to purchase $600 billion in Treasuries through June to stimulate the economy.
Standard & Poor’s this week cut its debt outlook for the U.S. to negative from stable. Violence in the Middle East, sovereign-debt turmoil in Europe and Japan’s nuclear crisis have helped propel bullion 31 percent higher in the past year.
“Overall trade for gold and other precious metals was extremely thin due to the market holiday in the U.S. and U.K.,” said Hiroyuki Kikukawa, general manager of research at IDO Securities Co. in Tokyo.
Silver for immediate delivery climbed 2.1 percent to $47.25 an ounce, the highest price since 1980. The metal has climbed 11 percent this week, a fifth weekly advance and the biggest weekly gain since Feb. 18.
Spot palladium fell 0.1 percent to $767.50 an ounce, while cash platinum was 0.3 percent higher at $1,822.50 an ounce.
Thursday 21 April 2011
U.S. Finances Are ‘Unsustainable,’ Obama Says at Facebook Town Hall Event
President Barack Obama, on a cross- country trip to sell his deficit reduction plan, said yesterday that the nation’s finances are “unsustainable.”
At a campaign-style town hall meeting at the headquarters of Facebook Inc., Obama described the House Republicans’ budget plan as “fairly radical” and said members of both political parties in Washington need to work together to start reducing the federal deficit in a “balanced way.”
“We have an unsustainable situation,” he said. “We face a critical time where we are going to have to make some decisions -- how do we bring down the debt in the short term, and how do we bring down the debt over the long term?”
After his appearance at Facebook, Obama turned his attention to a private fundraising dinner in San Francisco hosted by Marc R. Benioff, chairman and chief executive of Salesforce.com, a cloud computing company. Tickets for the dinner, attended by about 60 people, were $35,800 a person.
Obama spoke after a performance by singer Stevie Wonder, telling a roomful of early supporters: “Some of you were involved in startups. Well, I was a startup.”
“We started something in 2008,” Obama said of his first campaign. “We haven’t finished it yet,” he said, reeling off needs to overhaul education, improve clean energy programs and reduce debt and deficits. “I’m going to need you to help me finish it.”
More Fundraising
From there, the president attended a “Gen44” Obama fundraising event at the Nob Hill Masonic Center, where ticket prices ranged between $25 and $2,500, according to a Democratic official who wasn’t authorized to discuss such details publicly.
Obama is to appear at a fundraiser at the St. Regis Hotel in San Francisco today before leaving for Nevada, a politically important state in 2012 with an open Senate seat. The president is scheduled to hold a “town hall” meeting in Reno at ElectraTherm Inc., a small renewable energy company, giving him a chance to reinforce his push for increased spending on clean- energy technology.
Later in the day, he is to return to California for fundraisers in Los Angeles, including events at Sony Pictures where actor-singer Jamie Foxx is scheduled to appear.
The fundraising events in San Francisco and Los Angeles are expected to bring in between $4 million and $5 million, the Democratic official said.
Bill Carrick, a Democratic strategist based in Los Angeles, described the trip as “not a full-fledged campaign trip, but it has some of the dynamics of preparing to run a campaign,” such as efforts to “start focusing on swing states early so you can broaden the electoral map.”
Reach Out
Facebook, with more than 500 million users, is the world’s largest social network website. It was founded in 2004 by Mark Zuckerberg.
Obama has used social media sites such as Google Inc. (GOOG)’s YouTube to reach out to voters. Yesterday’s session is the first time he has appeared on Facebook, which passed Google last year to become the most visited website in the U.S.
Zuckerberg, joined by Chief Operating Officer Sheryl Sandberg, moderated the event. Obama took questions filed online through the White House’s Facebook page and website, along with those from an audience of Facebook employees, small-business leaders and Silicon Valley entrepreneurs.
Obama said using Facebook allows us to “make sure this isn’t just a one-way conversation.”
“This format and this company, I think, is an ideal means for us to be able to carry on this conversation,” the president said. “We’re having a very serious debate right now about the future direction of our country.”
Separate Plans
The White House and House Republicans have offered separate plans to reduce cumulative budget deficits by $4 trillion, over 12 years and 10 years respectively. Obama’s plan would include $1 trillion in tax increases that his advisers say could be raised from families earning at least $250,000, while the Republicans’ measure wouldn’t raise taxes.
“The Republican budget that was put forward I would say is fairly radical. I wouldn’t call it particularly courageous,” he said. “I would call it short-sighted.”
Obama criticized the Republican plan for preserving tax breaks while chopping funds from programs such as clean energy and for seeking to overhaul Medicare and Medicaid health insurance programs for the elderly and the poor.
“Nothing is easier than solving a problem on the backs of people who are poor or people who are powerless,” he said.
Obama said he remains committed to pushing for an overhaul of the nation’s immigration laws. He said members of both parties must cooperate to get it done.
Housing Market
The president said the economy is still “not growing quite as fast as we would like” even after creating almost 2 million jobs in the past 18 months. He called the housing market “probably the biggest drag” on the economy.
“What I’m really concerned about is making sure that the housing market overall recovers enough that it’s not such a huge drag on the economy because, if it isn’t, then people will have more confidence, they’ll spend more, more people will get hired, and overall the economy will improve,” he said. “It’s still tough out there.”
At a campaign-style town hall meeting at the headquarters of Facebook Inc., Obama described the House Republicans’ budget plan as “fairly radical” and said members of both political parties in Washington need to work together to start reducing the federal deficit in a “balanced way.”
“We have an unsustainable situation,” he said. “We face a critical time where we are going to have to make some decisions -- how do we bring down the debt in the short term, and how do we bring down the debt over the long term?”
After his appearance at Facebook, Obama turned his attention to a private fundraising dinner in San Francisco hosted by Marc R. Benioff, chairman and chief executive of Salesforce.com, a cloud computing company. Tickets for the dinner, attended by about 60 people, were $35,800 a person.
Obama spoke after a performance by singer Stevie Wonder, telling a roomful of early supporters: “Some of you were involved in startups. Well, I was a startup.”
“We started something in 2008,” Obama said of his first campaign. “We haven’t finished it yet,” he said, reeling off needs to overhaul education, improve clean energy programs and reduce debt and deficits. “I’m going to need you to help me finish it.”
More Fundraising
From there, the president attended a “Gen44” Obama fundraising event at the Nob Hill Masonic Center, where ticket prices ranged between $25 and $2,500, according to a Democratic official who wasn’t authorized to discuss such details publicly.
Obama is to appear at a fundraiser at the St. Regis Hotel in San Francisco today before leaving for Nevada, a politically important state in 2012 with an open Senate seat. The president is scheduled to hold a “town hall” meeting in Reno at ElectraTherm Inc., a small renewable energy company, giving him a chance to reinforce his push for increased spending on clean- energy technology.
Later in the day, he is to return to California for fundraisers in Los Angeles, including events at Sony Pictures where actor-singer Jamie Foxx is scheduled to appear.
The fundraising events in San Francisco and Los Angeles are expected to bring in between $4 million and $5 million, the Democratic official said.
Bill Carrick, a Democratic strategist based in Los Angeles, described the trip as “not a full-fledged campaign trip, but it has some of the dynamics of preparing to run a campaign,” such as efforts to “start focusing on swing states early so you can broaden the electoral map.”
Reach Out
Facebook, with more than 500 million users, is the world’s largest social network website. It was founded in 2004 by Mark Zuckerberg.
Obama has used social media sites such as Google Inc. (GOOG)’s YouTube to reach out to voters. Yesterday’s session is the first time he has appeared on Facebook, which passed Google last year to become the most visited website in the U.S.
Zuckerberg, joined by Chief Operating Officer Sheryl Sandberg, moderated the event. Obama took questions filed online through the White House’s Facebook page and website, along with those from an audience of Facebook employees, small-business leaders and Silicon Valley entrepreneurs.
Obama said using Facebook allows us to “make sure this isn’t just a one-way conversation.”
“This format and this company, I think, is an ideal means for us to be able to carry on this conversation,” the president said. “We’re having a very serious debate right now about the future direction of our country.”
Separate Plans
The White House and House Republicans have offered separate plans to reduce cumulative budget deficits by $4 trillion, over 12 years and 10 years respectively. Obama’s plan would include $1 trillion in tax increases that his advisers say could be raised from families earning at least $250,000, while the Republicans’ measure wouldn’t raise taxes.
“The Republican budget that was put forward I would say is fairly radical. I wouldn’t call it particularly courageous,” he said. “I would call it short-sighted.”
Obama criticized the Republican plan for preserving tax breaks while chopping funds from programs such as clean energy and for seeking to overhaul Medicare and Medicaid health insurance programs for the elderly and the poor.
“Nothing is easier than solving a problem on the backs of people who are poor or people who are powerless,” he said.
Obama said he remains committed to pushing for an overhaul of the nation’s immigration laws. He said members of both parties must cooperate to get it done.
Housing Market
The president said the economy is still “not growing quite as fast as we would like” even after creating almost 2 million jobs in the past 18 months. He called the housing market “probably the biggest drag” on the economy.
“What I’m really concerned about is making sure that the housing market overall recovers enough that it’s not such a huge drag on the economy because, if it isn’t, then people will have more confidence, they’ll spend more, more people will get hired, and overall the economy will improve,” he said. “It’s still tough out there.”
Gold May Advance Next Week on Faster Inflation, Debt Concern, Survey Shows
Gold may extend gains from a record as concern about debt and faster inflation spur demand for the metal as an alternative investment, a survey found.
Seventeen of 20 traders, investors and analysts surveyed by Bloomberg, or 85 percent, said bullion will rise next week. Two predicted lower prices and one was neutral. Gold for June delivery was up 1.2 percent for this week at $1,504.30 an ounce by 11:18 a.m. yesterday on the Comex in New York after reaching a record $1,506.20 earlier in the day.
“The issues driving gold such as inflation, euro zone debt and Middle East and North African unrest are not going to be solved overnight,” James Moore, an analyst at TheBullionDesk.com in London, said in an e-mail. It’s “unwise to buck the trend.”
Standard & Poor’s this week lowered its U.S. credit-rating outlook, citing the widening budget deficit and helping push the dollar to a 16-month low versus six major currencies. The European Central Bank this month raised interest rates from a record low as inflation quickened. Fighting in Libya and Japan’s nuclear crisis helped gold’s 5.8 percent increase this year.
“With market focus shifting from sovereign debt issues in the euro zone to sovereign debt issues in the U.S.,” the previous resistance level of $1,500 may become support, said Mark O’Byrne, executive director of brokerage GoldCore Ltd. in Dublin.
The attached chart tracks the results of the Bloomberg survey, with the red bars derived by subtracting bearish forecasts from bullish estimates. Readings below zero signal that most respondents expect a decline. The green line shows the gold price. The data are as of April 15.
The weekly gold survey started almost seven years ago and has forecast prices accurately in 206 of 359 weeks, or 57 percent of the time.
Seventeen of 20 traders, investors and analysts surveyed by Bloomberg, or 85 percent, said bullion will rise next week. Two predicted lower prices and one was neutral. Gold for June delivery was up 1.2 percent for this week at $1,504.30 an ounce by 11:18 a.m. yesterday on the Comex in New York after reaching a record $1,506.20 earlier in the day.
“The issues driving gold such as inflation, euro zone debt and Middle East and North African unrest are not going to be solved overnight,” James Moore, an analyst at TheBullionDesk.com in London, said in an e-mail. It’s “unwise to buck the trend.”
Standard & Poor’s this week lowered its U.S. credit-rating outlook, citing the widening budget deficit and helping push the dollar to a 16-month low versus six major currencies. The European Central Bank this month raised interest rates from a record low as inflation quickened. Fighting in Libya and Japan’s nuclear crisis helped gold’s 5.8 percent increase this year.
“With market focus shifting from sovereign debt issues in the euro zone to sovereign debt issues in the U.S.,” the previous resistance level of $1,500 may become support, said Mark O’Byrne, executive director of brokerage GoldCore Ltd. in Dublin.
The attached chart tracks the results of the Bloomberg survey, with the red bars derived by subtracting bearish forecasts from bullish estimates. Readings below zero signal that most respondents expect a decline. The green line shows the gold price. The data are as of April 15.
The weekly gold survey started almost seven years ago and has forecast prices accurately in 206 of 359 weeks, or 57 percent of the time.
Gold Rises Above $1,500 to a Record on Slumping Dollar, Inflation Concern
Gold futures rose to a record for the ninth time this month as a weakening dollar boosted investment demand for the precious metal as an alternative asset. Silver topped $45 an ounce for the first time since 1980.
Gold reached $1,506.50 an ounce in New York as the dollar slipped as much as 1 percent against a basket of six major currencies to trade at a 16-month low. Gold has risen 32 percent in the past year as the dollar fell 8.2 percent. Earlier this week, Standard & Poor’s revised its long-term outlook for U.S. debt to negative from stable.
“For the dollar, the S&P statement was like getting kicked when you’re already down,” said Matt Zeman, a senior market strategist at Kingsview Financial in Chicago. “The dollar is losing its status as the king of the hill, and gold is looking to take its place.”
Gold futures for June delivery rose $3.80, or 0.3 percent, to settle at $1,498.90 at 1:37 p.m. on the Comex in New York. The most-active contract has posted records for four straight days.
Gold for immediate delivery in London rose as much as 0.6 percent, to a record $1,506.03 an ounce.
The Treasury Department has projected that the government will reach the $14.3 trillion debt-ceiling limit no later than May 16 and run out of options for avoiding default by early July.
“As the numbers show, the debt cannot be repaid without dollar debasement, so people are warming up to the idea of hoarding gold,” Zeman said.
Commodity Inflation
Gold also gained on demand for an inflation hedge. The Thomson Reuters/Jefferies CRB Index of 19 commodities rose as much as 1.7 percent. A U.S. gauge of traders’ inflation expectations approached the highest level since 2008.
“The dollar has lost ground to its major counterparts,” James Moore, an analyst at TheBullionDesk.com in London, said in a report to clients. “The mix of inflation, currency debasement, euro-zone debt and Middle East and North African unrest continues to fuel investment demand.”
The difference between yields on U.S. 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for inflation, today widened to as much as 2.66 percentage points. The spread reached 2.67 percentage points on April 11, the most in three years.
Silver Surges
Silver futures for May delivery rose 54.8 cents, or 1.2 percent, to $44.461 on the Comex, after touching $45.40, the highest since January 1980. That year, the price reached a record $50.35.
An ounce of gold bought as little as 33.59 ounces of silver in London today, the smallest ratio since August 1983, data compiled by Bloomberg show.
“The metals are being led by silver,” said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago. “You’ve got a parabolic market forming. The general opinion is that silver is undervalued, and that feeds the rally.”
Palladium futures for June delivery rose $27.80, or 3.8 percent, to $758.90 an ounce on the New York Mercantile Exchange. Platinum futures for July delivery rose $31.50, or 1.8 percent, to $1,802.80 an ounce.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net
Gold reached $1,506.50 an ounce in New York as the dollar slipped as much as 1 percent against a basket of six major currencies to trade at a 16-month low. Gold has risen 32 percent in the past year as the dollar fell 8.2 percent. Earlier this week, Standard & Poor’s revised its long-term outlook for U.S. debt to negative from stable.
“For the dollar, the S&P statement was like getting kicked when you’re already down,” said Matt Zeman, a senior market strategist at Kingsview Financial in Chicago. “The dollar is losing its status as the king of the hill, and gold is looking to take its place.”
Gold futures for June delivery rose $3.80, or 0.3 percent, to settle at $1,498.90 at 1:37 p.m. on the Comex in New York. The most-active contract has posted records for four straight days.
Gold for immediate delivery in London rose as much as 0.6 percent, to a record $1,506.03 an ounce.
The Treasury Department has projected that the government will reach the $14.3 trillion debt-ceiling limit no later than May 16 and run out of options for avoiding default by early July.
“As the numbers show, the debt cannot be repaid without dollar debasement, so people are warming up to the idea of hoarding gold,” Zeman said.
Commodity Inflation
Gold also gained on demand for an inflation hedge. The Thomson Reuters/Jefferies CRB Index of 19 commodities rose as much as 1.7 percent. A U.S. gauge of traders’ inflation expectations approached the highest level since 2008.
“The dollar has lost ground to its major counterparts,” James Moore, an analyst at TheBullionDesk.com in London, said in a report to clients. “The mix of inflation, currency debasement, euro-zone debt and Middle East and North African unrest continues to fuel investment demand.”
The difference between yields on U.S. 10-year notes and Treasury Inflation Protected Securities, a gauge of trader expectations for inflation, today widened to as much as 2.66 percentage points. The spread reached 2.67 percentage points on April 11, the most in three years.
Silver Surges
Silver futures for May delivery rose 54.8 cents, or 1.2 percent, to $44.461 on the Comex, after touching $45.40, the highest since January 1980. That year, the price reached a record $50.35.
An ounce of gold bought as little as 33.59 ounces of silver in London today, the smallest ratio since August 1983, data compiled by Bloomberg show.
“The metals are being led by silver,” said Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago. “You’ve got a parabolic market forming. The general opinion is that silver is undervalued, and that feeds the rally.”
Palladium futures for June delivery rose $27.80, or 3.8 percent, to $758.90 an ounce on the New York Mercantile Exchange. Platinum futures for July delivery rose $31.50, or 1.8 percent, to $1,802.80 an ounce.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net
Tuesday 19 April 2011
Gold Rises to Record $1,498.90 an Ounce as Weakening Dollar Stokes Demand - By Bloomberg
Gold extended gains to a record in New York as a drop in the dollar buoyed demand for the metal as an alternative investment.
Futures surged yesterday after Standard & Poor’s revised its U.S. credit outlook to negative. Gold has jumped 5.3 percent this year as the dollar dropped 4.8 percent against a basket of six other currencies including the euro and British pound.
Gold prices may keep rising for “some years into the future,” Blackrock Inc. (BLK) fund manager Evy Hambro said in an interview with Mark Barton on Bloomberg TV’s “On the Move.”
Gold for June delivery rose $1.60, or 0.1 percent, to $1,494.60 an ounce by 8:20 a.m. in New York after earlier today climbing to $1,498.90. Immediate-delivery gold was little changed at $1,493.93 an ounce in London.
The 14-day relative strength index of gold futures rose to 70.135, above the level of 70 that some analysts who study charts view as a sign that prices are poised to drop.
“$1,500 is definitely a psychological level,” said Mark O’Byrne, executive director of brokerage GoldCore Ltd. in Dublin. “Any correction is likely to be short and shallow, given the very strong fundamentals.”
At current prices, gold is still $900 below the inflation- adjusted level, GoldCore’s O’Byrne said, adding that gold may reach as much as $2,400 in the coming years.
‘Debt Issue’
“The focus has moved to the U.S. sovereign debt issue,” O’Byrne said. “There are very significant risks in the world, that’s why people are diversifying into gold. Before, the U.S. government debt was meant to be risk free. Now that is in question.”
Gold has gained in the last 10 years on increased investment demand for commodities and on concern that currencies may be debased as central banks stimulate their economies. Unrest in the Middle East, sovereign-debt turmoil in Europe and Japan’s nuclear crisis have bolstered sales, propelling bullion 32 percent higher in the past year.
Additional support for gold came from quickening inflation that has prompted policy makers across the globe to raise interest rates. Consumer prices in China rose at their quickest pace since 2008 in March, exceeding the government’s 2011 target for a third month.
Inflation ‘Impetus’
Inflation in the 17-nation euro region quickened to 2.7 percent from 2.4 percent in February, the European Union’s statistics office said last week. U.S. wholesale costs rose 5.8 percent in March compared with a year earlier, and the government said that the cost of living rose for a ninth month.
“Growing fears of rising inflation and a weak dollar continue to benefit gold and silver,” Marc Ground, an analyst at Standard Bank, wrote in a note. “Inflation-hedge buying is providing the main impetus.”
Gold held in exchange-traded products rose 0.36 metric tons to 2,070.32 tons yesterday, the highest level since Jan. 24, data compiled by Bloomberg from 10 providers show.
Silver for May delivery gained 0.7 percent to $43.275 an ounce. Palladium for June delivery was up 0.7 percent at $744.35 an ounce and platinum for July delivery rose 0.3 percent to $1,788.70 an ounce.
Futures surged yesterday after Standard & Poor’s revised its U.S. credit outlook to negative. Gold has jumped 5.3 percent this year as the dollar dropped 4.8 percent against a basket of six other currencies including the euro and British pound.
Gold prices may keep rising for “some years into the future,” Blackrock Inc. (BLK) fund manager Evy Hambro said in an interview with Mark Barton on Bloomberg TV’s “On the Move.”
Gold for June delivery rose $1.60, or 0.1 percent, to $1,494.60 an ounce by 8:20 a.m. in New York after earlier today climbing to $1,498.90. Immediate-delivery gold was little changed at $1,493.93 an ounce in London.
The 14-day relative strength index of gold futures rose to 70.135, above the level of 70 that some analysts who study charts view as a sign that prices are poised to drop.
“$1,500 is definitely a psychological level,” said Mark O’Byrne, executive director of brokerage GoldCore Ltd. in Dublin. “Any correction is likely to be short and shallow, given the very strong fundamentals.”
At current prices, gold is still $900 below the inflation- adjusted level, GoldCore’s O’Byrne said, adding that gold may reach as much as $2,400 in the coming years.
‘Debt Issue’
“The focus has moved to the U.S. sovereign debt issue,” O’Byrne said. “There are very significant risks in the world, that’s why people are diversifying into gold. Before, the U.S. government debt was meant to be risk free. Now that is in question.”
Gold has gained in the last 10 years on increased investment demand for commodities and on concern that currencies may be debased as central banks stimulate their economies. Unrest in the Middle East, sovereign-debt turmoil in Europe and Japan’s nuclear crisis have bolstered sales, propelling bullion 32 percent higher in the past year.
Additional support for gold came from quickening inflation that has prompted policy makers across the globe to raise interest rates. Consumer prices in China rose at their quickest pace since 2008 in March, exceeding the government’s 2011 target for a third month.
Inflation ‘Impetus’
Inflation in the 17-nation euro region quickened to 2.7 percent from 2.4 percent in February, the European Union’s statistics office said last week. U.S. wholesale costs rose 5.8 percent in March compared with a year earlier, and the government said that the cost of living rose for a ninth month.
“Growing fears of rising inflation and a weak dollar continue to benefit gold and silver,” Marc Ground, an analyst at Standard Bank, wrote in a note. “Inflation-hedge buying is providing the main impetus.”
Gold held in exchange-traded products rose 0.36 metric tons to 2,070.32 tons yesterday, the highest level since Jan. 24, data compiled by Bloomberg from 10 providers show.
Silver for May delivery gained 0.7 percent to $43.275 an ounce. Palladium for June delivery was up 0.7 percent at $744.35 an ounce and platinum for July delivery rose 0.3 percent to $1,788.70 an ounce.
Gold-Shortage Threat Drives Texas Schools Hoarding 664,000 Ounces at HSBC By David Mildenberg and Pham-Duy Nguyen - Apr 19, 2011 6:34 AM GMT+0800
Dallas hedge-fund manager J. Kyle Bass helped advise the University of Texas Investment Management Co. on taking delivery of 6,643 gold bars, worth $991.7 million yesterday, that are stored in a bank warehouse in New York.
Bass, who made $500 million with 2006 bets on a U.S. subprime-mortgage market collapse, said managers of the endowment, known as UTIMCO, sought board approval to convert its gold investments into bullion this year. A board member, Bass, 41, said he was asked to help with that process.
While Bass, a managing partner at Hayman Capital Management LP, said in an April 16 e-mail that “the decision to purchase and take delivery of the physical gold” was made by endowment staff members, “I helped where I could.” Gold futures touched a record $1,498.60 an ounce today in New York before settling at $1,492.90.
The Texas fund’s $19.9 billion in assets ranked it behind only Harvard University’s endowment as of August, according to the National Association of College and University Business Officers. Last year, UTIMCO added about $500 million in gold investments to an existing stake, said Bruce Zimmerman, the endowment’s chief executive officer. The fund’s managers sought to take delivery of bullion to protect against demand for the metal overwhelming supply, according to Bass.
Contracts Exceed Supply
Open interest in gold futures and options traded on the Comex typically exceeds supplies held in its warehouses. If the holders of just 5 percent of those contracts opted to take delivery of the metal, there wouldn’t be enough to cover the demand, Bass said.
“If you own a paper contract where they can only deliver you 10 cents on the dollar or less, you should probably convert it to physical,” said Bass, who isn’t related to Fort Worth’s billionaire Bass family. He said holding cash wasn’t a better choice because the rate of inflation exceeds money-market rates by 2.5 percent to 3 percent, eroding the value of cash.
“The call to take delivery is more of a challenge to the system and it borders on the anarchistic,” said Ralph Preston, a principal at Heritage West Financial Inc., a San Diego company that specializes in futures trading. “It’s like the Republicans trying to overturn President Obama over the birth certificate issue. It’s poor sportsmanship.”
Storage Costs
Bullion banks generally charge his clients about $15 a month to store a 100-ounce bar of gold, the amount covered by a single contract, Preston said. The Texas fund negotiated with Comex to pay about 0.1 percent of the metal’s value, Bass said.
That would indicate an annual cost of about $992,000 to store the delivered gold, based on today’s price. By comparison, the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, charges a management fee of 0.4 percent of invested assets. That would reach almost $4 million for the Texas fund.
Sovereign-debt concerns also boosted demand for the metal today, driving Comex futures to an all-time high as Standard & Poor’s revised its U.S. credit outlook to negative. The price has climbed 31 percent in the past year.
“Why hold your money in dollars when the Fed can double and triple the supply rather quickly and quietly and won’t even tell us what they are doing,” U.S. Representative Ron Paul, a Texas Republican who has for decades favored a return to a currency backed by precious metals, said today in a telephone interview. “Logic tells me a lot more people will do it.”
10-Year Rally
Gold’s 10-year rally has attracted billionaire investors such as George Soros and John Paulson, who seek a store of value as record-low interest rates erode returns on currencies.
“You’re starting to see institutional investors accepting gold and commodities as legitimate investible assets and taking physical control of them,” said Michael Cuggino, who helps manage about $12 billion at the Permanent Portfolio Funds in San Francisco. About 20 percent of the fund is in gold stored in Comex warehouses.
“Central banks are printing more money than they ever have, so what’s the value of money in terms of purchases of goods and services,” Bass said April 15 in a telephone interview. “I look at gold as just another currency that they can’t print any more of.”
Few investors take physical delivery of bullion. As of April 14, 2,860 contracts this month, about 0.5 percent of total open interest, had been converted to metal, exchange data show.
Slowing Deliveries
Physical deliveries have slowed as gold topped records this year, said Blake Robben, a senior market strategist who handles deliveries of Comex metals for clients at Chicago-based broker Lind-Waldock.
“It’s usually wealthy individuals with net worth over $1 million who want to take delivery to diversify away from the dollar,” Robben said. “Generally, it’s a big hassle and not worth it to take delivery.”
Investors should be wary of government attempts to curtail holding gold, Paul said, citing U.S. ownership restrictions in the 1930s. “Governments don’t like to be embarrassed.”
To own 100 ounces of gold futures with Lind-Waldock, investors pay a $100 fee and put up $6,571 in a margin account to buy a single contract. To take delivery of a 100-ounce bar, investors have to pay the contract’s full price.
Bass, a Texas Christian University graduate who was named to the endowment’s board in August, is a former salesman with Bear Stearns Cos. and Legg Mason Inc. He said about 5 percent of his hedge fund is invested in gold.
The endowment, which oversees funds held by the University of Texas System and Texas A&M University, has 664,300 ounces of bullion in a Comex-registered vault in New York owned by HSBC Holdings Plc (HSBA), the London-based bank, according to a report distributed at a meeting in Austin last week. The fund said its cost basis for the gold investment was $764 million.
“I simply voted as a board member to approve the storage facility and concurred with their decisions,” Bass said.
Gold May Top $1,500, Extending Rally to Record, as U.S. Credit Outlook Cut By Kim Kyoungwha and Pham-Duy Nguyen - Apr 19, 2011 8:47 AM GMT+0800
Gold may advance to a record for a fourth day, topping $1,500 an ounce, as Standard & Poor’s downgrade of the U.S. credit outlook, Europe’s debt crisis and rising inflation bolstered the appeal of precious metals.
Immediate-delivery bullion was little changed at $1,495.30 an ounce at 7:55 a.m. in Singapore, after touching an all-time high of $1,497.90 an ounce yesterday. Gold for June delivery in New York rose as much as 0.3 percent to $1,497.40 an ounce before trading at $1,495.70, near its record $1,498.60.
“This is a shocker and a stunner,” said Michael Pento, a senior economist at Euro Pacific Capital in New York. “The U.S. has the world’s reserve currency. International investors have been using gold and silver as an alternative currency and an alternative to the dollar, and this will only exacerbate and accelerate that process.”
S&P changed its long-term rating from stable, citing “material risk” that policy makers won’t reach an accord on “medium- and long-term budgetary challenges.” The move followed last week’s downgrade by Moody’s Investors Service of Ireland’s credit rating by two notches to the lowest investment grade, eroding the value of the euro. The dollar has declined 4.5 percent against a basket of currencies this year.
Gold has gained every year since 2001 on increased investment demand for commodities and on concern that currencies may be debased as central banks stimulate their economies. Unrest in the Middle East, sovereign-debt turmoil in Europe and Japan’s nuclear crisis have bolstered sales, propelling bullion 31 percent higher in the past year.
Credit Downgrade
Pento, who correctly predicted gold’s rally in the past three years, said the metal will reach $1,600 in 2011.
“The U.S. credit rating will undoubtedly be lowered in the next few years,” Pento said. “This will mean much higher borrowing costs and a much lower currency.”
The Treasury Department has said the borrowing limit will be reached no later than May 16, at which point it will turn to emergency measures that provide borrowing room through about July 8. Republican leaders in Congress have said they won’t back increasing the debt ceiling unless President Barack Obama agrees to more specific steps to trim the budget deficit.
Additional support for gold came from rising inflation that has prompted policy makers across the globe to raise interest rates. Consumer prices in China rose at their quickest pace since 2008 in March, exceeding the government’s 2011 target for a third month.
Inflation in the 17-nation euro region quickened to 2.7 percent from 2.4 percent in February, the European Union’s statistics office said last week. U.S. wholesale costs rose 5.8 percent in March compared with a year earlier, and the government said that the cost of living rose for a ninth month.
‘Growing Fears’
“Growing fears of rising inflation and a weak dollar continue to benefit gold and silver,” Marc Ground, an analyst with Standard Bank, wrote in a note. “Inflation-hedge buying is providing the main impetus.”
Total gold demand rose for a third yearly gain in 2010, led by a 66 percent jump in sales of physical gold bars to a record 880.5 metric tons, according to researcher GFMS. Gold held in exchange-traded products rose 19.3 tons to 2,069.95 tons on April 15, the highest level since Jan. 24, data compiled by Bloomberg from 10 providers show.
“One of the most interesting highlights is the massive growth in physical gold bar investment,” David Wilson, London- based analyst with Societe Generale, wrote in a note.
Cash silver fell 0.4 percent to $43.2575 an ounce after rallying 1.2 percent to $43.525 an ounce, the highest price since 1980 yesterday. Palladium added 0.3 percent to $737.75 an ounce and platinum increased 0.1 percent to $1,783.25 an ounce.
Immediate-delivery bullion was little changed at $1,495.30 an ounce at 7:55 a.m. in Singapore, after touching an all-time high of $1,497.90 an ounce yesterday. Gold for June delivery in New York rose as much as 0.3 percent to $1,497.40 an ounce before trading at $1,495.70, near its record $1,498.60.
“This is a shocker and a stunner,” said Michael Pento, a senior economist at Euro Pacific Capital in New York. “The U.S. has the world’s reserve currency. International investors have been using gold and silver as an alternative currency and an alternative to the dollar, and this will only exacerbate and accelerate that process.”
S&P changed its long-term rating from stable, citing “material risk” that policy makers won’t reach an accord on “medium- and long-term budgetary challenges.” The move followed last week’s downgrade by Moody’s Investors Service of Ireland’s credit rating by two notches to the lowest investment grade, eroding the value of the euro. The dollar has declined 4.5 percent against a basket of currencies this year.
Gold has gained every year since 2001 on increased investment demand for commodities and on concern that currencies may be debased as central banks stimulate their economies. Unrest in the Middle East, sovereign-debt turmoil in Europe and Japan’s nuclear crisis have bolstered sales, propelling bullion 31 percent higher in the past year.
Credit Downgrade
Pento, who correctly predicted gold’s rally in the past three years, said the metal will reach $1,600 in 2011.
“The U.S. credit rating will undoubtedly be lowered in the next few years,” Pento said. “This will mean much higher borrowing costs and a much lower currency.”
The Treasury Department has said the borrowing limit will be reached no later than May 16, at which point it will turn to emergency measures that provide borrowing room through about July 8. Republican leaders in Congress have said they won’t back increasing the debt ceiling unless President Barack Obama agrees to more specific steps to trim the budget deficit.
Additional support for gold came from rising inflation that has prompted policy makers across the globe to raise interest rates. Consumer prices in China rose at their quickest pace since 2008 in March, exceeding the government’s 2011 target for a third month.
Inflation in the 17-nation euro region quickened to 2.7 percent from 2.4 percent in February, the European Union’s statistics office said last week. U.S. wholesale costs rose 5.8 percent in March compared with a year earlier, and the government said that the cost of living rose for a ninth month.
‘Growing Fears’
“Growing fears of rising inflation and a weak dollar continue to benefit gold and silver,” Marc Ground, an analyst with Standard Bank, wrote in a note. “Inflation-hedge buying is providing the main impetus.”
Total gold demand rose for a third yearly gain in 2010, led by a 66 percent jump in sales of physical gold bars to a record 880.5 metric tons, according to researcher GFMS. Gold held in exchange-traded products rose 19.3 tons to 2,069.95 tons on April 15, the highest level since Jan. 24, data compiled by Bloomberg from 10 providers show.
“One of the most interesting highlights is the massive growth in physical gold bar investment,” David Wilson, London- based analyst with Societe Generale, wrote in a note.
Cash silver fell 0.4 percent to $43.2575 an ounce after rallying 1.2 percent to $43.525 an ounce, the highest price since 1980 yesterday. Palladium added 0.3 percent to $737.75 an ounce and platinum increased 0.1 percent to $1,783.25 an ounce.
Australian, N.Z. Dollars Weaken Second Day on U.S., Europe Debt Concerns By Ron Harui - Apr 19, 2011 9:51 AM GMT+0800
The Australian and New Zealand dollars fell for a second day versus the greenback after Standard & Poor’s cut the U.S. long-term credit outlook to negative, damping demand for higher-yielding assets.
Australia’s currency dropped for a fourth day against the yen as Asian equities extended a slump in shares around the world, discouraging investors from buying the South Pacific nation’s securities. The Australian and New Zealand currencies also weakened against most of their major counterparts on concern Europe’s debt crisis is worsening.
“Everywhere including the U.S. and Europe aren’t looking good fiscally,” said Osao Iizuka, head of foreign-exchange trading in Tokyo at Sumitomo Trust & Banking co., a unit of Japan’s third-largest banking group. “Risk aversion may cause selling of high-yielding currencies.”
Australia’s dollar declined to $1.0485 as of 11:35 a.m. in Sydney from $1.0509 in New York yesterday. The Aussie weakened 0.4 percent to 86.55 yen. New Zealand’s dollar fell 0.6 percent to 78.64 U.S. cents, and slipped 0.7 percent to 64.91 yen.
The MSCI Asia Pacific Index of shares slid 1.1 percent after the Standard & Poor’s 500 Index fell 1.1 percent yesterday.
S&P put the U.S. government on notice that it risks losing its AAA credit rating unless policy makers agree on a plan by 2013 to reduce budget deficits and the national debt.
‘Meaningfully Weaker’
“If an agreement is not reached and meaningful implementation does not begin by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer ‘AAA’ sovereigns,” New York-based S&P said yesterday in a report that maintained its top rating on U.S. long-term debt while lowering the outlook to “negative” for the first time.
The Australian and New Zealand dollars were among the worst performers versus the yen today of 16 major counterparts after Greece’s Eleftherotypia newspaper said yesterday the nation asked the International Monetary Fund and European Union to extend the maturities of all its debt.
Finance Minister George Papaconstantinou brought the request to EU finance ministers at their meeting in Hungary on April 8-9 and to representatives of the EU, European Central Bank and IMF who visited Greece in April, the Athens newspaper said, without saying where it got the information.
Australia’s currency was little changed after the Reserve Bank of Australia viewed its policy setting as “appropriate,” saying it will look through higher inflation and slower growth stemming from natural disasters,
“Headline inflation was likely to be quite high in the March quarter, while GDP would be held down, to a greater extent than earlier assumed,” the RBA said today in minutes of its April 5 meeting. In setting interest rates, “the board would look through these fluctuations,” it said.
Australia’s currency dropped for a fourth day against the yen as Asian equities extended a slump in shares around the world, discouraging investors from buying the South Pacific nation’s securities. The Australian and New Zealand currencies also weakened against most of their major counterparts on concern Europe’s debt crisis is worsening.
“Everywhere including the U.S. and Europe aren’t looking good fiscally,” said Osao Iizuka, head of foreign-exchange trading in Tokyo at Sumitomo Trust & Banking co., a unit of Japan’s third-largest banking group. “Risk aversion may cause selling of high-yielding currencies.”
Australia’s dollar declined to $1.0485 as of 11:35 a.m. in Sydney from $1.0509 in New York yesterday. The Aussie weakened 0.4 percent to 86.55 yen. New Zealand’s dollar fell 0.6 percent to 78.64 U.S. cents, and slipped 0.7 percent to 64.91 yen.
The MSCI Asia Pacific Index of shares slid 1.1 percent after the Standard & Poor’s 500 Index fell 1.1 percent yesterday.
S&P put the U.S. government on notice that it risks losing its AAA credit rating unless policy makers agree on a plan by 2013 to reduce budget deficits and the national debt.
‘Meaningfully Weaker’
“If an agreement is not reached and meaningful implementation does not begin by then, this would in our view render the U.S. fiscal profile meaningfully weaker than that of peer ‘AAA’ sovereigns,” New York-based S&P said yesterday in a report that maintained its top rating on U.S. long-term debt while lowering the outlook to “negative” for the first time.
The Australian and New Zealand dollars were among the worst performers versus the yen today of 16 major counterparts after Greece’s Eleftherotypia newspaper said yesterday the nation asked the International Monetary Fund and European Union to extend the maturities of all its debt.
Finance Minister George Papaconstantinou brought the request to EU finance ministers at their meeting in Hungary on April 8-9 and to representatives of the EU, European Central Bank and IMF who visited Greece in April, the Athens newspaper said, without saying where it got the information.
Australia’s currency was little changed after the Reserve Bank of Australia viewed its policy setting as “appropriate,” saying it will look through higher inflation and slower growth stemming from natural disasters,
“Headline inflation was likely to be quite high in the March quarter, while GDP would be held down, to a greater extent than earlier assumed,” the RBA said today in minutes of its April 5 meeting. In setting interest rates, “the board would look through these fluctuations,” it said.
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