GOLD WEBCAST – Gold price moves higher despite positive US GDP growth

Otmane El Rhazi from The Bullion Desk.

The gold price was steady on Friday as the latest gross domestic product reading showed that the US economy grew at a solid if unspectacular rate in the fourth quarter. US GDP grew at a 2.2 percent annualised clip in the fourth quarter, revised down from the 2.6 percent pace estimated last month but slightly above the 2.1 percent forecast. A cut to import duties in India that could be announced in tomorrow’s annual budget might provide some support. Although demand in China this morning was solid, restocking after the New Year holiday seems to be fading.

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GOLD WEBCAST – Gold price moves higher despite positive US GDP growth

Otmane El Rhazi from The Bullion Desk.

The gold price was steady on Friday as the latest gross domestic product reading showed that the US economy grew at a solid if unspectacular rate in the fourth quarter. US GDP grew at a 2.2 percent annualised clip in the fourth quarter, revised down from the 2.6 percent pace estimated last month but slightly above the 2.1 percent forecast. A cut to import duties in India that could be announced in tomorrow’s annual budget might provide some support. Although demand in China this morning was solid, restocking after the New Year holiday seems to be fading.

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Gold flat as US GDP reading paints mixed picture

Otmane El Rhazi from The Bullion Desk.

The gold price was steady on Friday as the latest gross domestic product reading showed that the US economy grew at a solid if unspectacular rate in the fourth quarter.

Gold for April delivery on the Comex division of the New York Mercantile Exchange was last down 20 cents at $1,209.90 per ounce. Trade has ranged from $1,204.10 to $1,212.20.

“Gold is trading largely unchanged as the week draws to a close,” Commerzbank said. “The sharp appreciation of the dollar, which climbed to a four-and-a-half week high against the euro, drove gold in euro terms to a ten-day high of 1,080 euros per ounce.”

“January saw the US inflation rate slide into negative territory for the first time since October 2009, raising real interest rates in the US as well as the opportunity costs of holding gold,” the broker added.

In data this morning, US GDP grew at a 2.2 percent annualised clip in the fourth quarter, revised down from the 2.6 percent pace estimated last month but slightly above the 2.1 percent forecast.

“We continue to wonder whether this slowdown is due to an economy returning to a more normalised pace of growth after the removal of the Federal Reserve’s liquidity punch bowl in October or if it points to inherent weakness,” said FastMarkets’ Tom Moore, who noted that the dollar has pushed higher on this release but the precious metals have not fallen, which is most probably due to the negative connotation of reduced growth.

In the wider-markets, the dollar is still strong at 1.1222 against the euro, while Germany’s DAX and France’s CAC-40 were up 0.13 percent and 0.25 percent respectively.

Elsewhere, German import prices at -0.8 percent were as expected, while French consumer spending at 0.6 percent beat the consensus -0.3 percent. The Italian preliminary CPI at 0.3 percent was better than the forecast 0.2 percent and the previous reading of -0.4 percent.

The German preliminary CPI is set for release while the Chicago PMI, pending home sales and the University of Michigan’s consumer sentiment and inflation reports are due from the US later.

As for the other precious metals, Comex silver for May delivery were down 12.9 cents at $16.495 per ounce. Trade has ranged from $16.425 to $16.675.

Platinum futures for April delivery on the Nymex were up $2.30 at $1,175.90 per ounce, while the most-actively traded palladium contract was at $808.40 per ounce, down $2.65.

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GOLD TODAY – Fledgling rebound scuppered by dollar strength

Otmane El Rhazi from The Bullion Desk.

Short Term: Medium Term: Long Term: Resistances: R1 1204 UTL R2 1220 Rebound high so far R3 1255.40 Oct high R4 1307.90 Jan high R5 1310 Long term RL R6 1323 Aug peak R7 1345.30 July peak R8 1388.70 March & 2014 peak Support: S1 1210 Former neckline S2 1204 UTL S3 1199 61.8% Fibo S4 1183.70-1180 Former triple bottom S5 1167.50 Recent low S6 1131.60 Low so far Stochastics:Bullish Legend:R/SL= Resistance/support line UTL = Uptrend line BB = Bollinger band Fibo = Fibonacci retracement line Technical Comment Analysis The pullback from $1,300 seems to have run its course. Gold in recent days has attempted to rebound but the rebound is now being consolidated, with prices holding around the UTL. The January rally was strong – it ran out of steam ahead of the long-term RL that joins the tops of the three past significant rallies and the 100 WMA (not shown) so it is not surprising that there has been considerable resistance in the high ground and that prices have needed to consolidate. But the pullback has been severe, although support has been found around the UTL, with only short-lived spikes seen below there. The stochastics have been bouncing along in low ground but are now working higher again, which supports the view the pullback may have halted and that a rebound may start. A move up through $1,220 would look constructive again. Other factors to watch Ironically, when the Greek debt and bailout were in focus, gold prices were under pressure; now that a four-month deal has been agreed, gold prices have firmed. There seem to be two reasons for this: first, the Fed seems in no hurry to raise rates (but as we saw yesterday, a stronger-than-expected US core CPI raises questions about that); second, the rebound in oil prices, with Brent crude recovering to around $61 per barrel from a low of around $46.50, is providing some support. A rebound in oil could prompt investment back into commodity baskets. A later Chinese New Year this year and depressed prices have bolstered physical purchases – retailers stocked up ahead of the holiday period. Having restocked, physical demand may wane in the near term but… …with India widely expected to cut its import duty in the budget on February 28, there is potential for a rebound in its imports. Although the Fed may be on hold, the market does not seem to feel that the US dollar has run ahead of the fundamentals. So dollar strength, in the absence of any pick-up in geopolitical risk, is likely to weigh on gold prices. If anything were to make the dollar correct, we would expect gold to respond bullishly – broad-based currency weakness prompted by ultra-easy monetary policy could well lead to further monetisation of gold as currencies undergo competitive currency devaluation. In the near term, should New Delhi reduce import duties for gold, there could be considerable pent-up domestic demand that could tighten the physical market at a time when deliveries of gold from Shanghai Gold Exchange vaults are up 18 percent so far this year on the same period of last year. Conclusion Gold’s pullback since the January high has been severe but prices are still well above the November/December lows. Overall there are still many aspects of the global market to prompt concern, as record low bond yields show. (The notion that investors are prepared to accept negative yields strongly suggests they are looking to invest in safe havens). Perhaps gold offers a good safe haven at these price levels, considering the potential for currency devaluation. High debt and competitive currency devaluation may well lead to further monetisation of gold, especially as the EU embarks on quantitative easing next month, which should help underpin the market. In the short term, any relaxation in India’s import duties could provide a fillip for gold. All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

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Gold edges lower, price could retest $1,200 if US GDP surprises

Otmane El Rhazi from The Bullion Desk.

Gold trended downward in early morning trading on Friday, pressured lower by reduced Chinese demand and a stronger dollar ahead of the weekend.

The spot gold price was last at $1,205.90/1,206.70 per ounce, down $3.50 on the previous session’s close.

Although demand in China this morning was solid, restocking after the New Year holiday seems to be fading, MKS reported. The Chinese had initially buoyed prices on their returning to the market, with premiums hitting highs of around $6, although sources reported that it has retreated to at around $3 this morning.

US GDP figures this afternoon will closely watched – a strong reading may see gold retesting $1,200, analysts suggested.

Yesterday, the dollar hit a one- month high of 1.1183 against the euro despite mixed US inflation data. While inflation at -0.7 percent was worse than the forecast -0.6 percent, core inflation, which removes volatile elements such as energy, at 0.2 percent was better than predicted thanks to rising house prices.

“January saw the US inflation rate slide into negative territory for the first time since October 2009, raising real interest rates in the US as well as the opportunity costs of holding gold,” Commerzbank said in a note. “What is more, US consumer prices – discounting energy and food – increased somewhat more strongly than anticipated, which triggered speculation about interest rate hikes.”

A cut to import duties in India that could be announced in tomorrow’s annual budget might provide some support.

There has been speculation since the start of the year that India’s central bank might cut the duty on gold by 2-4 percentage point from 10 percent. Domestic demand would “undoubtedly benefit” from a cut, HSBC said in a note earlier this month.

Data today may add some volatility to currency markets, with the German preliminary CPI and US preliminary GDP figures topping the bill.

In numbers already released today, German import prices at -0.8 percent were as expected, while French consumer spending at 0.6 percent beat the consensus -0.3 percent. The Italian preliminary CPI at 0.3 percent was better than the forecast 0.2 percent and the previous reading of -0.4 percent.

The Chicago PMI, pending home sales and the University of Michigan’s consumer sentiment and inflation reports are due from the US later.

In the other precious metals, silver was last 13 cents lower at $16.43/16.48 per ounce, while platinum was down $4 at $1,168/1,173, as was palladium at $803/808.

(Editing by Mark Shaw)

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Gold price drops amid fading Chinese demand and stronger dollar

Otmane El Rhazi from The Bullion Desk.

The gold price was marginally lower in the Friday morning premarket in London, with a strong dollar ahead of the US GDP number weighing on sentiment.

Spot gold was last seen at $1,204.50/1,205.20, down $4.90 on the previous session as the dollar remained near its highest since January 26 at 1.1203 against the euro.

The move comes amid mixed inflation data out in the previous session. While US inflation at -0.7 percent was worse than the forecast -0.6 percent, core inflation, which removes volatile elements such as energy, at 0.2 percent was better than predicted thanks to rising house prices.

US GDP figures this afternoon will be widely eyed for pre-weekend movements, a strong reading may see gold retesting $1,200 per ounce.

“Decent” physical demand was seen overnight in Asia, although less than it has been in the last few days, MKS reported.

Chinese demand since returning from its Spring Festival holiday had initially buoyed prices around $1,210 per ounce, however restocking post Lunar New Year is expected to continue to fade.

“The precious metals strode out early yesterday and that looked potentially quite bullish, but then retreated when the stronger US core CPI data came out that strengthened the dollar. So for now, the markets are consolidating and it seems likely they will be driven by the dollar today,” FastMarkets analyst William Adams said.

“That said, gold may well find support today as India’s budget is being announced tomorrow and hopes are running high that the government will relax the import duties on gold,” he added.

Rumours have circulated since the start of the year that India’s central bank might cut the duty on gold, which is currently at 10 percent – perhaps by 2-4 percentage points, according to FastMarkets sources, or even to as low as two percent, according to others.

An import duty cut in one of the two largest consumers in the world may bolster imports and provide support to prices during what is likely to be a turbulent year for the metal.

Today sees a number of announcements which may add some volatility into the currency markets, with German preliminary CPI and US preliminary GDP figures topping the bill.

In data already released, German import prices at -0.8 percent were as expected, while French consumer spending at 0.6 percent beat consensus at -0.3 percent.

In data still to come, the Italian preliminary CPI, and out of the US, the Chicago PMI, pending home sales and the University of Michigan’s consumer sentiment and inflation reports.

In other metals, silver was last seen down 13 cents at $16.43/16.48 per ounce, while platinum was down $4 at $1,168/1,173, as was palladium at $803/808 per ounce.

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Gold price hits 1-wk high on Chinese restocking, dovish Fed

Otmane El Rhazi from The Bullion Desk.

The gold price moved higher on Thursday morning, bolstered by physical demand out of China and the dovish nature of Fed Chair Janet Yellen’s comments in testimony this week.

Spot gold was last up $11.70 at $1,216.50/1,217.20 per ounce, a one-week high, with the metal trading within a $14 intraday range so far. Silver followed gold higher, rising 31 cents to $16.82/16.87.

“I said yesterday that we will carry on within the same ranges and I don’t see anything changing that. Now that gold has again held at $1,200 I would also reiterate what I also said yesterday that I think we will see an attempt higher now,” Marex Spectron’s David Govett said.

The metal has been bolstered by further buying out of China overnight following its return from the annual Spring Festival holiday.

“Physical gold demand appears to be picking up again now that Chinese traders have returned after the New Year celebrations. This is reflected in the premiums being paid on the Shanghai Gold Exchange,” Commerzbank said.

And while premiums were slightly lower at around $3-4 than $5-6 on Wednesday, according to MKS, they are at the same level and in some instances higher than prior to the festival period when large volumes of gold were passing through its vaults.

Further comments from Fed chair Janet Yellen late in London trading in the previous session also appear to have provided a small bullish case for precious metals in the near term.

Yellen suggested that the FOMC will not consider an interest-rate rise for at least another two meetings or until June at the earliest, citing concerns about stagnant wage growth and low inflation.

“Although she did not have anything different to say, we suspect that gold investors came away with the reinforced notion that the expected rate increases that were supposed to take effect around June will now not happen until later in the year,” INTL FCStone’s Ed Meir said in a note.

“Be that as it may, this is a rather slim read on which to build a bullish case on for gold and we still are of the view that the precious metal will be under pressure,” he added.

In data today, the GFK German consumer climate figure at 9.7 was broadly in line with consensus, while the country’s unemployment change at -20,000 bettered forecasts.

For the eurozone as a whole, M3 money supply at 4.1 percent also outperformed, as did private loans at -0.1 percent, but Italian retail sales fell short at -0.2 percent.

Monthly consumer inflation figures, weekly unemployment claims data and durable goods orders are due from the US later.

“All of these have the capacity to move the market one way or the other. So expect muted trading ahead of this,” Marex Spectron’s Govett added.

In other metals, the PGMs built on the previous session’s gains – platinum was last up $18 at $1,186.00/1,191.00 per ounce, while palladium was $7.50 higher at $811/816.

(Editing by Mark Shaw)

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GOLD WEBCAST – Shanghai gold reopens higher, Indian dore import surge continues

Otmane El Rhazi from The Bullion Desk.

The premium for gold in Shanghai has reopened at a proportionally higher level, reflecting China’s return from its annual Spring Festival holiday. Gold for immediate delivery in Shanghai was quoted at $4 over the spot price by MKS on the reopen, boosting the London spot metal price above $1,210 per ounce. In Hong Kong, a build-up of material continues to weigh on premiums, which several market sources quoted at between $0.50 and $1 over spot after it reopened for business earlier in the week. In India, premiums remained at an unchanged $2-3 over spot ahead of a possible cut to import duties in the country’s annual budget on February 28.

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Gold price breaks higher on crucial return of Chinese market

Otmane El Rhazi from The Bullion Desk.

Gold climbed in early-morning London trading, with fresh impetus provided by the return of the Chinese market after the Lunar New Year holiday.

The spot gold price was last at $1,208.20/1,209.00 per ounce, up $4.60 on Monday’s close but down from a session high of $1,212.00 during peak Asian hours. Silver followed the metal higher to $16.50/16.55, up 13 cents.

“Overnight, the Chinese returned from their New Year celebrations and what a difference it made,” Marex Spectron’s David Govett said.

The Chinese market was widely considered to be the primary catalyst behind gold’s gain of almost near 10 percent in January, with Chinese wholesalers buying up large volumes ahead of the holiday.

Withdrawals from the Shanghai Gold Exchange – a useful barometer for demand – surged to 255 tonnes in January, around 10 tonnes higher than the January 2014 total.

Support from Chinese physical buying is unlikely to be sustained, however. Jewellery consumption traditionally weakens after the New Year and retailers are comfortable holding little stock due to a rapid turnover in inventories, Precious Metals Insight’s Phillip Klapwijk told FastMarkets last week.

Still, safe-haven buying picked up on comments in the previous session from US Federal Reserve chair Janet Yellen, who suggested that interest-rate rises in the US are not as imminent as many may have anticipated.

Yields on the US 10-year treasury fell below two percent, which Commerzbank noted lent support to the gold price, which had initially hit seven-week lows at one stage earlier this week.

“Yellen’s testimony was a classic example of political double-speak, with a long ramble about patience and guidance leaving everyone fairly clueless as to when the rate rise will actually happen,” Govett added.

“Maybe and probably this is exactly what she wanted, in which case fair play to her, but the way the markets get pushed about on the back of these statements is far from helpful to the average investor,” he said.

In data out of China this morning, the flash manufacturing PMI edged into expansion mode, rising to 50.1 from the previous reading of 49.7.

US new home sales data as well as speeches from central bankers from the UK, ECB and the US are due later – these may add some volatility to the market.

The PGMs have also been performing well in light of Yellen’s comments, with investors seeing value in the more industrial precious metals. Platinum was last at $1,164/1,174 per ounce, up $5, while palladium was $13 higher at session peaks of $802/807.

(Editing by Mark Shaw)

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PGM prices hit by investor indifference, stronger mine output

Otmane El Rhazi from The Bullion Desk.

Platinum and palladium prices have been weighed down in February by soft investment demand, strong annual growth in mine production in South Africa and a weak European economy, Société Générale said in a note.

Platinum futures on the New York Mercantile Exchange are currently trading at $1,165.50 per ounce, down 9.2 percent from the recent peak of $1,285 on January 21. Palladium meanwhile has been trading in a sideways fashion since the beginning of the year, ranging from around $760 and $820.

On the investment side, platinum and palladium ETF holdings are down 2.7 percent and 2.9 percent, respectively, from the end of last year, SocGen analyst Robin Bhar said.

“ETF purchases and sales have a significant influence on PGM physical demand and represent a significant portion of investment demand,” Bhar said.

For example, platinum ETF holdings in 2014 increased just 107,000 ounces, accounting for only two percent of total physical demand, compared to additions of almost 900,000 ounces, or 14 percent of total physical demand, the prior year, Bhar said.

“The decline in holdings this year likely reflects investor weariness to open long positions in these metals given the expected increase in mine production this year relative to last when a multi-month strike reduced supply out of South Africa by 32 percent for platinum and 24 percent for palladium,” Bhar said.

“Negative investor sentiment also could be fuelled by a weak European economy, which has a significant influence on auto demand for these metals,” he added.

On the supply-side, South African mine production is expected to increase 23 percent and 18 percent for platinum and palladium, respectively, in 2015, SocGen said.

“On 9 February, Anglo American Platinum reported results for the 2014 calendar year including a 21 percent decline in equivalent refined platinum production in 2014, but cited a faster than expected ramp-up post strike as helping to curb the decline,” Bhar said.

“A faster than expected ramp-up period for the company as well as Lonmin has weighed on investor expectations of PGM price appreciation in the short to medium term,” he added.

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GOLD WEBCAST – Gold price under pressure as Greece nears deal on debt saga

Otmane El Rhazi from The Bullion Desk.

Gold fell back below the key psychological level of $1,200 on Monday morning, pressured lower by Greece edging closer to a deal with its creditors on its bailout. Greece has reached a deal in principle with its creditors to extend the country’s 240-billion-euro bailout although it must present a list of reforms to its lenders to secure the four-month extension, making a messy departure from the eurozone – the so-called ‘Grexit’ – less likely. Still, any suggestion that the reforms will be rejected could see the deal collapse and reignite safe-haven appeal for gold. Still to come, a speech from ECB President Mario Draghi, a speech from Fed Chair Janet Yellen, the return of the Chinese market and US GDP

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Gold price slips on new Greek hope

Otmane El Rhazi from The Bullion Desk.

The gold market was quiet on Monday as the Chinese remain sidelined and relief emanates from Europe following a last minute deal to extend Greece’s bailout.

Gold for April delivery on the Comex division of the New York Mercantile Exchange was last down $4.40 at $1,200.50 per ounce. Trade has ranged from $1,190.60 to $1,204.70.

“The Chinese return from their New Year’s holiday later this week and with levels around the $1,200 area, we may well see some physical demand,” Marex Spectron’s David Govett said. “However the market seems quite happy to sell any rallies and I don’t see prices moving up substantially for a while to come.”

Greece has reached a deal in principle with its creditors to extend the country’s 240-billion-euro bailout although it must present a list of reforms to its lenders to secure the four-month extension, making a messy departure from the eurozone – the so-called ‘Grexit’ – less likely.

“Difficult as it is to predict at this point, we suspect that the Greek proposals will ultimately get a European sign-off on Monday, in which case we could see further price erosion in gold later in the week,” INTL FCStone’s Edward Meir said.

In gold specific data, the long liquidation in bullion futures continued for a third straight week. Comex gold net longs were down by 2.99 million ounces in the week ending February 17, according to CFTC data.

“The reality is that despite the speculative clean out over the last couple of weeks, gold net positioning is still around 22 percent above the 12- month average,” UBS analyst Edel Tully said

“Given recent encouraging developments in Europe, there could still be some room for further downside for gold. Specifically, the bigger risk for gold right now is the fact that gross shorts remain relatively lean: the reduction of immediate eurozone risks is likely to encourage shorts – who have been hesitant – to rebuild positions here,” Tully added.

It’s a light day for data, the German IFO business climate at 106.8 fell short of consensus at 107.4. US existing home sales are due later. The pace will pick up during the week, where attention will turn to numbers from China.

In the wider-markets, the dollar was 0.54 percent stronger at 1.1322 against the dollar, while Germany’s DAX and France’s CAC-40 were up 0.45 percent and 0.28 percent respectively.

As for the other precious metals, Comex silver for the March delivery were up 11.2 cents at $16.385 per ounce. Trade has ranged from $16.065 to $16.475.

Platinum for April delivery on the Nymex were up $3.10 at $1,166.40 per ounce, while the most-actively traded palladium contract was at $782.85 per ounce, up $3.65.

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Gold price falls below $1,200 to 7-wk low, Greece nears deal

Otmane El Rhazi from The Bullion Desk.

Gold fell back below the key psychological level of $1,200 on Monday morning, pressured lower by Greece edging closer to a deal with its creditors on its bailout.

The spot gold price at $1,193.00/1,193.80 per ounce was down $8 on the pre-weekend close – it hit its lowest in seven weeks at $1,190.90 earlier this morning and traded no higher than $1,205.

“It seems that Monday will be a critical day for the markets and we could see gold trade in a much wider range than what has been the case for the past few days,” INTL FCStone’s Ed Meir said.

Greece has reached a deal in principle with its creditors to extend the country’s 240-billion-euro bailout although it must present a list of reforms to its lenders to secure the four-month extension, making a messy departure from the eurozone – the so-called ‘Grexit’ – less likely.

Still, any suggestion that the reforms will be rejected could see the deal collapse and reignite safe-haven appeal for gold.

“Difficult as it is to predict at this point, we suspect that the Greek proposals will ultimately get a European sign-off on Monday, in which case we could see further price erosion in gold later in the week,” Meir added.

Also weighing on prices is a stronger dollar at 1.1319 against the euro, up around 0.6 percent.

While the return of the Chinese market from later this week after the Lunar New Year holiday may provide a fillip to prices, Precious Metals Insight’s Phillip Klapwijk noted last week that buying is likely to be subdued.

Wholesalers already are well stocked and reordering after the holiday is seasonally weaker because retailers carry little stock compared to their sales volume due to very rapid turnover of their inventory.

“The Chinese return from their New Year’s holiday later this week and with levels around the $1,200 area, we may well see some physical demand. However the market seems quite happy to sell any rallies and I don’t see prices moving up substantially for a while to come,” Marex Spectron’s David Govett said.

In a quiet day for data, the German IFO business climate at 106.8 fell short of consensus at 107.4. US existing home sales are due later

Other metals were steadier – silver was last down five cents at $16.14/16.19 per ounce, while platinum was unchanged at $1,156.00/1,161.00 but still at its lowest in five-and-a-half years and palladium was $1 lower at $774/779.

(Editing by Mark Shaw)

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CME fines Newedge USA $1.75m for alleged trading violation

Otmane El Rhazi from The Bullion Desk.

Broker Newedge USA, a unit of French Bank Société Générale, has been fined $1.75 million for allegedly engaging in conduct that is inconsistent with just and equitable principles of trade, the CME Group said Friday in a notice of disciplinary action.

Between 2010 and 2012, Newedge employees were said to have received Comex gold and silver and Nymex platinum and palladium orders, including market and limit orders, from customers, which were executed as Exchange for Related Positions (EFRP) transactions instead of on Globex, as expected by the customers, a panel of the NYMEX Business Conduct Committee said in a statement of findings.

An EFRP consists of two discrete but related simultaneous transactions. One party to the EFRP must be the buyer of the related position and the seller of the corresponding exchange contract. The other party to the EFRP must be the seller of the related position and the buyer of the corresponding exchange contract.

“In these instances, Newedge typically entered an EFRP with a liquidity provider and then a separate EFRP with the customer at a price that included a markup. In other cases, Newedge executed the EFRP with the customer without using a liquidity provider,” the CME notice said.

“The price for the EFRP with the customers, however, was not in all instances negotiated but, rather, determined by Newedge,” it added.

The panel also alleged that there was inadequate documentation of the OTC leg of the EFRP transactions between Newedge and its customers and that in many cases the trades were not designated by Newedge on the customer account statements as EFRPs due to an operational error. For these reasons, certain of the EFRPs between Newedge and its customers were not bona fide.

According to the settlement, Newedge USA will pay the fine but is not required to admit nor deny the rule violations upon which the penalty is based.

Last May, SocGen, which also is a Category 1 ring dealer member (RDM) of the London Metal Exchange, finalised the purchase of the 50 percent of Newedge it did not already own from Credit Agricole, bringing its ownership to 100 percent.

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Gold in mixed territory, investors await news on Greece

Otmane El Rhazi from The Bullion Desk.

The gold price continued to fluctuate just above $1,200 on Friday afternoon, with Greek uncertainty propping up the market in the face of heavy downside pressure.

Spot gold was last at $1,206.00/1,206.80 per ounce, down $2.10 on Thursday’s close. It has rattled around a $14 intraday range so far, with a dollar at 1.1350 against the euro.

Mixed data out of the eurozone this morning initially pushed gold to session lows of $1,201.60 – the French and German manufacturing PMIs both fell short of forecasts at 47.7 and 50.9 respectively, with the overall bloc number also disappointing at 51.1.

The services PMIs were positive, though, and probably stemmed the euro’s losses – the French and German readings at 53.4 and 55.5 respectively were both better than expected, as was the overall eurozone number at 53.9.

The rise in the US flash manufacturing PMI to 54.3 was the first since August and has provided some extra downside pressure on gold.

“This first month-on-month increase in seven months is very significant because it suggests a turnaround in the domestic manufacturing sector,” FastMarkets analyst Tom Moore said.

On the upside, uncertainty remains over whether Greece can reach a deal with its creditors on the country’s soon-to-expire bailout. Investors will continue monitor the situation closely.

The other metals were mixed – silver was last unchanged at $16.37/16.42 per ounce, while platinum is holding just above six-year lows at $1,161, down $6. Palladium was $2 lower at $777/782.

(Editing by Mark Shaw)

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GOLD WEBCAST – Gold fluctuating just above $1200, investors await news on Greece

Otmane El Rhazi from The Bullion Desk.

On Thursday, Germany rejected Greece’s application to extend its loan agreement and renegotiate the terms of its bailout, which raised the odds that Athens could default in the coming weeks and potentially trigger a messy exit from the eurozone – the so-c Mixed data out of the eurozone this morning pushed gold lower – the French and German manufacturing PMIs both fell short of forecasts at 47.7 and 50.9 respectively, with the overall bloc number also disappointing at 51.1. Investors awaiting news from the third showdown between eurozone and Greek finance ministers in Brussels today to thrash out a deal over Greece’s 240-billion-euro bailout. A failure to reach an agreement may add some near-term safe-haven appeal to gold, with Greece’s current deal set to expire on February 28.

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Gold steady ahead of yet another Greek meeting

Otmane El Rhazi from The Bullion Desk.

The gold market was quiet on Friday with Asian participants sidelined; however, a single new headline out of Greece could easily snap the market in either direction.

Gold for April delivery on the Comex division of the New York Mercantile Exchange was last up $3.10 at $1,210.70 per ounce. Trade has ranged from $1,201.20 to $1,213.20.

“The Chinese are out of the market at the moment and shall remain out of the market until early next week due of course to the long celebration of the Lunar New Year. Thus, the Indians are left to protect the downside and thus far this year they’ve been reticent to do so aggressively,” Dennis Gartman, editor of the Gartman Letter, said.

A lot hinges on the return of China next Wednesday, agreed MKS Finance, noting that many participants are expecting them to be on the bid following the holiday.

“If this fails to be the case, the complex would likely continue its slide lower,” MKS said.

In technicals, gold’s initial break over the 100-day moving average of $1,217 yesterday was reversed later in the session after the euro fell, HSBC James Steel said.

“Bullion’s inability to hold over the 100-DMA left prices trading slightly lower they but remained firm over $1,200. We believe gold may test the psychological $1,200 level and may pose as a target for short-term traders,” Steel said.

In news, Germany on Thursday rejected Greece’s application to extend its loan agreement and renegotiate the terms of its bailout, which raised the odds that Athens could default in the coming weeks and potentially trigger a messy exit from the eurozone – the so-called Grexit. Today, Greece will hold another important meeting with its creditors.

“We’ve no idea how this shall end although we still believe that at the 11th hour, 59th minute, some resolution shall be adopted that shall keep Greece in the euro for it is to no one’s advantage for Greece to be forced out. But at the moment, as we write in the wee hours of the early morning here in the States, things look bleak,” Gartman said.

Data out of the eurozone this morning was mixed – the French and German manufacturing PMIs both fell short of forecasts at 47.7 and 50.9 respectively, with the overall bloc number also disappointing at 51.1.

The services PMIs were positive, though – the French and German readings at 53.4 and 55.5 respectively were both better than expected, as was the overall eurozone number at 53.9. The US flash manufacturing PMI is due later.

In the wider-markets, the dollar was 0.4 percent stronger at 1.1323 against the euro, while Germany’s DAX was up 0.26 percent and 0.31 percent respectively.

As for the other precious metals, Comex silver for March delivery were up 5.4 cents to $16.435 per ounce. Trade has ranged from $16.280 yo $16.495.

Platinum futures for April delivery on the Nymex was down $7.60 at $1,164.70 per ounce, while the most-actively traded palladium contract was at $782.00 per ounce, down $4.80.

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Northam Platinum swings to $30 mln H1 profit

Otmane El Rhazi from The Bullion Desk.

Northam Platinum swung to a first-half profit thanks to increased group production following protracted industrial action at the Zondereinde mine in the year-ago period, it said.

A higher rand basket price for PGMs due to the weaker exchange rate between the rand and the dollar was also a factor in the swing to a profit of 354.1 million rand ($30 million) in the six months to December 2014 from a loss of 96 million rand a year previously.

Metal sales revenues at the world’s third largest platinum producer climbed 26 percent to 3 billion rand from 2.3 billion rand in the same comparison despite the loss of 615 kg (19,772 troy ounces) of production and 255 million rand in revenues due to an incident at Zondereinde. But Booysendal metal sales jumped 59.9 percent to 1,820 kg from 1,138 kilograms.

Northam is well positioned for the future despite difficult operating conditions, CEO Paul Dunne said in the company’s earnings statement on Friday.

“Metal prices are likely to remain subdued in the near term. We remain concerned about the unstable electricity supply in South Africa, along with an unsettled labour climate,” he said.

The company recently agreed to buy Aquarius Platinum’s Everest mine in South Africa for 450 million rand ($38.7 million).

(Editing by Mark Shaw)

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Gold price under pressure close to $1,200, Europe wobbles continue

Otmane El Rhazi from The Bullion Desk.

Gold prices retested the key psychological level of $1,200 early on Friday on renewed eurozone uncertainty into the weekend.

Spot gold was last at $1,204.20/1,205.00 per ounce, down $3.80 on Thursday’s close and just off an intraday low of $1,201.60. Silver was last two cents higher at $16.39/16.44 but platinum at $1,158/1,163 was down $9 at a fresh July 2009 low and palladium slipped $1 lower to $778/783.

“Gold finds itself under unexpected pressure in a market environment fraught with uncertainties and this morning dipped temporarily to $1,200,” Commerzbank said in a note.

“In euro terms, gold is trading at around 1,060 per troy ounce. This is because positive US economic data published yesterday increased the probability of the US Federal Reserve raising interest rates sooner rather than later,” it added.

US unemployment claims dropped 21,000 to a seasonally adjusted 283,000, which was better than the 293,000 forecast, indicating that labour market there continues to heal.

Mixed data out of the eurozone this morning pushed gold lower – the French and German manufacturing PMIs both fell short of forecasts at 47.7 and 50.9 respectively, with the overall bloc number also disappointing at 51.1.

The services PMIs were positive, though, and probably stemmed the euro’s losses – the French and German readings at 53.4 and 55.5 respectively were both better than expected, as was the overall eurozone number at 53.9. The US flash manufacturing PMI is due later.

The dollar moved up to intraday highs against the euro of 1.1304 before settling at 1.1320 ahead of the third showdown between eurozone and Greek finance ministers in Brussels today to thrash out a deal over Greece’s 240-billion-euro bailout.

“This seems to be split into three camps, Greece saying ‘enough is enough, we can’t pay’, European Commission president Jean-Claude Juncker trying to fudge a temporary euro fix and Germany saying ‘no more money from us’ and over the top of Juncker and the commission,” Malcolm Freeman of Kingdom Futures told FastMarkets.

“If a solution is not found it would be very bearish for the euro and thus the European economy,” he added.

On Thursday, Germany rejected Greece’s application to extend its loan agreement and renegotiate the terms of its bailout, which raised the odds that Athens could default in the coming weeks and potentially trigger a messy exit from the eurozone – the so-called Grexit.

A failure to reach an agreement may add some near-term safe-haven appeal to gold, with Greece’s current deal set to expire on February 28.

“Sitting over all of this is the Ukrainian situation and what appears to be Russia’s intention to test European resolve to all her expansionist intentions. Given the European Union’s inability to solve the Greek issue or indeed any issue, Russia is unlikely to be worried by anything the EU does or says,” Freeman added.

(Editing by Mark Shaw)

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Gold price recovers from below $1,200 on dovish US Fed minutes

Otmane El Rhazi from The Bullion Desk.

The gold price made gains in early trading on Thursday following dovish comments from the US Federal Reserve, reversing a fall below $1,200 in the previous session.

Spot gold was last at $1,219.00/1,219.80 per ounce, up $6.60 on Wednesday’s close and after touching a six-week low in the previous session at $1,197.70 prior to the release of minutes of the US central bank’s last meeting, which indicated that it is in no hurry to raise interest rates.

“Many participants indicated that their assessment of the balance of risks associated with the timing of the beginning of policy normalization had inclined them toward keeping the federal funds rate at its effective lower bound for a longer time,” according to the minutes from the January 27-28 Federal Open Market Committee meeting released on Wednesday.

The members of the Fed’s policy board are locked in what’s become an increasingly public debate on when will be the right time to raise interest rates, which have been near zero since December 2008. The current market consensus is that the first move will be made in the second half of this year.

Additionally, the Fed noted that inflation has declined further below its longer-run objective of two percent, largely reflecting declines in energy prices; however, the FOMC added that survey-based measures of longer-term inflation expectations have remained stable.

The minutes pushed gold back above $1,200 mark, a trend that has continued into today although news that Greece has officially applied for a six-month extension on the loan agreement, Eurogroup president Jeroen Dijsselbloem said on social media platform Twitter, will be playing on its safe-haven status.

The loan agreement would be separate from the current 240-billion-euro bailout that expires at the end of the month and would therefore not carry the heavy austerity conditions included in the original facility.

According to AFP, the Eurogroup will meet on Friday to discuss the proposal.

In data today, the French CPI at -1.0 percent was worse than expectations at -0.9 percent, while the eurozone current account at 17.8 billion euros also fell short of consensus. Weekly unemployment claims out of the US and the Philly Fed manufacturing index are due later

In other gold news today, India’s central bank has removed a ban on the import of gold coins and medallions, it said. Nominated banks are now permitted to import gold on a consignment basis, although all domestically sold gold will be against upfront payment.

Other metals were also bolstered – silver was last 11 cents higher at $16.58/16.63 per ounce, while platinum recovered from six year lows to $1,176/1,181, up $9. Palladium at $773/779 was up $1.

(Additional reporting by Tom Jennemann, editing by Mark Shaw)

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Gold price jumps on doveish Fed minutes

Otmane El Rhazi from The Bullion Desk.

Gold bounced resoundingly off the session low on Wednesday after the minutes from the latest Federal Reserve meeting indicated that the US central bank is not in a hurry to raise interest rates.

“Many participants indicated that their assessment of the balance of risks associated with the timing of the beginning of policy normalization had inclined them toward keeping the federal funds rate at its effective lower bound for a longer time,” according to the minutes from the January 27-28 Federal Open Market Committee meeting released on Wednesday.

Based largely on this sentence, gold for April delivery on the Comex division of the New York Mercantile Exchange jumped from a six week low of $1,197.20 per ounce to $1,213.20 in a matter of minutes.

The members of the Fed’s policy board are locked in what’s become an increasingly public debate on when will be the right time to raise interest rates, which have been near zero since December 2008. The current market consensus is that the first hike will happen sometime in the second half of this year.

Additionally, the Fed noted that inflation has declined further below the Fed’s longer-run objective of two percent, largely reflecting declines in energy prices; however, the FOMC added that survey-based measures of longer-term inflation expectations have remained stable.

“A few committee member expressed concern that in some circumstances the public could come to question the credibility of the Committee’s two percent goal,” the minutes said. “Indeed, one participant recommended that, in light of the outlook for inflation, the Committee consider ways to use its tools to provide more, not less, accommodation.”

In the wider-markets, the dollar was 0.27 percent stronger at 1.1382 against the dollar, while Dow Jones industrial average and S&P 500 were down 0.10 percent and 0.09 percent respectively.

As for the other precious metals, Comex silver for May delivery was up 16.0 cents at $16.470 per ounce. Trade has ranged from $16.620 to $16.275.

Platinum futures for April delivery on the Nymex were up $5.70 at $1,172.90 per ounce, while the most-actively traded palladium contract was at $778.00 per ounce, up $1.40.

In news elsewhere, Greece’s government said it will request a loan extension for up to six months on Thursday, although Germany said no such deal is on the table and the country must adhere to the terms of its original 240-billion-euro bailout, which is set to expire at the end of the month.

In economic data, January US building permits were an annualised 1.05 million units, its PPI fell 0.8 percent and housing starts were 1.07 million units – only the latter matched expectations, as the others were below forecasts. Also, the capacity utilisation rate of 79.4 percent and a 0.2-percent increase in industrial production were below market expectations.

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Gold price at risk around $1,200 after China pauses for holiday

Otmane El Rhazi from The Bullion Desk.

The gold price remained marginally above the key psychological level of $1,200 on Wednesday morning but is at risk in the absence of physical support from the Chinese market.

Spot gold was last at $1,209.20/1,210.00 per ounce, up 60 cents on Tuesday’s close, with the dollar modestly higher against the euro at 1.1390.

Gold struck a six-week low in the previous session at $1,203.80 after opening at $1,231.30 when investors liquidated positions en masse as China’s Lunar New Year holiday began.

While a range of macroeconomic factors in January gave gold upward impetus, sustained physical demand out of China had underpinned the near-10-percent climb in the first few sessions of 2015, Shanghai Gold Exchange withdrawals – a useful barometer for demand – surged to 255 tonnes in January alone.

“I have been saying for weeks now that with the absence of Chinese demand over their New Year holiday period gold will come under pressure – I just didn’t think it would be so swift,” MKS’ Alex Thorndike said in a note this morning.

The moves were exacerbated by a rise in US Treasury bond yields. The 10-year yield reached 2.14 percent at one stage, up from 2.04 percent, on speculation over a prospective rise in US interest rates.

Today will see the release of the FOMC’s minutes for the January meeting – these will be scrutinised heavily for clues as to when rates will climb from near-zero levels. Previously, concerns over world growth prospects, slowing inflation due to lower oil prices and slack in the labour market appear to have steadied the Fed’s hand.

“We expect the Fed to exercise caution in its rate decision, especially given its projections of further deflation in the short term – any signal that it is moving towards raising rates would provide another boost to dollar strength, further reducing US competitiveness,” FastMarkets analyst Tom Moore said.

“This has lowered the strength of the dollar and gold on decreased safe-haven demand,” he added.

Investors will also be eyeing Greece, with eurozone finance ministers set to meet today to decide whether or not to keep granting emergency liquidity assistance to Greek banks.

Speculation has emerged that Greece will apply for an extension of its loan agreement for six months, with the country’s 240-billion-euro bailout set to expire at the end of the month.

US building permits, its PPI, housing starts, capacity utilisation rate, industrial production and TIC long-term purchases are due later

Other metals followed gold in the previous session – silver also struck a six-week low at $16.29, a drop of nearly six percent, and looks susceptible to falling further today. The metal was last at $16.45/16.50 per ounce, down one cent on Tuesday’s close.

The PGMs were a little more mixed. Platinum struck its lowest in nearly six years in the previous session and again in the early hours of Wednesday at $1,168, before settling at $1,172/1,177 per ounce, down $4, while palladium gained $2 to $780/785.

(Editing by Mark Shaw)

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Shanghai gold market winds down, Mumbai premiums recover

Otmane El Rhazi from The Bullion Desk.

The gold market in Shanghai has wound down for the annual Spring Festival although premiums remained high in the final hours ahead of the start of the week-long holiday.

The premium in Shanghai for gold for immediate delivery was quoted at $3 over the spot price on kilobars, although some sources reported it at as high as $4 on the Shanghai Gold Exchange’s au9999 contract.

Sources reported high demand in the run-up to the festival in the face of lower gold prices after the influence of several factors that pushed up the price in January waned.

Withdrawals from the Shanghai Gold Exchange – a useful barometer for wholesale demand – hit 60 tonnes in the week ending February 13 and 59 tonnes in the previous week following withdrawals of 255 tonnes in January.

“The SGE premium has clearly been affected by the run-up to Chinese New Year, the timing of the holiday and, of course, the trend in the gold price,” Precious Metals Insights managing director Phillip Klapwijk told FastMarkets.

“This meant that the Chinese New Year effect kicked in fairly ‘late’ and then was dampened somewhat by gold prices tending to be fairly high over the last month or so,” he added.

With the Chinese market on holiday for a week, support that has been in place for some weeks now will begin to fade, particularly given that importers are already well stocked ahead of the festival.

“After the holidays re-ordering is not going to be so strong – bear in mind too that post-New Year jewellery consumption will be seasonally weaker and that retailers carry little stock compared to their sales volume due to very rapid turnover of their inventory – therefore the re-ordering effect should not be exaggerated,” Klapwijk added.

In Hong Kong, a build-up of material continues to weigh on premiums, which several market sources quoted at between $0.50 and $1 over spot.

“Demand in Hong Kong for kilobars is subdued because the local trade will have long since purchased for its Chinese New Year needs, both locally and especially for HK factories in mainland China and also because the mainland manufacturers are by now closing down or already closed for the holidays,” Hong Kong-based Phillip Klapwijk said.

In India, however, the recent discount trend appears to have reversed, with premiums rising to $3 over spot, reversing from discounts as low as $5 in the previous week.

Notably, importers are said to be holding off on bringing metal into the country while awaiting a prospective cut in import duties, which could be announced in the annual budget on February 28.

The Indian government may cut the import duty on gold by 2-4 percentage points later this month from its current level of 10 percent, sources told FastMarkets, although the cut in import duty could be to as low as two percent, according to some reports.

There have also been conflicting reports emerging on the true amount of gold that came into the country in January, according to sources.

While the Ministry of Commerce and Industry quoted imports in January at around 39 tonnes, several importers claimed that the figure is actually closer to 60 tonnes, of which more than 50 percent is said to have been gold doré, although this remains unconfirmed.

The differential would run contrary to the current perception that Indian demand continues to falter due to seasonal factors.

Metals Focus’ Chirag Sheth said last week that domestic demand is unlikely to improve significantly until April or May – after the budget has been digested and on buying ahead of important religious festivals – although there may be a small uptick towards the end of March for stocking ahead of the end of the financial year.

Elsewhere, premiums in Singapore slipped to $1 from $1.50 a week ago, while in Bangkok premiums swung to $1.50 from a discount.

In Dubai, premiums remained flat on gold kilobars owing to the UAE’s continual inflow of metals and high refining capacity.

In Turkey, the market was quoted at parity, having previously been at deep discounts.

(Editing by Mark Shaw)

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Gold price bolstered by Greek uncertainty, Chinese New Year nears – GOLD WEBCAST

Otmane El Rhazi from The Bullion Desk.

Continued uncertainty surrounding Greece is providing support, with Barclays noting this morning that the likelihood of its exit from the eurozone is now higher than at any point in 2012. The Greek government is set to meet eurozone finance ministers today in Brussels to renegotiate the terms of its 240-billion-euro bailout before a February 28 deadline. If negotiations do not end positively on Monday, Eurozone ministers will decide at a second meeting on Wednesday whether or not to extend Greece’s emergency liquidity assistance programme. Investors will also keep a close watch on Ukraine after a ceasefire that came into effect on Sunday, although there are multiple reports that the agreement has already been breached in the Debaltseve region. As well, the week-long Chinese Spring Festival starts on Wednesday, which may have downside implications for the gold market while physical demand that has underpinned prices since the beginning of the year fades away.

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GOLD WEBCAST – Gold price down 0.7pct for the week as safe-haven demand fades

Otmane El Rhazi from The Bullion Desk.

Risk-sentiment remains on whether or not Greece can reach an agreement with its creditors over the country’s bailout, although positivity is building. Athens has agreed to talk to the IMF, the ECB and the European Commission on Friday about a compromise on the bailout deal which expires on February 28. The European Central Bank (ECB) has also approved extra emergency finance for Greek banks – raising the cap on emergency funding for Greek banks by five billion euros. Good buying seen in China ahead of Lunar New Year, expected to continue right up until February 19.

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Turkish gold imports in February could be weak again – Metals Focus

Otmane El Rhazi from The Bullion Desk.

Turkish gold imports in February could be weak again following the lowest January total in six years, Metals Focus (MF) warned.

The country imported just 2.26 tonnes of metal in January, according to data from the Borsa Istanbul, a drop of more than 80 percent from 11.79 tonnes in December. Local gold prices peaked last month at 3,142.00 Turkish lira per ounce, close to near historic highs.

With prices in February only slightly lower at 3,028.20 Turkish lira, imports could remain low for a second consecutive month, the research firm said in a report.

The key driver of the drop in January’s figure was a surge in jewellery scrap supply in Turkey, it added. Domestic refiners were working at full capacity, causing local premiums to move to a discount over the price on international markets.

Simultaneously, investment demand was reportedly weaker, reflected in a sharp fall in January’s coin production at just 2.4 tonnes.

“This suggests that few retail investors in Turkey expect gold to see much upside from current levels. This is perhaps hardly surprising given that Turkish lira gold prices have rarely broken above this threshold,” MF said. “On the only other two occasions this has happened dollar gold traded at $1,900 and $1,770, in August 2011 and September 2012 respectively.”

“The lack of coin demand, combined with increased selling back of coins into the secondary market, saw Zynet (kilo) coin bags trade at a $30-50 per kilogram discount for 2015 dated coins,” it added.

There are expectations across Turkey that a further cut in interest rates is likely in the near term, which has pushed the lira above 2.5 against the dollar this for the first time in its history. The Turkish currency has lost around 80 percent of its value since 2013 after it was alleged that the country has been paying Iran in gold for gas and oil imports.

“This in turn should see Turkish lira gold prices remain elevated,” MF said. “Given the size of Turkey’s gold jewellery stocks, estimated at several thousand tonnes, the potential remains for domestic scrap supply to continue at a high level.”

“Although a portion of this is being exported, it also seems likely that Turkish banks will build up stocks of discounted 995 kilobars,” it added.

When gold priced in Turkish lira falls and investment and jewellery demand normalise, loco-Istanbul vaults will be emptied first before large imports resume, MF said

At an average of 181 tonnes per year over the past 10 years, Turkey is the fourth-largest consumer of gold, accounting for around six percent of global consumer demand, according to the World Gold Council. Still, total imports in 2014 sank to 130.9 tonnes, a drop of 57 percent from the 2013 total of 302.3 tonnes.

(Editing by Mark Shaw)

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Anglo FY loss widens, says tough trading conditions to endure

Otmane El Rhazi from The Bullion Desk.

Anglo’s full-year net loss widened to $2.51 billion from $961 million in 2013 after it wrote down the value of its iron ore and coal assets by $3.9 billion.

Revenues fell 7.7 percent to $27.07 billion while net debt increased to $12.9 billion at the end of the year – this is set to peak at $13.5-14 billion this year, CEO Mark Cutifani said on Friday.

“In the immediate term, I expect tough trading conditions to prevail during 2015, but we are determined to continue to build on our already very significant operational improvements, drive towards an effective and efficient organisation and culture, and to be unwavering in our capital discipline,” he said.

Stripping out the effect of the writedown, $3.5 billion of which was for its struggling Minas Rio iron ore project in Brazil, and other charges, full-year pretax profit fell 25 percent to $4.9 billion from the 2013 total, which the company attributed to “sharply lower commodity prices” – principally iron ore, the value of which fell by around half last year..

The decline was were partially offset by weaker producer country currencies, which had a positive impact of $1.3 billion to underlying earnings before interest and taxes (Ebit) as well as increased production and sales volumes, it said.

“Our diversified product portfolio provided us with a degree of insulation from the particularly sharp price falls for the bulk commodities of iron ore and coal, albeit in an environment where weaker commodity prices accounted for $2.4 billion of underlying Ebit reduction,” Cutifani said.

“Despite the headlines of economic uncertainty and geopolitical tensions, the underlying fundamentals of our business… remain attractive over the long term,” he added.

(Editing by Mark Shaw)

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Gold price gains from weaker dollar, Greek crisis eyed

Otmane El Rhazi from The Bullion Desk.

The gold price was seen climbing in early morning London trading on Friday, as a weaker dollar gave the metal the impetus to move upwards.

Spot gold was last seen at $1,228.70/1,229.50 per ounce, up $5.80 for the session, with the dollar down to 1.1427 against the euro.

Other metals also benefitted, silver was last seen up 10 cents at $16.92/16.97 per ounce, while platinum was up $6 at $1,202/1,207, as was palladium at $776/782, up $7.

“The precious metals continue to consolidate with bullion and palladium prices seemingly doing so in bull-flags, while platinum has had a more meaningful correction with all the gains from January wiped out. On balance, we remain friendly towards the precious metals,” FastMarkets analyst William Adams said.

The greenback’s losses stem from weaker US data in the previous session. US weekly unemployment claims came in larger than expected at 304,000, while retail sales at -0.8 percent and core result sales at -0.9 percent also disappointed.

Also buoying markets, risk-sentiment remains on whether or not Greece can reach an agreement with its creditors over the country’s bailout, although positivity is building.

Athens has agreed to talk to the IMF, the ECB and the European Commission on Friday about a compromise on the bailout deal which expires on February 28.

The European Central Bank (ECB) has also approved extra emergency finance for Greek banks – raising the cap on emergency funding for Greek banks by five billion euros.

The peace deal in Ukraine has however dampened gold’s credentials as a safe-haven, although buying in Asia has offset some of the losses.

“The New York sessions tone was certainly more subdued, with the headlines regarding the cease-fire between Russia and Ukraine weighing on the price and pushing back down towards $1,220,” MKS said in a note. “Once again though buying underneath this level from Asian names supported the market so this $1,215-20 area looks to be decent short term support.”

In data, German prelim GDP was positive at 0.7 percent, while the French number was expected at 0.1 percent. German WPI however, undershot at -0.4 percent but French prelim non-farm payrolls were positive at 0.0 percent.

Later, the EU will release flash GDP and trade balance, while the US has import prices, prelim UoM consumer sentiment and prelim UoM inflation expectations.

(Editing by Kathleen Retourne)

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Gold price gains on poor US data but optimism grows in Europe

Otmane El Rhazi from The Bullion Desk.

Gold made modest gains in afternoon London trading after forecast-missing US data offset an easing in risk-related buying.

The spot gold price was last at $1,223.80/1,224.60 per ounce, up $4.10 on the previous session. Likewise, silver was last up 11 cents at $16.89/16.94, platinum was $9 higher at $1,200/1,205 and palladium climbed $5.50 at $769/774.

“Gold is struggling as there’s more optimism in the air on Europe and Ukraine but it is getting some support from the weaker dollar, so it’s been a volatile but ultimately directionless today,” Matthew Turner of Macquarie told FastMarkets.

The metal was boosted after US weekly unemployment claims at 304,000 were larger than the forecast 282,000, while retail sales at -0.8 percent and core result sales at -0.9 percent also disappointed.

The dollar retreated to 1.1410 against the euro after earlier trading as high as 1.1303.

Gold peaked on the London open at $1,233.10 after the Bank of Japan (BoJ) quashed hopes of further monetary easing by labelling it counterproductive. Simultaneously, Sweden’s central bank, the Riksbank, cut interest rates by 10 basis points -0.1 percent to counteract the country’s spiralling deflation problem.

The rate will remain at -0.10 percent until inflation is close to the bank’s target of two percent, which is on the slate for late next year, the bank said. It will also buy government bonds amounting to 10 billion Kroner.

But gold almost immediately pared its gains after a ceasefire agreement was reached between political leaders from Ukraine and Russia.

The fragile agreement aims to pave way for ambitious measures that include constitutional reform in Ukraine and special status for rebel-held areas. This tentatively brings an end to months of fighting, which will dampen gold’s appeal as a source of safe-haven investment in the near term.

Risk-sentiment is also being hit by the growing possibility of Greece reaching an agreement with its creditors. The Greek government is presenting its alternative debt plan proposals to eurozone finance ministers, with reports suggesting that the country is looking to overhaul 30 percent of its bailout obligations and replace them with a 10-point plan of reforms.

In other data today, the German final CPI at -1.1 percent was lower than expected and down for a third consecutive month, eurozone industrial production came in flat and US business inventories were at 0.1 percent.

(Editing by Mark Shaw)

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Gold price ticks up but Ukraine ceasefire deal eases fears

Otmane El Rhazi from The Bullion Desk.

The gold price rose in early morning London trading, taking support from more uncertainty surrounding central bank policies, although gains were capped after political leaders agreed a ceasefire in Ukraine.

Spot gold was last $4.20 higher at $1,224.00/1,224.80 – it has traded in an intraday range of $15 so far. Silver followed gold slightly higher to $16.84/16.89, up five cents.

The metal peaking at $1,233.10 earlier in the session after the Bank of Japan (BoJ) quashed hopes of further monetary easing by labelling it counterproductive and Sweden’s Central Bank, the Riksbank, cut interest rates by 10 basis points -0.1 percent to counteract the country’s spiralling deflation problem.

The rate will remain at -0.10 percent until inflation is close to the bank’s target of two percent, which is on the slate for late next year, the bank said. It will also buy government bonds amounting to 10 billion Kroner.

“Gold ran up on reports that the BoJ had said extra stimulus was probably counter productive for now, which bolstered the yen to around 118.80 from around 120.30 in minutes. Then the Swedish rate cut added extra oomph,” FastMarkets analyst William Adams said.

“But gold then corrected on news that a ceasefire in Ukraine had been agreed. So the market is now having to adjust to both bullish and bearish news, while the Greece situation remains uncertain,” he added.

Despite earlier reports of difficulties prompted by unacceptable demands from Russian President Vladimir Putin, which Russian news agencies have said relates to the demilitarised zone between the two sides, political leaders have agreed a new ceasefire agreement in Ukraine, following an all-night meeting in Minsk.

This brings an end to months of fighting, which will dampen gold’s appeal as a source of safe-haven investment in the near term.

Elsewhere In Europe, an agreement has yet to be reached in Brussels over Greece’s debt crisis, although both sides have still hope to reach a compromise. According to unconfirmed reports overnight, German Finance Minister Martin Jager has said Germany may be willing to take into account some of Athens’ demands for changes to the emergency funding programme

In data today, the German final CPI at -1.1 percent was lower than expected and lower for the third consecutive month.

Still to come are industrial production numbers from the eurozone as well as US weekly unemployment claims, retail sales and business inventories.

In the other precious metals, platinum was up $4 at $1,193/1,203 per ounce, while palladium was $7 higher at $770/776.

(Editing by Mark Shaw)

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Gold price jumps on BOJ news and Swedish rate cut

Otmane El Rhazi from The Bullion Desk.

The gold price jumped in early Thursday sessions as it reacted to news from Japan and Sweden.

The spot gold price was last at $1,233.10 per ounce, a $13 increase on the previous day’s close.

“Gold has suddenly jumped from around $1,222 on what appears to be comments for the Bank of Japan that they see any extra stimulus as not being that effective,” said FastMarkets analyst William Adams. “Also, with the Swedish Central Bank cutting rates it suggests more widespread monetary easing

Sweden’s Riksbanken cuts interest rate by 10 basis points to -0.1 percent.

The other metals tracked gold higher, silver at $17.06 was up against the previous day’s $16.81. Platinum at $1,205 was up $11 and palladium increased $8 to $774.

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GOLD WEBCAST – Shanghai premiums tick higher, Mumbai into discount

Otmane El Rhazi from The Bullion Desk.

The premium in Shanghai was at $3 over the spot price, although some sources reported it at as high as $4. Chinese demand remains robust ahead of the Lunar New Year, which has continually underpinned gold prices this year. Still, volumes should drop precipitously during the one-week holiday that starts on February 19. In India, the discount continues to widen amid dwindling demand, reaching to $2-5 per ounce on one-kilo bars Elsewhere, the Hong Kong premium was down to $1, in Singapore, the premium edged up to $1.50, while the Dubai premium fell to parity as did Bangkok.

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Shanghai gold premium ticks higher, Mumbai discount widens

Otmane El Rhazi from The Bullion Desk.

Physical gold premiums in Shanghai have ticked higher while a surge in demand ahead of the Lunar New Year continues, although discounts remain in place in Mumbai while rumours circulate of a potential cut to import duties.

The premium in Shanghai was at $3 over the spot price, although some sources reported it at as high as $4 on the Shanghai Gold Exchange’s au9999 contract.

Chinese demand remains robust ahead of the Lunar New Year, which has continually underpinned gold prices this year. Still, volumes should drop precipitously during the one-week holiday that starts on February 19.

Withdrawals from the Shanghai Gold Exchange – a useful barometer for demand – surged to 255 tonnes in January, around 10 tonnes higher than the January 2014 total.

Withdrawals in February could be similar or even exceed that level, sources suggested, although year-on-year comparisons are complicated by the fact that Chinese New Year falls 19 days later in 2015 than it did last year.

Importers are carrying out business as usual following suggestions that some were encountering difficulties due to import quotas – China strictly controls how much gold its banks can import through a quota system.

In India, the discount continues to widen amid dwindling demand, reaching to $2-5 per ounce on one-kilo bars – importers are said to be keen to offload metal rather than hold onto it. Buyers are likely to be well stocked after the strong run of imports in the second half of last year.

Importers are said to be holding off on bringing in metal into the country as they await a prospective cut in import duties, which could be announced in the annual budget on February 28.

The Indian government may cut the import duty on gold by 2-4 percentage points later this month from its current level of 10 percent, sources told FastMarkets, although the cut in import duty could be to as low as two percent, according to some reports.

As little as 30 tonnes came into the country in January – most importers are well stocked following imports of around 29 tonnes in December and 152 tonnes in November.

Lower duties will help primarily to tackle the country’s smuggling problem, the source added, although the current 15 percent duty on jewellery will not be changed.

Domestic demand is unlikely to improve significantly until April or May, Metals Focus’ Chirag Sheth said – after the budget has been digested and on buying ahead of important religious festivals – although there may be a small uptick towards the end of March for stocking ahead of the end of the financial year.

Elsewhere, the Hong Kong premium was down to $1, which sources suggested could be the result of a build-up of material in the region.

In Singapore, the premium edged up to $1.50, while the Dubai premium fell to parity. The same happened in Bangkok, where sources said demand has dropped significantly.

(Editing by Mark Shaw)

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Gold price tightly bound, Ukraine and Greece summits eyed

Otmane El Rhazi from The Bullion Desk.

Gold eked out some gains in early-morning London trading but was largely rangebound while rumours circulate that the EU Commission will offer Greece a bridging deal.

The spot gold price at $1,237.10/1,2337.90 per ounce was up $4.30 on Tuesday’s close but has been confined to a tight intraday range of $6 so far. Silver followed gold higher, rising 17 cents at $17.02/17.07.

“The precious metals are on a back footing, which is surprising given the geopolitical situation. But judging by the CFTC data the longs are already extended and the short positions are relatively small so there might not be that much buying pressure around, with physical buyers now probably waiting to see where prices base out,” FastMarkets analyst William Adams said.

Three main factors driving gold are whether Greece can reach a deal with creditors over its bailout, the situation in Ukraine and the timing of the US Fed rate rise.

The European Council and Eurogroup ministers are likely to discuss at today’s meeting concessions demanded by new Greek Prime Minister Alexis Tsipras on its austerity programme.

The county’s 240-billion-euro bailout is due to expire on February 28, potentially leaving the country bankrupt and at risk of a eurozone exit unless it can reach a deal with creditors. Gold slipped earlier on speculation the EU Commission would table a six-month bridging deal that would allow the country more time to arrange a more long-term solution.

“We are expecting gold to continue to trade within the aforementioned range, however developments out of the Eurozone finance ministers meeting in Brussels today may see a break with risk to the top-side if the parties cannot find common ground,” MKS said in a note.

As well, political leaders are also due to meet in Minsk today with Ukrainian President Petro Poreshenko and Russian President Vladimir Putin to revive a collapsed ceasefire agreement signed back in September.

A revival of the peace plan and subsequent de-escalation of geopolitical tensions are likely to place downside pressure on gold in the near-term.

“If there are positive developments over Greece, or Ukraine then there could be further shake-outs. Conversely, if the geopolitical situations deteriorate, the pullbacks have made room for rebounds. For now, we expect more sabre-rattling over Greece, Ukraine and the timing of the US Fed rate hike, all of which is expected to keep the markets choppy,” FastMarkets’ Adams added.

There is no real data of significance due today, with only US crude oil inventories and the federal budget balance due.

“I would look for continued range trading in the absence of any fresh news,” Marex Spectron’s David Govett said.

The PGMs have so far been largely rangebound – platinum was last up $5 at $1,206/1,211 per ounce while palladium edged $1 higher to $766/772.

(Editing by Mark Shaw)

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Gold price tread higher on European worries

Otmane El Rhazi from The Bullion Desk.

The gold price traded higher this morning during the Asian trade, as investors look to the safe-haven metal amid risky developments from Europe.

Markets are focused on two key developments out of Greece and Ukraine which could provide trading directions for the precious metals complex.

Spot gold price was last up $3 to $1,236.70 per ounce, and silver followed higher as well by eight cents to $16.98.

“Gold is clearly conflicted between the positive USD sentiment pushing the bullion lower and the Greek Euro issues providing support,” said analysts from ANZ Bank.

The European Council and Eurogroup ministers are meeting today and likely to discuss the concessions demanded by new Greek Prime Minister Alexis Tsipras with regards to the austerity programme. The Greek Finance Minister said this week it will implement 70 percent of reforms in the current bailout agreement with the Troika while the G20 finance leaders are hoping to clinch a Greek aid deal fast to avoid a potentially chaotic and disorderly exit risk.

“Short term, the possibility of a Greek exit or debt default should provide support for the metal, as well as continued uncertainty in Ukraine,” said broker MKS Capital in a note.

Elsewhere in Europe, political leaders will meet at a summit in Minsk today with Ukrainian president Petro Poroshenko and Russian President Putin to revive a collapsed ceasefire agreement signed last September.

For the other precious metals, platinum price was up $3 to $1,209 per ounce although palladium bucked the general uptrend to trade lower at $768 compared to Tuesday’s $771.

Recent worries over a slowing Chinese economy could drag on demand for the PGMs, said HSBC Securities analyst James Steel.

“Concerns over a slowdown in China’s economy may have some negative influence on platinum and palladium. China is a significant consumer of palladium for auto production and while it absorbs less platinum in the auto sector than palladium, it is by far the largest platinum jewellery consumer in the world.”

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Gold back in consolidation mode over Chinese/Greek uncertainty

Otmane El Rhazi from The Bullion Desk.

Gold returned to consolidation on Tuesday morning after poor Chinese data dampened sentiment and uncertainty over the Greek political situation providing early impetus for safe-haven buying.

Spot gold was last at a price of $1,236.60/1,237.40 per ounce, down $1.50 on the previous session and short of what analysts pegged as the next psychological level at $1,251, the metal’s 200-day moving average. Silver followed gold lower – having earlier been above $17, it was last 16 cents lower at $16.80/16.85.

The metal had initially been under pressure from poor Chinese data this morning, which exacerbated fears about a continued economic slowdown in the country, the world’s largest consumer of gold.

Its CPI for January declined to 0.8 percent from 1.5 percent previously, the lowest since the end of 2009 and below market expectations for a reading of 1.0 percent. Its PPI also fell to -4.3 percent from -3.3 percent previously.

Over the weekend, Chinese exports slipped 3.3 percent in January while imports dropped a significant 19.9 percent – its total trade surplus at $60 billion was far higher than the expected $48.9 billion.

Meanwhile, Greece is on a collision course with the eurozone and the International Monetary Fund – Finance Minister Yanis Varoufakis has proposed that the country’s new government suspend or reverse 30 percent of the reforms in its 240-billion-euro bailout.

The country urgently requires 7 billion euros to repay maturing bonds and a further 1.9 billion euros in IMF loans or risk its cash reserves running out next month.

It is also seeking a second bailout from its lenders that would secure finance for four years, which would give Prime Minister Alexis Tsipras’ government time to negotiate a restructuring of long-term debts and overhaul its tax system.

While gold has fallen below the 1,100 in euro terms, it should rise above this level soon because the Greek uncertainty “is likely to contribute to solid demand for gold”, Commerzbank noted.

“Greece’s exit from Europe’s monetary union no longer appears quite so far-fetched,” it added.

In other data today, French industrial production at 1.5 percent exceeded expectations, as did the Italian number at 0.4 percent.

Still to come out of the US are the NFIB small business index, JOLTS job openings, wholesale inventories and IBD//TIPP economic optimism figures.

The PGMs are steady – platinum was last at $1,214/1,219 per ounce while palladium was down $1 in price at $775/781.

(Editing by Mark Shaw)

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