Market Nuggets: MKS: Gold Market Awaiting European Summit Thursday
(Kitco News) — One of the next key events for gold and other markets is a meeting of European officials Thursday to discuss the Greek debt crisis, as well as contagion risks to other European economies like Italy and Spain, says MKS Finance. “It seems though unlikely that any …
(Kitco News) — One of the next key events for gold and other markets is a meeting of European officials Thursday to discuss the Greek debt crisis, as well as contagion risks to other European economies like Italy and Spain, says MKS Finance. “It seems though unlikely that any real resolution can be found to this issue on this occasion,” MKS says. Analysts cite comments from German Chancellor Angela Merkel saying further steps will be necessary and not one spectacular event will solve the problem. MKS says it foresees increased demand for gold from risk-averse European investors, which may help the metal even if the dollar strengthens.
By Allen Sykora of Kitco News; asykora@kitco.com
Market Nuggets: RBC’s Gero: Gold Steadies As Buying Emerges On Sell-Off
(Kitco News) — Gold continues to find buyers after sell-offs, allowing the market to steady as it awaits resolution of debt-ceiling talks in the U.S. and euro-zone debt talks, says George Gero, vice president of RBC Capital Markets Global Futures. August gold fought its way back above $1,600 after a late-Tuesday correction, peaking at $1,600.80 an ounce. As of 1:38 p.m. EDT, the contract was $1.20 lower at $1,599.90 but well up from its $1,581.10 low. Gero notes open interest has been strong lately. The most-recent Comex gold open-interest data showed outstanding positions of 542,342, compared to 494,169 as of the start of the month.
By Allen Sykora of Kitco News; asykora@kitco.com
Market Nuggets: FuturePath’s Lesh: Comex Gold Softer On Signs Of Progress Toward U.S. Debt Deal
(Kitco News) — Comex gold is retaining a softer tone after falling in screen trading following the pit close Tuesday when President Obama cited progress in U.S. budget and debt-ceiling talks and supported a so-called “Gang of Six” plan in the Senate. Previously, gold ran up to a record high “on anticipation of the worst in terms of no debt deal in the U.S. and an unravelling of any debt deals in Europe,” says Frank Lesh, broker and analyst with FuturePath Trading. “We fell off pretty hard yesterday right as President Obama mentioned progress was being made and he thought there would be a solution.” This prompted some long liquidation, Lesh reports. As of 9:03 a.m. EDT, Comex August gold was $18.30, or 1.1%, lower at $1,582.80 an ounce. Lesh put initial support around $1,575. Below this, he listed old highs in the upper $1,550s that failed as resistance and turned into support.
By Allen Sykora of Kitco News; asykora@kitco.com
Market Nuggets: IAI: Primary Global Aluminum Output Falls In June But Up From Year Ago
(Kitco News) — Primary global aluminium production was 2.098 million metric tons in June, the International Aluminum Institute reports. This is down from 2.167 million tons in May but up from 1.998 million in June of 2010, the IAI says. In June, output fell in all regions. However, June daily global aluminum output of 69,900 tons was steady with May and up from 66,600 in June 2010.
By Allen Sykora of Kitco News; asykora@kitco.com
Market Nuggets: Barclays: Gold ETP Holdings Slip From Record High; Investment Still ‘Stable’
(Kitco News) — Holdings in gold-backed exchange-traded products eased from their record highs Tuesday, although demand overall appears “stable” for now, say analysts with Barclays Capital. As of Monday, global ETP holdings stood at a record 2,170.9 tons. Then they fell 2.5 metric tons Tuesday, the bank reports. “However, the bulk of interest remains relatively stable, and as we have highlighted previously, given we are in a seasonally weak period for demand, a decline in investor appetite is likely to be met with temporary steeper corrections,” Barclays says. “But the external environment remains supportive for gold, and barring short-terms corrections, we would expect prices to test fresh highs. As our asset-allocation analysts note, swift and targeted policy actions by European policymakers are needed but there is little sign it is immediately forthcoming and the upcoming 21 July EU heads of state summit appears now to be the key event to watch over the next few days.” Meanwhile, Barclays reports that silver ETP holdings rose by 193 tons Tuesday to their highest level since May 24.
By Allen Sykora of Kitco News; asykora@kitco.com
Market Nuggets: Gold, Silver Back Down, But Commerzbank ‘Optimistic On a Long-Term Horizon’
(Kitco News) — Gold and silver have pulled back from their recent peaks, but Commerzbank looks for further gains in the longer term. “Even if we assume further price rises for precious metals in the long term, a boom is not a one-way street and the optimism on gold and silver especially was excessive recently in our view,” Commerzbank says. “We are optimistic on a long-term horizon, since silver ETFs also enjoy increasing popularity, with the largest silver ETF, iShares Silver Trust, registering 191 tons of inflows yesterday alone. ETF holders often prove to be long-term-oriented investors.” Meanwhile, the SPDR Gold Trust reported outflows of 3.3 metric tons Tuesday, which the bank attributes to some uncertainty on sustaining $1,600-an-ounce gold. In the medium to long term, support for gold will come from production problems that curb the expansion of supply, in addition to persisting sovereign-debt issues, Commerzbank says. “In South Africa, for example, pay negotiations between the National Union of Mineworkers and gold mine operators have been interrupted without result. Despite a higher offer from the employers, the union is sticking to its pay demand of 14%.”
By Allen Sykora of Kitco News; asykora@kitco.com
Market Nuggets: CME Group: E-Micro Gold Averaged 2,200 Contracts Per Day Last Week
(Kitco News) — The average daily volume of CME Group’s still-young E-micro gold futures last week was around 2,200 contracts, says Patricia Cauley, director, metals products, with CME Group. The 10-ounce contract, launched last fall, allows small speculators to participate in the gold market with smaller margin requirements than would be required to trade the full 100-ounce Comex contract. The volume has picked up from the previously reported average of 374 contracts per day from the E-micro launch on Oct. 4 through Dec. 31. Cauley spoke late Tuesday during a Webcast by Lind-Waldock and CME Group on the impact of new Frank-Dodd Wall Street Reform legislation that banned over-the-counter metals trading for smaller retail investors as of last week.
By Allen Sykora of Kitco News; asykora@kitco.com
Market Nuggets: Lind-Waldock: New Rules May End Up Adding To CME Metals Liquidity
(Kitco News) — New Frank-Dodd Wall Street Reform legislation that banned over-the-counter metals trading by small speculators as of last week could mean increased liquidity for futures traded on exchanges, says Jim Comiskey, Lind Plus senior market strategist. He spoke late Tuesday during a Webcast by Lind-Waldock and CME Group on the impact of new rules for metals traders. The intent of the rules is to move unregulated trading to exchanges that are regulated, he explains. This could end up adding even liquidity and depth to futures trading on CME Group, he says. If so, this could mean even tighter spreads—allowing traders to enter and exit markets at the price points they intend—and thereby allow even more “orderly” markets, Comiskey explains.
By Allen Sykora of Kitco News; asykora@kitco.com
