Gold prices may peak in the first half next year driven by rising demand for luxury goods in India and China, according to Westpac Banking Corp.
Gold for immediate delivery may trade above $700 (Rs28,700) an ounce at the end of this year, Huw McKay, senior international economist at Sydney-based Westpac, said in an interview. Gold has averaged $659.34, so far this year after reaching a 26-year high of $730.40 last May.
Demand in India, the world’s largest buyer of the metal, rose by half in the first quarter from a year earlier, while demand in China gained 31%, the London-based World Gold Council said last week.
“China is a major emerging market, there is tremendous wealth building up among the middle class there, as it is in India,” said Gavin Wendt, senior resources analyst at Fat Prophets. Gold for immediate delivery has risen 4.1% so far this year and traded at an 11-month high of $694.25 on 23 April.
Westpac’s McKay will be speaking at a two-day gold conference being held on Monday and Tuesday in Perth by publisher Paydirt Media Pty. The conference is being attended by the world’s four largest gold producers, Barrick Gold Corp., Newmont Mining Corp., AngloGold Ashanti Ltd and Gold Fields Ltd.
The purchases, accounting for about 75% of gold demand, jumped 17% to 573 tonnes as consumers grew more comfortable with gold above $650 an ounce, the London-based Gold Council said. Demand from India rose to 211 tonnes and Chinese demand rose to 90 tonnes.
Monday, May 21, 2007
Gold rises but near-term sentiment bearish
LONDON (Reuters) - Gold edged higher in New York afternoon trade on Monday after hitting a two-month low last week, but traders said sentiment has turned bearish, pressuring the precious metal in the short term.
Gold fell as low as $657.30 an ounce before rising to $662.30/663.80 at 3:27 p.m. EDT (1927 GMT), up from $660.90/662.40 late on Friday, when prices fell as low as $655.50.
Most-active gold for June delivery on the COMEX division of the New York Mercantile Exchange settled up $1.80 at $663.80 an ounce, after trading between $657.50 and
$664.60.
"We have got a few important data points coming out late this week, especially in the euro-zone, and I can imagine that until then we are going to stay in a relatively quiet market," said Michael Widmer, director of metals research at Calyon Corporate and Investment Bank.
"Although I am still bullish for the full year, we are now moving out into the summer months and gold is generally not that strong during the period."
Spot gold on Thursday tumbled as low as $653.40, its weakest since March 20, but that fall stimulated physical interest and fund buying on Friday.
"The only reason why we see a bit of profit-taking here is on the back of the euro/dollar. The market is very quiet, but we expect it to find some support around $660 or slightly below," said Frederic Panizzutti, metals analyst at MKS Finance.
Gold fell as low as $657.30 an ounce before rising to $662.30/663.80 at 3:27 p.m. EDT (1927 GMT), up from $660.90/662.40 late on Friday, when prices fell as low as $655.50.
Most-active gold for June delivery on the COMEX division of the New York Mercantile Exchange settled up $1.80 at $663.80 an ounce, after trading between $657.50 and
$664.60.
"We have got a few important data points coming out late this week, especially in the euro-zone, and I can imagine that until then we are going to stay in a relatively quiet market," said Michael Widmer, director of metals research at Calyon Corporate and Investment Bank.
"Although I am still bullish for the full year, we are now moving out into the summer months and gold is generally not that strong during the period."
Spot gold on Thursday tumbled as low as $653.40, its weakest since March 20, but that fall stimulated physical interest and fund buying on Friday.
"The only reason why we see a bit of profit-taking here is on the back of the euro/dollar. The market is very quiet, but we expect it to find some support around $660 or slightly below," said Frederic Panizzutti, metals analyst at MKS Finance.
US gold futures turn to end up as dollar steadies
NEW YORK, May 21 (Reuters) - U.S. gold futures erased early losses to finish up slightly on Monday as the dollar rose at a steady rate, but a higher greenback and long liquidation could continue to put pressure on the precious metal, dealers said.
Most-active gold for June delivery on the COMEX division of the New York Mercantile Exchange settled up $1.80 at $663.80 an ounce, after trading between $657.50 and $664.60.
Neal Ryan, director of economic research at Blanchard & Co., said in a note that a steady dollar and some physical buying helped prices on Monday.
"Precious metals are making a strong reversal heading into the afternoon, underscoring that the sharp sell off last week was overdone," Ryan said. The dollar hit a five-week high against the euro and a three-month peak versus the yen on Monday. A higher dollar makes gold more expensive for holders of other currencies.
Most-active gold for June delivery on the COMEX division of the New York Mercantile Exchange settled up $1.80 at $663.80 an ounce, after trading between $657.50 and $664.60.
Neal Ryan, director of economic research at Blanchard & Co., said in a note that a steady dollar and some physical buying helped prices on Monday.
"Precious metals are making a strong reversal heading into the afternoon, underscoring that the sharp sell off last week was overdone," Ryan said. The dollar hit a five-week high against the euro and a three-month peak versus the yen on Monday. A higher dollar makes gold more expensive for holders of other currencies.
Stocks Mixed; S&P Briefly Passes Record
NEW YORK (AP) -- Wall Street reached another milestone during a muted session Monday, when the Standard & Poor's 500 index briefly passed its record close of 1,527.46 for the first time in more than seven years.
The S&P 500, considered by market professionals the best indicator of stock performance, surpassed the mark shortly after noon following news of a fresh spate of takeover deals. The broad market index has lagged the Dow Jones industrial average in recovering from Wall Street's prolonged slump earlier this decade.
The S&P 500 rose as high as 1,529.87, then edged back to 1,525.10, up 2.35, or 0.15 percent, as cautious investors locked in some profits after weeks of gains. The index's advance was driven by buying in non-technology sectors such as energy, materials, industrials and financials, S&P data showed. It is still well below its all-time trading high of 1,552.87 set on March 24, 2000, the same day the index reached its record close.
The S&P 500, considered by market professionals the best indicator of stock performance, surpassed the mark shortly after noon following news of a fresh spate of takeover deals. The broad market index has lagged the Dow Jones industrial average in recovering from Wall Street's prolonged slump earlier this decade.
The S&P 500 rose as high as 1,529.87, then edged back to 1,525.10, up 2.35, or 0.15 percent, as cautious investors locked in some profits after weeks of gains. The index's advance was driven by buying in non-technology sectors such as energy, materials, industrials and financials, S&P data showed. It is still well below its all-time trading high of 1,552.87 set on March 24, 2000, the same day the index reached its record close.
Banks cautious on dollar deals
Dubai: UAE banks and money exchange houses turned cautious on their dollar exposures yesterday due to the uncertainty surrounding the future of the dirham's peg to the dollar.
On Sunday Kuwait abandoned its currency's peg to the dollar in favour of an undisclosed basket of currencies resulting in sudden appreciation of the dinar.
Although the UAE Central Bank is yet to make a formal announcement, there has been strong speculation in banking circles on the future of the dirham-dollar peg.
Anticipating an appreciation of the dirham against the dollar, some banks in the country advised their branches yesterday not to commit any exchange rate involving large future transactions.
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"Please do not quote dollar-buying rates against the dirham for any large transaction amounting to the equivalent of Dh1 million and above today or make any commitments for future transactions," said a treasury advisory issued by a bank.
On Sunday Kuwait abandoned its currency's peg to the dollar in favour of an undisclosed basket of currencies resulting in sudden appreciation of the dinar.
Although the UAE Central Bank is yet to make a formal announcement, there has been strong speculation in banking circles on the future of the dirham-dollar peg.
Anticipating an appreciation of the dirham against the dollar, some banks in the country advised their branches yesterday not to commit any exchange rate involving large future transactions.
');
"Please do not quote dollar-buying rates against the dirham for any large transaction amounting to the equivalent of Dh1 million and above today or make any commitments for future transactions," said a treasury advisory issued by a bank.
Reliance and Tata lead rise in Indian shares
Mumbai: Indian shares rose yesterday to their highest close in more than three months, led by top private firm Reliance Industries and Tata Steel Ltd, but technical charts indicated resistance could limit the upside.
The 30-share benchmark BSE index ended up 0.81 per cent, or 115.19 points, at 14,418.60, but 14 of the components lost ground. It was the index's strongest close since February 9, the day it had hit a record high of 14,723.88.
The 50-share NSE index gained 1.1 per cent to a record close of 4,260.90. The index rose as high as 4,269.35, breaching a previous all-time high of 4,245.30 set on February 8.
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"On the domestic front there seem to be no worries as such, with the fourth-quarter results being more good than bad, inflation concerns subsiding and interest rates too looking like peaking out," CLSA analysts Sanjay Singh and Nikhil Raina said in a note.
"Apart from any negative surprises from the global front, we don't see too many concerns on the horizon and look forward to a sharp upmove this week."
The 30-share benchmark BSE index ended up 0.81 per cent, or 115.19 points, at 14,418.60, but 14 of the components lost ground. It was the index's strongest close since February 9, the day it had hit a record high of 14,723.88.
The 50-share NSE index gained 1.1 per cent to a record close of 4,260.90. The index rose as high as 4,269.35, breaching a previous all-time high of 4,245.30 set on February 8.
');
"On the domestic front there seem to be no worries as such, with the fourth-quarter results being more good than bad, inflation concerns subsiding and interest rates too looking like peaking out," CLSA analysts Sanjay Singh and Nikhil Raina said in a note.
"Apart from any negative surprises from the global front, we don't see too many concerns on the horizon and look forward to a sharp upmove this week."
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