SAN FRANCISCO (MarketWatch) -- Gold futures closed slightly lower Tuesday to tally a three-session loss of more than $2 an ounce as the U.S. dollar traded on a mixed note and crude price backed off a high of more than $75 a barrel.
"Minor price fatigue was visible in the market as bullion prices turned under the critical $665 mark on Tuesday," said Jon Nadler, analyst at Kitco Bullion Dealers.
Gold for August delivery fell 40 cents to close at $665.90 an ounce on the New York Mercantile Exchange. It spent much of the session trading higher.
— Peter Grandich, the Grandich letter
"Despite an onslaught of increased bearishness and some highly suspect capping trading patterns on the Comex, gold has managed to more than hold its own during its weakest seasonally favorable period," said Peter Grandich, editor of the Grandich Letter, in e-mailed comments.
"The big surprise in coming days could be a major break above key resistance in the $670 to $675 area," Grandich said.
On the currency markets, the British pound rallied to a new 26-year peak against the dollar. The greenback edged higher against the yen, but remained lower against major European currencies.
"The divergence between gold and the valuation of the dollar is reaching an extreme level that cannot be sustained," said Ned Schmidt, editor of the Value View Gold Report. "What that means is that the value of major currencies has appreciated, sending the dollar to a new low."
But "gold, which is really just a money, has not reflected that valuation," he said in e-mailed comments. He said a "major upward revaluation of gold is extremely likely."
Aside from the dollar, "the near-record oil prices and the increasing inflationary pressures which they are creating internationally," are just as important Mark O'Byrne, director at Gold & Silver Investments Ltd. said in a note to clients.
Tuesday, July 17, 2007
Canadian Dollar Trades Near 30-Year High on Inflation Concern
July 17 (Bloomberg) -- Canada's dollar traded near a 30- year high before a government report tomorrow that is forecast to show consumer inflation accelerated in June.
The currency has gained 11.7 percent this year as the Bank of Canada raised its benchmark interest rate after inflation exceeded the bank's target of 2 percent. Crude oil traded near the highest in more than 11 months, boosting the outlook for revenue from Canada's commodity exports.
``Inflation in Canada will remain above the Bank of Canada's target for the foreseeable future,'' said Marc Levesque, chief fixed-income and currency strategist at TD Securities Inc. in Toronto. That degree of inflation ``will certainly help the currency,'' which will also need higher commodity prices to extend its advance, he said. Commodities account for about half of Canada's exports.
The Canadian dollar rose to 95.84 U.S. cents at 4:10 p.m. in Toronto, from 95.80 U.S. cents yesterday, when it reached 96 cents, the highest since February 1977. One U.S. dollar buys C$1.0434.
Canadian consumer prices, excluding volatile items such as energy, probably rose to 2.6 percent in June from a year earlier, after a 2.2 percent gain the previous month, according to the median forecast in a Bloomberg News survey. Statistics Canada will release the report at 7 a.m. New York time tomorrow.
The currency has gained 11.7 percent this year as the Bank of Canada raised its benchmark interest rate after inflation exceeded the bank's target of 2 percent. Crude oil traded near the highest in more than 11 months, boosting the outlook for revenue from Canada's commodity exports.
``Inflation in Canada will remain above the Bank of Canada's target for the foreseeable future,'' said Marc Levesque, chief fixed-income and currency strategist at TD Securities Inc. in Toronto. That degree of inflation ``will certainly help the currency,'' which will also need higher commodity prices to extend its advance, he said. Commodities account for about half of Canada's exports.
The Canadian dollar rose to 95.84 U.S. cents at 4:10 p.m. in Toronto, from 95.80 U.S. cents yesterday, when it reached 96 cents, the highest since February 1977. One U.S. dollar buys C$1.0434.
Canadian consumer prices, excluding volatile items such as energy, probably rose to 2.6 percent in June from a year earlier, after a 2.2 percent gain the previous month, according to the median forecast in a Bloomberg News survey. Statistics Canada will release the report at 7 a.m. New York time tomorrow.
Gold and Silver Futures Decline on Outlook for U.S. Dollar
(Bloomberg) -- Gold and silver fell in New York on speculation the dollar will halt its slide against the euro, reducing the appeal of the precious metals as alternative investments.
Gold usually moves in the opposite direction of the dollar, which was little changed against the euro ahead of Federal Reserve Chairman Ben S. Bernanke's semi-annual report on the economy tomorrow. Gold and the euro both have gained 4.4 percent this year.
``We haven't seen more buyers jumping in on a larger scale,'' said Matt Zeman, metals trader at LaSalle Futures Group in Chicago. ``People are on the sidelines waiting for the near- term direction of the dollar. If the euro's rally stalls out, gold can go lower.''
Gold futures for August delivery fell 40 cents to $665.90 an ounce on the Comex division of the New York Mercantile Exchange, after earlier falling to as low as $663.
Silver futures for September delivery fell 4.7 cents, to $13.018 an ounce on the Comex. The price is up 0.6 percent this year.
The euro reached a record $1.3803 on July 17, the highest since its debut in 1999, on speculation interest rates in Europe will rise faster than the U.S.
Gold usually moves in the opposite direction of the dollar, which was little changed against the euro ahead of Federal Reserve Chairman Ben S. Bernanke's semi-annual report on the economy tomorrow. Gold and the euro both have gained 4.4 percent this year.
``We haven't seen more buyers jumping in on a larger scale,'' said Matt Zeman, metals trader at LaSalle Futures Group in Chicago. ``People are on the sidelines waiting for the near- term direction of the dollar. If the euro's rally stalls out, gold can go lower.''
Gold futures for August delivery fell 40 cents to $665.90 an ounce on the Comex division of the New York Mercantile Exchange, after earlier falling to as low as $663.
Silver futures for September delivery fell 4.7 cents, to $13.018 an ounce on the Comex. The price is up 0.6 percent this year.
The euro reached a record $1.3803 on July 17, the highest since its debut in 1999, on speculation interest rates in Europe will rise faster than the U.S.
Gold edges higher ahead of Federal Reserve minutes
LONDON (Reuters) - Gold ended just a touch higher in New York on Tuesday as dealers avoided big moves ahead of testimony by U.S. Federal Reserve Chairman Ben Bernanke later in the week.
The metal has struggled to breach key technical levels after hitting a five-week high last week, but might get support from firm oil prices and the dollar, which stayed near record lows against the euro, analysts said.
"The dollar is still the main driver of gold prices and there will be a set of important data points this week, which may influence the euro/dollar and hence gold," said Michael Widmer, research director at Calyon Corporate and Investment Bank.
"We expect gold to trade within a tight range as investors are unlikely to take big positions ahead of the minutes from the Fed meeting, Bernanke's testimony and U.S. inflation data," Widmer added.
Gold fell as low as $662.00 an ounce before recovering to $664.50/665.30 by 3:30 p.m. EDT (1930 GMT), against $664.00/664.80 in New York late on Monday.
Most-active gold for August delivery on the COMEX division of the New York Mercantile Exchange settled down 40 cents at $665.90 an ounce, dealing between $663.00 and $668.40.
The dollar was largely unchanged against the euro after the U.S. government reported the latest production price index and capital inflow data.
A weaker dollar makes gold cheaper for other currency holders and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
Nearby U.S. oil futuresended just below $74 a barrel on Tuesday after surging above $75 a barrel in early trades, which marked the loftiest level since last August
The metal has struggled to breach key technical levels after hitting a five-week high last week, but might get support from firm oil prices and the dollar, which stayed near record lows against the euro, analysts said.
"The dollar is still the main driver of gold prices and there will be a set of important data points this week, which may influence the euro/dollar and hence gold," said Michael Widmer, research director at Calyon Corporate and Investment Bank.
"We expect gold to trade within a tight range as investors are unlikely to take big positions ahead of the minutes from the Fed meeting, Bernanke's testimony and U.S. inflation data," Widmer added.
Gold fell as low as $662.00 an ounce before recovering to $664.50/665.30 by 3:30 p.m. EDT (1930 GMT), against $664.00/664.80 in New York late on Monday.
Most-active gold for August delivery on the COMEX division of the New York Mercantile Exchange settled down 40 cents at $665.90 an ounce, dealing between $663.00 and $668.40.
The dollar was largely unchanged against the euro after the U.S. government reported the latest production price index and capital inflow data.
A weaker dollar makes gold cheaper for other currency holders and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
Nearby U.S. oil futuresended just below $74 a barrel on Tuesday after surging above $75 a barrel in early trades, which marked the loftiest level since last August
India - Gold fall further as funds continue shifting to equities
NEW DELHI: Gold continued to surrender ground on the bullion market today on lack of buying support as investors continued to shift their funds into the surging stock markets, fearing a rise in the metal's value in the previous few trading sessions was overdone. Gold, which was bullish since the beginning of this month, fell by Rs 30 in today's trading in continuation to previous day's fall of Rs 10 as increased activity on the Bombay Stock Exchange's Sensex reduced the demand for the metal. Standard gold and ornaments were down by Rs 30 each at Rs 8,850 and Rs 8,700 per ten gram respectively. Sovereign remained unchanged at Rs 7,625 per piece of eight gram. Buying in the metal was also limited due to off-marriage and festival seasons, discounting reports that prices of the metal might go higher during the week. A recent survey report in London revealed that gold prices might pick-up in the current week. Thirty of 37 traders, investors and analysts from Sydney to Chicago advised buying gold, which rose 1.9 per cent last week to $ 667.30 an ounce on the New York Mercantile Exchange. Market players said investors shifted their funds to stock markets expecting quick returns, amid reports of decline in gold in overseas markets, which normally set prices here. Trading in silver was negligible as the metal for ready delivery fell by Rs 150 at Rs 17,650 per kilo and weekly-based delivery dropped by Rs 160 at Rs 17,760 per kilo. Silver coins also lost Rs 100 at Rs 23,400 for buying and Rs 23,500 for selling of 100 pieces.
Iran to sell gas to Europe via Nabucco
Iran to sell gas to Europe via Nabucco18 Jul, 2007, 0333 hrs IST, REUTERS
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ANKARA: Iran will sell its gas to partner countries of the Nabucco gas pipeline, a project to pump Caspian gas to Europe via Turkey, Bulgaria, Hungary and Austria, an Iranian official told a news conference in Turkey on Tuesday. The official also said a deal with Turkey to sell gas and develop Iran’s South Pars gas fields will not affect an existing agreement made with Austria’s OMV. “We will sell our gas through Turkey to Nabucco partner countries, including Austria,” said Iranian economic relations under-secretary Ahmed Noorani. The Nabucco pipeline, which is estimated to cost e 4.6 billion, is projected to carry 31 billion cubic metres of Caspian and Middle East gas to European markets. Recent developments between Gazprom and Eni to build a 30 bcm natural gas pipeline under the Black Sea and on to European consumers have sped up the Iranian-Turkish talks. Late last week Turkish energy minister Hilmi Guler signed a memorandum of understanding with Iranian officials for the Turkish Petroleum Corporation (TPAO) to produce 20 billion cubic metres of natural gas in three phases in Iran’s South Pars gas field. The plans also include an agreement to use Iran as a transit country for Turkmen natural gas. OMV is in talks with Tehran to develop an area of the same gas field, build a liquefied natural gas terminal there and export the fuel. Noorani also dismissed objections US officials expressed on Monday to Iran’s plans, saying that the country has to review its own policies in the region. “The US thinks that it can make other countries in the region follow its lead,” he said.
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ANKARA: Iran will sell its gas to partner countries of the Nabucco gas pipeline, a project to pump Caspian gas to Europe via Turkey, Bulgaria, Hungary and Austria, an Iranian official told a news conference in Turkey on Tuesday. The official also said a deal with Turkey to sell gas and develop Iran’s South Pars gas fields will not affect an existing agreement made with Austria’s OMV. “We will sell our gas through Turkey to Nabucco partner countries, including Austria,” said Iranian economic relations under-secretary Ahmed Noorani. The Nabucco pipeline, which is estimated to cost e 4.6 billion, is projected to carry 31 billion cubic metres of Caspian and Middle East gas to European markets. Recent developments between Gazprom and Eni to build a 30 bcm natural gas pipeline under the Black Sea and on to European consumers have sped up the Iranian-Turkish talks. Late last week Turkish energy minister Hilmi Guler signed a memorandum of understanding with Iranian officials for the Turkish Petroleum Corporation (TPAO) to produce 20 billion cubic metres of natural gas in three phases in Iran’s South Pars gas field. The plans also include an agreement to use Iran as a transit country for Turkmen natural gas. OMV is in talks with Tehran to develop an area of the same gas field, build a liquefied natural gas terminal there and export the fuel. Noorani also dismissed objections US officials expressed on Monday to Iran’s plans, saying that the country has to review its own policies in the region. “The US thinks that it can make other countries in the region follow its lead,” he said.
Dollar hits new 26-year low against pound
Dubai: The dollar hit a new 26-year low against sterling yesterday as the euro hovered around an all-time high, mounting further pressure on GCC central banks to consider revaluation of their currencies as a policy option.
"Though the dollar's weakening has been an ongoing story for the past two years, the persistent weakness of the greenback against sterling and the euro during the past few weeks will once again stress the need for a rethink in the exchange rate policies in the Gulf," said HSBC economist Simon Williams.
Sterling soared against the dollar yesterday on inflation concerns. The pound hit $2.0438, as traders bought sterling heavily after June inflation data that pointed towards higher British interest rates. The euro rose to $1.3790 in early European trading, flirting with its all-time high of $1.38 it touched last Friday.
"Though the dollar's weakening has been an ongoing story for the past two years, the persistent weakness of the greenback against sterling and the euro during the past few weeks will once again stress the need for a rethink in the exchange rate policies in the Gulf," said HSBC economist Simon Williams.
Sterling soared against the dollar yesterday on inflation concerns. The pound hit $2.0438, as traders bought sterling heavily after June inflation data that pointed towards higher British interest rates. The euro rose to $1.3790 in early European trading, flirting with its all-time high of $1.38 it touched last Friday.
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