What Are the Potential Outcomes for Gold Price in 2012?

Following my recent article on the potential outcomes for the price of silver in 2012, this article will complete the picture with a short overview of the possible outcomes for gold price. This analysis should give you a broad perspective as to the potential direction gold price might head by the end of 2012.

During the first half of 2011 gold price climbed up very slowly and by the end of June it has only risen by nearly 5%. During the second part of the year gold price experienced much more volatility as I have explained in the past. Gold finished 2011 with a 10% gain.

So what could we expect gold price to reach by the end of 2012?

I think, there are four major scenarios to consider:

• Gold price ranging between $1,700 and $1,900 by the end of 2012 (probability of this option – high): This scenario, in my opinion, is most likely. Even though the current price of gold is in this range (as of February 21^st, gold price reached $1,758), bear in mind this range reflects a yearly increase of 9%-21% compared with the level of gold from the end of 2011. Much like in 2011, many will probably continue to anticipate the depreciation of USD due to the quantitative easing plans, low interest rates, and low return on U.S investments such as treasuries and stocks. These conditions will also keep gold price rising during the year. In fact, during 2011 the US dollar appreciated against the Euro by roughly 3%, depreciated against the Yen by 5% and remained nearly flat against the Aussie dollar. If 2012 will be a similar year for the US dollar, then gold won’t benefit from it. Furthermore, since there are smaller chances of another quantitative easing plan by the Federal Reserve, and the U.S stock markets and US economy are showing some signs of recover, then gold price is likely to rise by a similar rate as in 2011. Finally, one should always consider the possibility that CME will intervene in the metals markets by raising margins on gold if the metals market will start to hear up;

•  Gold price ranging between $1,900 and $2,000 by the end of 2012 (probability of this option – low): This scenario is possible even though is less likely. This means gold price will rise by 21-28% by the end of year. Silver has performed exceptionally well in 2010 as it rose by 84%. If the progress of U.S. economy will slowdown in terms of GDP and labor force. Furthermore, if the Fed will reintroduce another quantitative easing plan, then this scenario will become more plausible;

• Gold price ranging between $1,500 and $1,600 by the end of 2012 (probability of this option – low): This scenario, in my opinion is less likely. The economic slowdown in China and India could adversely affect the demand for gold of these leading countries in gold import; this in turn could also adversely affect gold prices. If the U.S. economy will show unexpected growth this scenario could become more viable. The recent pledge of the Federal Reserve to keep its interest rate low until the end of 2014 and the economic perils the U.S and Europe is facing in regards to their budget deficits and debt will help keep the price of gold high during 2012;

•  Gold price ranging between $2,100 and $2,200 by the end of 2012 (probability of this option – very low): This scenario is least likely among other scenarios; it doesn’t mean it’s impossible for gold to reach this range during the year, it’s just that in such a case the price won’t stay there for long for the reasons listed in scenario 1.  If there will be another quantitative easing plan, the U.S and Euro Zone will head towards a recession and the CME won’t intervene by raising margins of metals trading then this possibility will become more likely.

This analysis, much like the silver yearly analysis,  should be taken with a grain of salt as I have only voiced my opinion and tried to give you some perspective as to what should we expect gold price to reach during 2012.

 

For further reading:

• What Are the Potential Outcomes for Silver Price in 2012?
• Where are Gold and Silver Headed in 2012?
• Gold and Silver Yearly Video Report for 2011-2012
• Why is Gold More Expensive than Platinum?

Tags: Gold price forecast, Gold prices outlook

Source: http://www.tradingnrg.com/gold-price-forecast-for-2012-potential-outcomes/?utm_source=rss&utm_medium=rss&utm_campaign=gold-price-forecast-for-2012-potential-outcomes

Gold Prices Spike on Greek Rescue Plan

NEW YORK (TheStreet ) — Gold prices were rising Tuesday after approval of second bailout package for Greece propped up the euro.

Gold for April delivery was rising $30.20 at $1,756.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,757.60 and as low as $1,727 an ounce while the spot price was adding $21.20, according to Kitco’s gold index.

Silver prices were rising 87 cents to $34.095 an ounce while the U.S. dollar index was down 0.24% at $78.948.

Jon Nadler, senior metals analyst at Kitco Metals, noted that market action has hinged on Greek headlines for weeks, with equities and the euro rising on positive news and falling after missed deadlines. With the deal now in place, Nadler believes investors can return their focus to the bigger — and more problematic — picture.

“Now that the red wax seal is drying on the 130 billion euro package and the many strings that are attached to it, the markets can focus on the remaining troublesome items — banking sector problems and Greece’s own inability to avoid coming back to knock on the EU’s door for more assistance, at a later date,” said Nadler. “There appears to be little doubt that in order for the country to bring debt down to 120% of GDP such further help will be necessary. As things stand right now, if Greece is lucky, that ratio might get down to 129% by — 2020 or so.”

Gold prices were also getting a boost from China’s decision to lower its reserve requirements for banks. The People’s Bank of China announced over the weekend that it was knocking down it’s reserve-requirement ratio by 0.5%, a move aimed at boost lending. Some are interpreting this as a sign that China’s economy could be slowing.

Gold mining stocks were riding gold prices higher Tuesday. Kinross Gold(KGC) was gaining 3.5% at $11.34 while Randgold Resources(GOLD) was 1.4% higher at $112.62.

Other gold stocks, Agnico-Eagle(AEM) and Eldorado Gold(EGO) were trading higher at $36.55 and $14.08, respectively.

– Written by Ross Tucker in New York.

To contact the writer of this article, click here: Ross Tucker.

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Source: http://feeds.thestreet.com/~r/tsc/feeds/rss/latest-stories/~3/ztU1ThCEGV4/gold-prices-spike-on-greek-rescue-plan.html

Who’s Buying Gold in China?

The People’s Bank is Buying Gold! Or Beijing’s SAFE agency perhaps. Or maybe private wholesalers…or investors?

SPOT THE DIFFERENCE, says Adrian Ash at BullionVault. There’s a gold-buying mystery in China.

Gold imports to China in the last 3 months of 2011 totaled 227 tonnes or more. China’s gold mining output added a further 100 tonnes of supply. Yet on the best available data, end-user demand in the Middle Kingdom only reached 191 tonnes.

You can see the gap – some 136 tonnes or more. Who’s buying the difference? The Financial Times thinks it knows.

“China central bank in gold-buying push,” announced the FT in a headline last week. “It does appear the People’s Bank of China has been a significant buyer,” said a Reuters columnist, repeating what he’d just read in the Pink ‘Un.

So fill yer boots, Western investors! Beijing has got $3 trillion in foreign currency reserves, and at last it is out Buying Gold in the open market!

Or at least, it “could be”, as two market-leading analysts were quoted below the headline. The “apparent surplus in the domestic market” might have something to do with central-bank buying, said Philip Klapwijk, head of Thomson-Reuters GFMS, the source of those end-user demand data. “There is absolutely a discrepancy in the…figures,” the FT also quoted Marcus Grubb, investment director at market-development group the World Gold Council.

“The obvious inference is that the central bank is buying.”

But jumping from that inference to a “gold-buying push”…?

• The import, mining and demand data came from 3 different sources, the third of which (Thomson-Reuters GFMS) is unofficial, and aims to cover end-user sales in the world’s second-largest gold market and its most populous nation. Not easy;
• The demand data are highly likely to be revised – upwards – by GFMS, who supply the World Gold Council’s quarterly Gold Demand Trends, from where the FT took the end-use numbers. Currently the best data available, GFMS’s numbers have certainly been revised –  upwards – quarter-on-quarter over recent years. But even on first release, China’s jewelry and investment demand shows annual average compound growth of 36% since 2001. Try keeping track of that in real time;
• Sure, a revision to end-demand of 136 tonnes will not happen. But would a 75% hike be any less likely than the People’s Bank of China growing its stated reserves (still officially 1054 tonnes, as they have been since 2009) by more than 13% inside 3 months that saw the Gold Price average $1684 per ounce, its highest level in history outside the $1702 record of July-Oct. last year?

Our guess? We doubt that China’s central bank bought 1 ounce in every 8 sold worldwide during the last 3 months of 2011. We doubt it even bought a “significant” chunk of the missing 136 missing tonnes either. Not only because of that near-record high price. Nor simply because – having tried so hard to hide its gold-market bids to date – Beijing would surely work harder to cover its tracks today. No, we think Beijing’s policymakers were NOT the “mystery” buyer because, starting this month, they went and made importing gold just a little bit harder for China’s bullion brokers.

Importers now need to seek permission from both the People’s Bank and its State Administration of Foreign Exchange (SAFE) – the very agency through which it bought gold between 2003 and 2009, when it last updated the world on its official holdings. So if it were pushing to Buy Gold – and already pushing to pay very nearly the highest prices in history – why would Beijing also want to temper supply?

“In the medium term we do know the Chinese central bank and other Asian central banks with large foreign exchange reserves have been increasing their holdings of gold,” as Marcus Grubb of the World Gold Council told the Financial Times. Plugging some of last quarter’s gap “is consistent with that.” But plugging a “significant” portion, let alone the whole 136 tonnes as the FT‘s headline is at pains to imply?

Both the WGC’s Grubb and GFMS’s Klapwijk in fact added that other government agencies, such as sovereign wealth funds, or private-sector players like bullion banks, or investment institutions, or simple stock-pilers would be likely candidates, too. Supply-chain players would certainly make sense as prime suspects.

New Year 2011 saw a scramble to secure supplies push local prices sharply higher. Well ahead of last month’s 2012 Lunar New Year holidays, the Hong Kong premium tripled to reach the same level, rising $3 per ounce above the world’s benchmark Gold Price (ie, the quote from London banks). Gold imports to China through Hong Kong then peaked in November – right in the middle of the “mystery” buying. They fell hard in December, and stayed quiet (according to anecdotal reports) as the festivities drew closer in January.

So, stockpiling in readiness for China’s busiest single week of gold demand would make a very obvious inference. It could easily swallow 136 tonnes, too. Stock-piling is common in base metals and oil. Standard Bank’s commodities team now reckon silver stockpiles in China are equal to 15 months of fabrication demand. And if Beijing were really on the bid for imported metal, then why, immediately after January’s Chinese New Year celebrations – the single biggest event on China’s gold buying calendar – did it set China’s gold importers a new hurdle?

No doubt China is Buying Gold direct from its miners. South Africa did the same when it was No.1 for annual production, and it’s plain from Russia’s steady accumulation that it’s using the same route, as well. Such metal is then lacking for retail consumption, so to ensure lots of supply for what proved another strong Chinese New Year, importers booked early and often. Trouble is, gold imports through Hong Kong alone more than trebled in 2011, outweighing the country’s domestic mine supply. So then, immediately after New Year – and only two weeks after trade-deficit hit India doubled its gold and silver import duties – the authorities moved to temper the flow of metal.

China’s private gold buyers have needed no help from over-excitable headlines to date. But they have needed Beijing’s blessing – and its policy on gold now looks conflicted, to say the least. Happy to deregulate since 2002, it’s allowed private sales of gold to treble as a proportion of China’s fast-growing GDP, reaching more than 0.6% in full-year 2011 when judged off the GFMS data. That private accumulation has enabled China to diversify its national holdings – “national” meaning just what it says in a state which remains very much controlled if no longer quite communis today. No doubt the People’s Bank has also bought a little more gold for its own stash too, albeit adding a lot less than the 1,400 tonnes which GFMS reckon has gone into private-sector possession in the last two years alone.

Now China’s massive trade surplus is fast shrinking, however. The rate of foreign-currency hoarding is slowing right alongside, but its gold imports just overtook domestic mine output for the year as a whole, let alone the fourth quarter. Building the central bank’s gold reserves would only worsen that gap. Making a “push” to Buy Gold – and at near-record prices – looks a long way from certain.

Looking to Buy Gold for your own private reserves today? Make it simple, secure and cost-effective like nowhere else using world No.1 online, BullionVault…

Source: http://goldnews.bullionvault.com/gold_china_022120127

Gold and Silver Prices Weekly Outlook for February 20-24

Here is a short recap of the developments in gold and silver prices during the week of February 13^th to February 17^th; this overview includes a short description of the changes in the markets that were related to the recent changes in precious metals prices; in the analysis in I use charts and I highlight the main news items that may have influenced gold and silver traders during the week.

The announcement of Moody’s to downgrade the credit rating of several EU countries didn’t seem to affect many traders. Furthermore, the decline of the EU GDP by 0.3% during the fourth quarter of 2011 was also something that didn’t seem affect traders; during last week there were several U.S. reports that came out and showed a slight improvement in the economic situation including an increase in the Philly Fed index, housing starts and U.S. retail sales. Nevertheless, these reports didn’t seem to have much of an effect on precious metals prices.

The Euro slightly declined against the USD, while other “risk” currencies such as the Australian dollar appreciated against the U.S. dollar during the week. This shift in the direction of the U.S. dollar may have also been responsible for the changes in the direction of gold and silver prices during last week.

The video link above presents a broad outlook for the major news and events that might affect the direction of gold and silver prices during the week of February 20^th to February 24^th; the video includes reviewing the main reports, events, decisions and news items to be published during the upcoming week. Some of these financial reports include: U.S. new home sales monthly update, China’s manufacturing PMI for February (flash report) by HSBC, Governor Stevens of the Reserve Bank of Australia will testify, a G20 summit, the minutes of the recent meeting of the monetary policy committee of Bank of England, U.S. existing home sales monthly report and U.S. jobless claims weekly update (just to name a few).

For further reading:

• Gold and Silver Prices Outlook for February 2012
• Weekly Outlook for 20-24 February
• Gold Silver Prices | Weekly Recap 13-17 February
• What Are the Potential Outcomes for Silver Price in 2012?

Tags: Gold price outlook, silver price forecast February 2012

Source: http://www.tradingnrg.com/gold-price-and-silver-price-weekly-forecast-for-february-20-24/?utm_source=rss&utm_medium=rss&utm_campaign=gold-price-and-silver-price-weekly-forecast-for-february-20-24

Gold Prices Settle Lower on Greek Bailout Uncertainties (Update 1)

NEW YORK (TheStreet ) — Gold prices settled marginally lower Friday as investors showed caution ahead of a holiday weekend and the fate of a second Greek bailout remained uncertain.

Gold for April delivery ended down $2.40 to $1,725.90 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,737.50 and as low as $1,718.60 an ounce, while the spot price was down $4.60, according to Kitco’s gold index.

Silver prices settled 15 cents lower at $33.216 an ounce while the U.S. dollar index was essentially flat at $79.318.

Investors are keeping a close eye on Greece, with many growing increasingly confident that the country will be able to secure a new bailout package before a meeting of eurozone finance ministers on Monday, averting a disorderly default that could rock the financial markets.

“Early buyers met sellers as the day wore on,” said George Gero, senior vice president with RBC Wealth Management. “It’s a long weekend upcoming, and traders are reluctant to risk large capital for new positions in case, once again, eurozone headlines disappoint investors.”

Overhanging the gold market was a mixed global demand picture. In the World Gold Council’s 2011 Gold Demand Trends report, total gold demand was up just 0.4% to 4,067.1 tons. Indian demand suffered as the rupee was pummeled by the dollar. Jewelry demand was down 44% in the fourth quarter, 14% for the entire year. Bar and coin demand was up just 5% in 2011. The country still consumed 933.4 tons of gold in 2011 and coupled with China generated 55% of global jewelry demand and 49% of global demand.

“There are concerns that Indian gold demand might run into a bit of trouble this year, not only on account of continuing high prices, but owing to…the calendar,” said John Nadler, senior metals analyst with Kitco Metals. “Simply put, there are fewer so-called ‘auspicious’ days in the 2012 Hindu calendar on which to go out and scoop up some yellow metal.’

China is making up for slowing Indian demand. The country consumed 769.8 tons in 2011. Jewelry demand was up 13% and investment demand grew to more than 250 tons. But the worry is if Indian demand slows, Chinese demand won’t add the extra boost it has been to the gold price.

“Growth in Chinese demand is more than picking up the slack in Indian demand,” argues Marcus Grubb managing director at the World Gold Council. China’s demand grew 20% in 2011 and Grubb says it will grow by another 20% this year while Indian demand will most likely be flat or down. “What you have seen with China is it has come from a market that didn’t really matter to now importing over 400 tons a year.” Grubb expects the country to consume 930 tons of gold this year, matching India’s demand.

While China has some pressure to keep buying gold, investors — those on the futures market and those who buy the ETFs – have their work cut out for them as well. The OTC demand fell for the first time since 2008, down 7%, and ETF inflows were only 154 tons, less than half of 2010. “It was a very checkered year of selling gold by institutions and professional investors in the latter part of the year,” says Grubb. “The growth rate in ETFs has definitely flattened out.” Grubb says for the ETF market to grow there needs to be a deeper and broader ownership of gold. Currently not even 1% of monetary assets are invested in gold.

Mine supply was up 4% on the year, but total supply was down 8% and central banks bought almost 440 tons of gold, the highest figure since 1964.

Gold mining stocks were mostly lower Friday. Barrick Gold(ABX) was falling 2.3% at $47.04. Barrick reported fourth quarter earnings on Thursday of $1.17 a share, which was below expectations, on revenue of $3.79 billion which beat estimates. The biggest gold miner in the world produced 1.81 million ounces at cash costs of $505 an ounce and expects to produce between 7.3 and 7.8 million ounces in 2012 for $520-$560 an ounce. Barrick is trying to grow production 20% in five years from 7.5 million to 9 million ounces.

Other gold stocks, Goldcorp(GG) was falling 0.74% to $47.07. Randgold Resources(GOLD) was 0.2% lower at $111.08. and Eldorado Gold(EGO) was down 0.7% at $13.52.

– Written by Ross Tucker in New York.

To contact the writer of this article, click here: Ross Tucker.

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Source: http://feeds.thestreet.com/~r/tsc/feeds/rss/latest-stories/~3/wMg4Fn6D21Q/gold-prices-waver-as-greece-nears-bailout-deal.html

Gold Prices Eke Out Gain on Hopes of Greek Bond Swap

NEW YORK (TheStreet ) — Gold prices reversed directions Thursday and eked out a gain on a Reuters report that a Greek bond swap deal could be completed over the weekend.

Gold for April delivery closed up 30 cents at $1,728.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,731.10 and as low as $1,706.70 an ounce, while the spot price was up $1, according to Kitco’s gold index.

Silver prices lost 3 cents at $33.37 an ounce while the U.S. dollar index was shedding 0.49% at $79.32.

The euro gained traction against the dollar, which was helping support gold on a report that a Greek bond swap deal could be launched over the weekend. Some of Greece pairing down its debt comes in the form of a bond swap where holders trade in current bonds for new longer dated ones at a lower interest rate.

Gold had been getting hammered as the threat of Moody’s downgrading 17 global and 114 European financial institutions propped up the dollar as the safe haven of choice. Gold’s reversal then also triggered any short covering — where traders buy back previously sold positions. “No one really wants to be short in front of differing headlines minute to minute from Greece,” says George Gero, senior vice president at RBC Capital Markets.

“Right now it’s that juxtaposition between European sovereign situation, particularly around Greece,” says Will Rhind, head of U.S. operations for ETF Securities, “and that has an effect on the currencies which effects gold.”

Greece is still in limbo waiting to receive approval for its second bailout. Eurozone finance ministers are reportedly meeting on Monday to discuss the deal. Rhind admits that gold needs some kind of catalyst and is somewhat on the sidelines right now. However, Rhind believes that the trend of low interest rates and worries over inflation will continue to support the metal. “If we get into a situation where global growth slows again like we saw a the beginning of last year we may get some intervention certainly here in the U.S. from the Fed in the form of quantitative easing round three.”

Whether the Fed will launch another round of quantitative easing is a hot debate, and not made easier with the latest FOMC minutes. A few members said that low inflation and high unemployment could warrant more asset purchases while others said it might only be necessary if the economy lost momentum. Consistent better than expected U.S. data and a falling unemployment rate have raised the speculation that the Fed wouldn’t need to pump more money into the system. Today jobless claims fell near a four-year low of 348,000, but Greece is the wild card and the Fed seems committed to fighting of any contagion. The uncertainty, however, was playing out in the currency market and gold as the dollar moved steadily higher.

Gold also was digesting a mixed global demand picture. In the World Gold Council’s 2011 Gold Demand Trends report, total gold demand was up just 0.4% to 4,067.1 tons. Indian demand suffered as the rupee was pummeled by the dollar. Jewelry demand was down 44% in the fourth quarter, 14% for the entire year. Bar and coin demand was up just 5% in 2011. The country still consumed 933.4 tons of gold in 2011 and coupled with China generated 55% of global jewelry demand and 49% of global demand.

For now China is making up for slowing Indian demand. The country consumed 769.8 tons in 2011. Jewelry demand was up 13% and investment demand grew to more than 250 tons. But the worry is if Indian demand slows, Chinese demand won’t add the extra boost it has been to the gold price.

“Growth in Chinese demand is more than picking up the slack in Indian demand,” argues Marcus Grubb managing director at the World Gold Council. China’s demand grew 20% in 2011 and Grubb says it will grow by another 20% this year while Indian demand will most likely be flat or down. “What you have seen with China is it has come from a market that didn’t really matter to now importing over 400 tons a year.” Grubb expects the country to consume 930 tons of gold this year matching India’s demand.

China deregulated its gold market 10 years ago and has some catch up to do with India. Grubb thinks it would take the country 5 years. “The stock of gold held by Indian households is more than twice the stock in China at 18,000 tons vs. 9,000 tons or 10,000 tons.”

While China has some pressure to keep buying gold, investors – those on the futures market and those who buy the ETFs – have their work cut out for them as well. The OTC demand fell for the first time since 2008 down 7% and ETF inflows were only 154 tons, less than half of 2010. “It was a very checkered year of selling gold by institutions and professional investors in the latter part of the year,” says Grubb. “The growth rate in ETFs has definitely flattened out.” Grubb says for the ETF market to grow there needs to be a deeper and broader ownership of gold. Currently not even 1% of monetary assets are invested in gold.

Mine supply was up 4% on the year, but total supply was down 8% and central banks bought almost 440 tons of gold, the highest figure since 1964.

Gold mining stocks were higher Thursday. Barrick Gold(ABX) was up almost 2% at $48.36 while Randgold Resources(GOLD) was 0.37% higher at $111.77. Barrick reported fourth quarter earnings this morning of $1.17 a share, which was below expectations, on revenue of $3.79 billion which beat estimates. The biggest gold miner in the world produced 1.81 million ounces at cash costs of $505 an ounce and expects to produce between 7.3 and 7.8 million ounces in 2012 for $520-$560 an ounce. Barrick is trying to grow production 20% in five years from 7.5 million to 9 million ounces.

Other gold stocks, Goldcorp(GG) was soaring 5% to $47.57 and Eldorado Gold (EGO) was rising 2.40% to $13.68. Goldcorp also reported earnings making 66 cents a share on revenue of $1.52 billion, both better than expected. The company produced 687,900 ounces in the fourth quarter at cash costs of $529 an ounce. Goldcorp reiterated its 2012 guidance to grow production by 4% to 2.6 million ounces with cash costs of $550-$600 an ounce. The company hopes to grow production 70% in 5 years to 4.2 million ounces.

–Written by Alix Steel in New York.

To contact the writer of this article, click here: Alix Steel.

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Source: http://feeds.thestreet.com/~r/tsc/feeds/rss/latest-stories/~3/BHcYuEe8fBQ/gold-prices-sag-as-bank-downgrade-threat-boosts-dollar.html

China’s Gold Imports

Private gold demand has suited Beijing’s aim to date. But what now that imports are surging…?

GOLD ALWAYS goes where the money is, writes Adrian Ash at BullionVault, and today’s new data today from our friends at the World Gold Council again show gold mapping the deep shift of relative wealth, from West to East, here in the 21st century.

Indian and Chinese households between them bought 1 in every 2 ounces of gold sold worldwide last year says the WGC’s new Gold Demand Trends report. By value (and on our maths here at BullionVault), China’s private gold demand has jumped above 0.6% of its huge GDP. That still lags India’s ridiculous 2.7%, but it has tripled in 5 years and is starting, we think, to worry policymakers in Beijing.

Suddenly starting after last month’s Chinese New Year, we learnt this week from our friend Bruce Ikemizu at Standard Bank in Tokyo, China’s gold importers must seek permission for each shipment not only from the central bank, but also from the bureaucrats of the State Administration of Foreign Exchange (SAFE).

“Therefore, it takes longer to import gold,” says Bruce – a frustration for those banks importing gold, but likely only to delay, not deter, the flow of metal into China. In a country where gold exports are banned, however, and where domestic mining output now leads the world, gold demand is already tempering the trade surplus.

Of course, and thanks to its world-beating mine output, the cash outflow needed to pay for China’s surging gold demand remains very much smaller than India’s bill. Still the world’s No.1 gold buyer, India has no domestic mine supply. Gross gold imports in 2011 exceeded its gross gold demand by 35 tonnes on the WGC’s data at 969 tonnes.

The impact of that cash outflow is plain to see on India’s trade balance. And that deficit – the only current account deficit in the region as Morgan Stanley notes – showed keenly on the Rupee’s exchange rate in 2011, down 15% versus the Dollar as the currency markets sought to force re-adjustment.

Back in China, however, gold imports through Hong Kong alone totaled 428 tonnes in 2011, tripling from 2010, leapfrogging the new record in gold-mining output (itself 6% higher from 2010 at 361 tonnes) and equal to more than 55% of China’s total private gold buying as reported by the WGC today.

Yes, the deeper shift of wealth from West to East demands this transfer, but coming just after India doubled its import duty on gold and silver last month – imports which matched three-quarters of India’s entire current account deficit in 2011 – the new move by SAFE should remind precious-metals bulls that massive demand growth can pose a risk to itself. First from high prices dissuading new buyers (as seen in global jewelry demand since 2005) and also, potentially, from state interference.

Gold has, since China’s deregulation began a decade ago, offered a useful if not vital way of diversifying the nation’s savings. Western deficits and the debt crisis confirm that role in 2012 and beyond, but now that China’s gold imports have overtaken domestic mine output, gold also risks denting the trade surplus – a key plank of Beijing’s economic-growth model. These two aims won’t be easily reconciled.

Looking to Buy Gold for your own private reserves today…?

Source: http://goldnews.bullionvault.com/gold_china_india_021620123

Gold and Silver Prices Rallied Yesterday –Recap February 15

Gold and silver prices changed direction and rallied yesterday from their slight fall during Tuesday’s trading; crude oil prices also increased; natural gas prices on the other hand sharply decreased. The Euro continued to depreciate against the US Dollar; other major currencies (CAD) also slightly depreciated against the U.S dollar. Here is a summary of the developments of precious metals and energy commodities for February 15^th, 2012:

Precious Metals:

Gold price moderately increased on Wednesday by 0.61% to $1,728.1; Silver price also slightly increased by 0.18% and reached $33.41. During February, gold declined by 0.7% while silver rose by 0.44%. 

The Euro/USD slightly fell again by 0.52% to 1.3066; the U.S Dollar slightly appreciated against other exchange rates such as the Canadian dollar.

Oil and Gas:

WTI price rose by 1.05% to $101.80 per barrel; Brent oil also increased by 1.8% to $119.93 per barrel;

Due to these changes, the difference between Brent and WTI oil prices increased to $18.13/bbl. During the month, WTI rose by 3.4% and Brent by 8.1%.

The Henry Hub future price (March delivery) sharply decreased by 3.95% to $2.43/mmbtu; the Henry Hub on the other hand rose to $2.54/mmbtu; the difference between the spot and future reached -$0.11, i.e. Backwardation.

A Summary of Changes for February 15^th:

The table below includes: closing prices, daily percent changes, and daily changes:

 

For further reading:

• Gold Silver Prices – Daily Outlook February 16
• Weekly Outlook for 13-17 February
• What Are the Potential Outcomes for Silver Price in 2012?
• Gold and Silver Prices Outlook for February 2012

Tags: Gold price, silver prices

Source: http://www.tradingnrg.com/gold-price-silver-prices-and-oil-increased-on-wednesday-february-15th-2012/?utm_source=rss&utm_medium=rss&utm_campaign=gold-price-silver-prices-and-oil-increased-on-wednesday-february-15th-2012

Gold and Silver Slightly Declined Yesterday –Recap February 14

Gold and silver prices slightly declined yesterday along with other major commodities prices: crude oil prices also slightly decreased; natural gas prices on the other hand sharply increased. The Euro depreciated again against the US Dollar; other major currencies (AUD and GBP) also depreciated against the U.S dollar. Here is a summary of the developments of precious metals and energy commodities for February 14^th, 2012:

Precious Metals:

Gold price moderately decreased on Tuesday by 0.42% to $1,717.7; Silver price also decreased by 1.11% and reached $33.35. During February, gold declined by 1.3% while silver rose by 0.26%. 

The Euro/USD slightly declined as well by 0.39% to 1.3134; the U.S Dollar appreciated against other exchange rates such as the Aussie dollar.

Oil and Gas:

WTI price slightly fell by 0.17% to $100.74 per barrel; Brent oil also decreased by 0.08% to $117.81 per barrel;

Due to these changes, the difference between Brent and WTI oil prices increased to $17.07/bbl. During the month, WTI rose by 2.3% and Brent by 6.2%.

The Henry Hub future price (March delivery) sharply increased by 4.12% to $2.53/mmbtu; the Henry Hub also rose to $2.48/mmbtu; the difference between the spot and future rose to $0.05, i.e. Contango.

A Summary of Changes for February 14^th:

The table below includes: closing prices, daily percent changes, and daily changes:

 

For further reading:

• Gold Silver Prices – Daily Outlook February 15
• Weekly Outlook for 13-17 February
• What Are the Potential Outcomes for Silver Price in 2012?
• Gold and Silver Prices Outlook for February 2012

Tags: Gold price, silver prices

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Gold Prices Push Higher Despite Stronger Dollar

NEW YORK (TheStreet ) — Gold prices rose Wednesday along with the dollar as the two resumed their safe haven status.

Gold for April delivery added $10.40 to close at $1,728.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,739.20 and as low as $1,720.30 an ounce while the spot price was adding $6, according to Kitco’s gold index.

Silver prices were 4 cents higher at $33.39 an ounce while the U.S. dollar index was up 0.23% at $79.59.

It was a good day for gold with the metal closing up XX%. Gold first got a lift from a stronger euro after news broke that France’s economy grew 0.2% in the first quarter and 1.4% versus a year ago. The numbers surprised to the upside as did China’s announcement that it would continue to buy euro backed assets like bonds from the European Financial Stability Fund, temporary bailout fund, or European Stability Mechanism, permanent bailout fund.

The good vibe in the market faded as U.S industrial production was flat in January compared with a 0.4% gain the month before. Investors decided to focus on that, profit taking and the continued delay in Greece securing its second bailout. The U.S. dollar gained traction as investors ran out of stocks but so did gold as they both shined as safe havens.

“Gold faces further overhead technical resistance between $1,742-$1,763,” says James Moore, analyst at FastMarkets.com. Moore also says that physical demand has been waning of late and it might drag the metal down to $1,700 an ounce.

Stan Dash, vice president of applied technical analysis at TradeStation, thinks gold looks really good technically. “Gold has worked off its overbought conditions and remained positive.” Dash thinks gold will make it up to its recent high of $1,765 an ounce. “It probably needs to pick up some steam to really punch it but I think its set up to do that.”

Dash warns that gold prices may stall again at some point especially with traders gearing up for a long weekend in the U.S., but that within the next week gold could test those recent highs. “If we can get through these highs the next level is $1,805, but let’s take it one step at a time.”

“It looks to me like gold is just trying to form a real strong base to move higher,” argues Chuck Butler, president of EverBank World Markets. “I still think that gold is going to come back to at least its previous highs of last year … I really do think that gold is the anti-dollar if you will.”

Butler firmly believes that as long as the U.S. doesn’t have a balanced budget or rising interest rates then gold will be the de factor safe haven currency of choice. “The people who really buy gold look at it more vs. the dollar more than anything else.”

Butler thinks any signs of another quantitative easing program from the Federal Reserve will break gold out of its “slumber.” Many experts are looking for more bond buying between April and June, but others are more skeptical. Deutsche Bank thinks there is a good chance the unemployment rate could drop to 7.6% by year end strengthening the case for a rate hike in 2013. Also, weekly initial jobless claims have been falling steeply as low as 358,000 for the week ending February 4th, the lowest reading since April 2008.

“In the past, claims have also been an excellent signal for when the Fed tightens, although monetary policymakers would surely argue this time is different,” says Joseph LaVorgna, managing director and chief U.S. economist at Deutsche Bank. LaVorgna says that for the most part the Fed has tightened when claims have broken below 350,000, albeit maybe not immediately. “The economic backdrop is much
different than any [other] period, but another three years seem too long to stay on hold with negative real rates if claims break that critical 350,000 mark.”

On the other end of the spectrum, the Federal Reserve in its latest FOMC minutes said that a few members see that more asset purchase, or quantitative easing, would be warranted this year. More money in the system coupled with low rates is typically good for gold as a safety play against a weaker currency.

Lastly gold will have to contend today with big named fund managers dumping some gold positions in the fourth quarter. John Paulson sold 2.9 million shares of the SPDR Gold Shares(GLD) but still holds 17.3 million and is the largest holder. The move does help explain gold’s 5% selloff during the same time period. He also sold some shares in gold stocks like AngloGold Ashanti(AU) and Gold Fields(GFI), but ramped up his shares in NovaGold(NG), Randgold(GOLD) and Barrick Gold(ABX) as well as some others.

George Soros, on the other hand, added 37,100 shares to his GLD position, which is still small at 85,450 shares. On the whole JPMorgan(JPM) was a big seller of gold dumping positions in the GLD as well as the iShares Gold Trust(IAU) for a total of 6.1 million shares, whileBank of America(BAC) added 8.3 million shares combined to both ETFs.

Gold mining stocks were mixed Wednesday. Kinross Gold(KGC) was up 0.54% at $10.45 while Randgold Resources(GOLD) was 0.4% lower at $111.82.

Other gold stocks, Agnico-Eagle(AEM) and Eldorado Gold (EGO) were higher at $34.38 and $13.39, respectively.

–Written by Alix Steel in New York.

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