By Rujun Shen

SINGAPORE Mon Jul 18, 2011 2:30am EDT

(Reuters) - Spot gold touched a record high on Monday, on track for its longest winning run in at least four decades, reflecting persistent worries about the euro zone debt crisis and a growing threat of a U.S. government default.

Spot gold rose to an all-time peak of $1,598.41 and

U.S. gold hit a record high of $1,599.20.

The appetite for bullion as a safe storage of value increased, as Republicans and Democrats sought to craft a plan that could avert an unprecedented government default, which might wreak havoc in global markets and send the world's top economy back to recession.

Adding to worries about the economic growth, U.S. consumer confidence hit a near 2-1/2-year low in early July and manufacturing output stalled in June.

"The political uncertainties in the United States and Europe will be an ongoing theme and safe-haven demand will continue," said Natalie Robertson, a commodities analyst at ANZ.

Robertson expected gold to reach $1,650 in the short term on macro concerns and chart strength, but added that volatility may increase as the deadline for the U.S. debt ceiling talks on August 2 draws close.

Spot gold edged up 0.2 percent to $1,596.20 an ounce by 2:12 a.m. ET, on course for an 11th straight session of gains, its longest winning stretch in at least four decades.

U.S. gold gained 0.4 percent to $1,596.70.

Results of stress tests of 90 banks across the European Union were better than expected, but failed to impress investors who continue to worry about the possibility of contagion of debt crisis in the region.

"This move in gold still has momentum, as Europe is burning to the ground," said a U.S.-based trader.

Technical analysis also pointed to a bullish picture. Spot gold has resumed its medium-term uptrend and would rise toward $1,613, said Reuters market analyst Wang Tao.

Indicating increased appetite in bullion, speculators sharply raised their bullish bets in U.S. gold futures and options last week as prices rallied, data from the U.S. Commodity Futures Trading Commission showed.

Holdings at the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose nearly 1 percent to 1,236.013 metric tons, highest since late January.

"Gold prices have hit fresh highs across several currencies on macro unease, the dollar weakening and the escalation of European sovereign debt uncertainty creating a favorable backdrop," said Barclays Capital in a research note.

"We expect prices to test new highs despite the seasonal weakness in demand."

Spot silver hit $39.95, its highest since May 4. It was trading at $39.84, up 1.5 percent, leading the year-to-date performance in the precious metals complex with a 29-percent gain.

U.S. silver gained 2 percent to $39.87.

The gold-silver ratio, used to measure how many ounces of silver can buy an ounce of gold, declined to 40.10, its lowest since end of May.

By Lewa Pardomuan

SINGAPORE, March 15 (Reuters) - Gold slipped half a percent on Tuesday as declines in stock markets triggered by a deepening nuclear crisis in Japan prompted speculators to sell bullion to cover losses, while holdings on the ETF slipped to their lowest since May last year.
Japanese stocks dropped 7 percent to a two-year low and futures prices plunged as the country's prime minister said radiation levels at a stricken nuclear plant had become high, deepening concerns about the economic toll of the disaster.
Gold lost $6.95 an ounce to $1,419.70 an ounce by 0328 GMT, after rising as much as 1 percent on Monday as Japan battled to prevent a nuclear catastrophe after last week's devastating quake and tsunami and on political unrest across the Arab World.
"It still looks like it's constructive. It's just consolidating. But if we get a large sell-off in equities, people will tend to sell gold," said Jonathan Barratt, managing director of Commodity Broking Services in Melbourne.
"But if it's a major concern, then people will eventually go to gold as the last resort."

Premiums for gold bars were steady at between $1 and $1.5 an ounce to the spot London prices in Hong Kong and Singapore, with no signs of safe haven buying related to last week's massive earthquake in Japan and the subsequent nuclear crisis.
Quake-hit Japan faces a recovery and reconstruction bill of at least $180 billion, or 3 percent of its annual economic output, or more than 50 percent higher than the total cost of 1995's earthquake in Kobe.
"The price shot up to above $1,430 but it could not break through that level. I think that's why the market is down. Also, ETF holdings seem to be going down again," said a dealer in Singapore. "We can say people are selling gold to cover their margin call."

U.S. gold futures for April fell $5 to $1,419.9 an ounce.
In the Middle East, the United States urged Saudi Arabia on Monday to show restraint after it sent troops to neighbouring Bahrain in a move some analysts said showed the limits of Washington's influence in the region.
The deployment of 1,000 Saudi troops, at the request of Bahrain's Sunni royal family, came two days after U.S. Defence Secretary Robert Gates visited the island kingdom and pressed its rulers to implement political reforms to defuse tensions with the Shi'ite Muslim majority.
Rising tension in the North Africa and the Middle East helped bullion struck record around $1,444 last week.

But Volatility's A Caveat—CPM's Christian

07 March 2011, 7:45 p.m.
By Daniela Cambone
Of Kitco News


TORONTO (Kitco News) - Silver is riding a wave of investment demand because of inflation concerns and geopolitical fears and will remain volatile during the coming months with a range of as much as $20 an ounce, according to an executive of a New York consultancy.

May silver futures closed up 78.3 cents at $36.11 an ounce Monday. Prices closed near mid-range and hit another fresh contract and 31-year high.

Jeffrey Christian, managing director of the CPM Group, said investors are nervous, worried that inflation is rising, that the currency markets are uncertain and that the stock market is top-heavy.

"They're saying 'Let me diversify into precious metals' and silver seems to be one of the more attractive ones to them," Christian said. He was interviewed by Kitco News on the sidelines of the Prospectors & Developers Association of Canada being held in Toronto.

Christian said investors also are buying gold and silver because of the economic and political uncertainty in the Middle East. They fear unrest in Libya and other oil-producing countries could drive oil prices even higher and could dampen the economic recovery and stunt the stock market.

It isn't too late to get into the silver market, Christian said, but investors should take the right approach. "We're telling our clients to not necessarily be buyers a $36," he said, but also not to sell their long positions in that area. They should keep those positions as a long-term holding, he said, "but buy some puts to hedge against prices falling down."

Christian said silver prices could trade in a $20 range between $40 and $20 in the next few months. "That is an incredibly volatile market," he said, noting the price was $27 a few weeks ago and everyone thought the bull rally was over.

"I would not advise anyone to be a buyer at this point," Christian said. "I'd be waiting to see the price pull back to $27 or lower over the next few months. Then I would come in as a buyer at that level."

While silver has been soaring, platinum and palladium have hit some bumpy paths. Prices have fallen because there are viewpoints that if oil prices get higher, people could stop buying new cars. "We think that is a false thesis," said Christian. He said there are a variety of analyses in the oil market right now that don't necessarily hold credence.

Nevertheless, he said. that are a lot of hedge funds dumping platinum and palladium because they think auto sales will be negatively affected by the increase in oil prices.

(Kitco News) - World gold demand grew 9% during 2010 to 3,812.2 metric tons, its highest level in 10 years, said the World Gold Council Thursday in its quarterly demand-trends report.

“This performance was mainly attributable to higher jewelry demand, strong momentum in key Asian markets and a paradigm shift in the official sector, where central banks became net purchasers,” said the report. “The WGC expects total demand to remain resilient across the jewelry, investment and technology sectors in the coming quarter.”

The 9% increase in demand was marginally above the previous peak in 2008 even though the annual average price of gold was 40% higher than two years ago, the report pointed out.

In value terms, annual demand was up 38% to a record $150 billion, including a quarterly record in the October-December period of $42 billion. Data in the World Gold Council report was compiled by the consultancy GFMS.

Jewelry demand posted strong recovery in 2010, the report said. Growth of 299.3 tons represented a 17% gain from the previous year, taking the total to 2,059.6 metric tons. This was fueled by gains in China and India, which collectively accounted for 51% of global jewelry, bar and coin demand for the year, the report said.

India’s jewelry demand climbed 69% for the year to 746 metric tons, while China’s hit a record 400 tons.

“Chinese demand is expected to increase during the year as economic growth in China remains strong, while Indian gold jewelry demand should show resilience in the face of higher price levels, with some opportunistic buying on price dips,” said the report.

Eily Ong, of investment research with the WGC, told Kitco News that the strong jewelry demand is especially noteworthy considering the average London afternoon gold fixing price during 2010 rose 26% to $1,225 an ounce. Often in the past, higher prices hurt demand.

In fact, in the fourth quarter, jewelry accounted for roughly 60% of total gold demand. This is up from 50% for full year 2009 and 54% for full year 2010.

Buying in China and India was helped by strong economic growth and rising incomes, Ong said.
“They view jewelry as both an adornment and as an investment.” Indian gold jewelry tends to be 22-karat and China tends to be 24-karat, which is basically pure gold, she said.

New global investment demand—such as bars, coins and exchange-traded products—was “more or less stable,” dipping 2% to 1,333 metric tons, the report said. Investment in physical bars rose 56% for the year to 713.2 tons, more than three times the average of 215.5 for the years 2003-2007. New demand for gold in exchange-traded-fund and similar products was 338 metric tons in 2010, down 45% from the previous year, the WGC said. However, 2009 was considered a “remarkable” year for ETFs. In fact, last year was still the second-strongest year for new ETF demand, with total holdings for such products standing at 2,175 metric tons as of year-end.

The amount of gold utilized by the technology sector slowed some in the fourth quarter, but overall was 12% higher for the year at 420 tons, the WGC said.

The report also lists 296 metric tons of gold in “over-the-counter and stock flows,” which in the past was referred to as “inferred investment.” When included with the other demand of 3,812 metric tons, this leaves all demand equal to the report’s estimate of supply for the year totaling 4,108 metric tons.

India posted the strongest overall consumer demand in 2010, with growth of 66%, largely driven by the jewelry sector, said the WGC. China showed the most investment growth, with record demand for bars and coins of 179.9 metric tons that was up 70% from the prior year. Thailand had record investment demand growth of 51.2 metric tons, especially noteworthy since it represented a swing from disinvestment of 10 tons in 2009.

For the fourth quarter alone, the WGC reported jewelry demand of 575.2 metric tons that was up 13% from 511 in the prior-year quarter. Investment demand was up 13% year on year to 276.3 metric tons.

Technology demand was nearly flat at 104 metric tons in the fourth quarter, compared to 103 in the same period for 2009. Previously, the electronics sector has posted double-digit percentage gains for four straight quarters at it recovered from prior economic weakness.

The Gold Council said it anticipates gold will remain a “foundation” in portfolios as investors seek protection from risk and inflation. This will be further aided by uncertainty about the global economic recovery and fiscal imbalances of some nations.

The report said an “East/West divide” occurred as gold fell in the early weeks of 2011. There was a “shakeout” of investment positions in Western markets as traders exited ETF holdings and long futures positions on the Comex division of the New York Mercantile Exchange. However, there was “substantial” physical demand in Asian markets, as reflected by rising premiums.

“The recent pullback in price may stimulate increased allocations to gold among investors who missed opportunities last year to add to their holdings,” the WGC said.

By Allen Sykora of Kitco News;

16 December 2010, 12:00 p.m.
By Debbie Carlson
Of Kitco News
Editor’s Note: Prices for many precious and base metals hit record highs in 2010, as economic uncertainty rattled around the globe. What does 2011 hold for gold, silver, platinum, palladium, copper and other metals? Kitco News reporters have prepared a series of stories which examine what is in store for 2011, not only for metals but for currencies, stocks and the overall economy. These stories will be posted on Kitco.com during the holiday period and also will be featured in a special section. Stay tuned for video highlights as well.

(Kitco News) - After hiding in gold’s shadow for years, silver is finally getting its chance to shine.

Concerns about the outlook for the global economy, worries about future U.S. inflation because of two quantitative easing programs by the Federal Reserve, and uneasiness with the size of the debt in Western nations has caused many investors to seek comfort in an old friend, precious metals.

As gold prices reached all time highs this year, trading over $1,400 an ounce, investors who feel they can’t afford to buy the yellow metal are looking to silver as a possible proxy to gold. To some degree it makes sense. It’s a precious metal which can be bought in both bullion and numismatic physical versions like gold, can be a store of value, a hedge against inflation and is much cheaper to purchase, giving it the moniker of the “poor man’s gold.”

There are also exchange-trade fund versions of silver that allow it to be traded like a stock without any physical metal changing hands. Furthermore, silver prices have outperformed gold so far this year. As of Dec. 16, gold futures prices on the Comex division of the New York Mercantile Exchange rose 25%, while silver futures gained 69%.

With figures like that it’s not surprising that silver is attracting investment interest from average Joes to big time hedge fund managers. Yet it’s important to realize that while there are some similarities, there are also very distinct differences between buying gold and buying silver.

Similarities

Silver bullion can be bought just like gold bullion can be, and often firms that sell gold bullion sell silver bullion, too. Bullion can be bought in either coin or bar form and represents the closest investment one can make to the spot, or current, price of silver. The U.S. Mint strikes silver bullion coins such as American Eagles. Other popular silver bullion coins include Canada’s Maple Leafs and South African Krugerrands, said Paul Mladjenovic, author of “Precious Metals Investing for Dummies.”

He said he personally likes the American Eagles, because of the familiarity of the coin with other investors which makes it easy to resell.

He also recommends to investors who are new to precious metals investing to stick with bullion, rather than numismatic coins. “They are like night and day. I would discourage new investors from them in the beginning. You have to be very diligent about getting information,” he said.

Where in bullion the price of silver constitutes the main value of the coin, in numismatic coins, metal content is less of a factor. Factors like mintage and condition of the coin can matter much more than the going price for silver, Mladjenovic said.

When buying physical metal, an investor must make arrangements to store it safely. It can be in a home safe or at a bank safe deposit box. Some metals dealers can arrange for on-site storage and for an investor with financial capabilities, they can store it in an overseas bank. For the investor who decides on home storage, Gijsbert Groenewegen, managing partner of Silver Arrow Capital Management in New York, offered this advice: “don’t tell anyone.”

Another similarity is the advent of exchange-traded funds for gold and silver. ETFs, as they are known, are purchased and sold like stock, with their own ticker symbols. The ETFs track the price of metal throughout the day.

There are two kinds of ETFs, ones that buy up physical metal and lock it in a safe, and others that buy futures contracts or other derivatives instead. Most metals analysts recommend to investors the ETFs that buy physical metal, rather than ones based on derivatives.

Investors can also buy futures contracts on silver or gold, but most metals analysts don’t recommend neophyte investors get involved in futures investing. “The futures markets need constant monitoring. You can’t put it in a drawer and forget about it,” said Shawn Hackett, president of Hackett Financial Advisers. “It’s high frequency and high energy. For someone to get involved without a lot of knowledge, they’re not likely to have a positive experience.”

Differences

Gold and silver might both be precious metals, much of the similarities end there. The biggest difference, of course, is price. Gold prices are hovering over $1,400 an ounce, while silver is trading around $30 an ounce, making it much more affordable to the smaller investor.

While both are bought as a store of value, silver has a second role as an industrial metal, so manufacturing activity can influence its price. If manufacturing starts to increase, silver can see price support from increased usage, but during a recession, silver can see its price impacted more than gold.

Groenewegen said silver’s use in the medical field has been growing as it is used to purify water and has anti-bacterial qualities. It’s also a good conductor of electricity, he said.
While there is industrial demand for silver, the investment demand has been driving prices higher and will likely continue to do so, says David Morgan, independent precious-metals analyst with Silver-Investor.com.

Morgan said new investors need to realize that silver is more much volatile than gold. While there’s a lot of potential for gains, there’s just as much potential for losses, which means investors need to take care when buying silver. A perfect example is to look at the gains silver put in this year versus gold.

One of problems he sees is that new investors do too little research or make big bets that can quickly go wrong on them. “All the information you discovered is out there in the investing community. People go in and have their emotions overrule them, rather than averaging in over time. I think there’s more greed in the silver market than the gold market,” Morgan said.

Morgan favors initially to buy physical silver without using leverage or margin, to avoid getting trapped in a wrong-footed move. He also favors “top-tier, unhedged, cash-rich mining companies” for investors who would rather buy equities than metal.

Outlook

Metals analysts said as long as interest rates remain near zero, there is no opportunity cost to hold precious metals. With the Fed likely to continue its quantitative easing program – where it buys U.S. Treasury bonds to push down longer-dated interest rates – there should be enough stimulus in the economy to invest in metals. Further, a pickup in manufacturing in Asia and other emerging markets should increase demand for silver.
Robin Bhar, senior metals analyst at Credit Agricole CIB in London forecasts silver prices to average nearly $23 an ounce in 2011 on support from investor demand and a pickup in manufacturing. That forecast is down from the current trading price of around $30, which again underscores the volatile nature of silver.

By Amanda Cooper

LONDON Thu Oct 7, 2010 6:15am EDT


LONDON (Reuters) - Gold rose to a third successive record high on Thursday, putting it on track for its strongest weekly performance in six months, as expectations for the Federal Reserve to prop up the economy undermined the dollar.

The Fed is widely expected to resume quantitative easing -- in which the central bank would buy government bonds for example and pump extra cash into the financial system to keep interest rates low -- which has pushed the dollar down 7 percent against a basket of currencies in the last month.

Gold, which usually benefits from dollar weakness due to its inverse relation with the U.S. currency, has gained nearly 10 percent in the same period.

Spot gold was last at $1,359.75 an ounce at 0938 GMT (5:38 a.m. EDT), up from $1,345.80 late on Wednesday, but down from an all-time peak of $1,364.60 struck earlier in the day.

The price has risen by 3.2 percent so far this week, its largest weekly rise since mid-April.

U.S. gold futures for December delivery hit a fresh record high at $1,366 an ounce, before easing slightly to show a 1 percent gain on the day at $1,361.00.

"We look at the reasons for holding gold and other precious metals and, above everything else, it is the idea of a store of value to protect against currency debasement," said Natixis strategist Nic Brown. "Whether you're undergoing quantitative easing or whether you're devaluing your currency against others, it all adds up to pretty much the same thing."

"As a consequence, governments are delaying any fiscal austerity, while monetary authorities are rolling out additional quantitative easing measures over and above the exceptionally low interest rates that are already in place, that is just good for gold."

SUPPORT FROM FUNDAMENTALS

Gold retreated from earlier highs after the world's third-largest producer of the metal, Anglogold Ashanti (ANGJ.J) said it had completed the buy-back of its hedgebook, previously the largest in the industry.

But on a supportive note for gold, the central bank in key consumer Vietnam saying it would consider granting permits for gold imports, which have been banned for over two years, if domestic prices rose "unreasonably high.

"People are going to focus on the fact that Asian physical market will be tight. Last time Vietnam opened the door to gold imports, gold went up $20. In percentage terms, it could translate into $30 today," said a Singapore-based trader.

In more fundamental news for gold, the World Gold Council said it expects central banks to be net buyers of gold in 2011, for the first time in nearly two decades.

Nervousness over the outlook for U.S. growth was heightened on Wednesday after a survey of private-sector employment showed a surprise contraction in September, which further unsettled investors ahead of Friday's key employment report.

"With expectations for quantitative easing high, data monitoring between now and the November 3 (Fed policy setting) meeting becomes even more significant," wrote UBS analyst Edel Tully in a note.

"The short-term direction of the US dollar, and therefore gold, will be influenced by tomorrow's US payrolls data: a positive or negative deviation from expectations will weigh heavily on market thinking about quantitative easing prospects."

Short-term U.S. Treasury yields are around record lows, while European equities .FTEU3 dipped ahead of interest rate decisions from both the European Central Bank and the Bank of England later in the day.

The strength in gold extended to the other precious metals.

Spot silver hit a new 30-year high at $23.51 an ounce, and was last quoted at $23.41, up from $23.13.

Holdings in the iShares Silver Trust, the world's largest silver-backed, exchange-traded fund, rose to a fresh record high of 9,944.14 tonnes.

In comparison, holdings in the SPDR Gold Trust remained unchanged for two straight days.

Platinum group metals followed the rally in gold. Spot platinum rose to $1,723, its highest since mid-May and was last up 1.5 percent on the day at $1,721, while palladium hit a new nine-year peak at $602.50 and was last up nearly 4 percent at $600.50.

(Additional reporting by Rujun Shen in Singapore)

17 August 2010, 4:24 p.m. EST
By Allen Sykora
Of Kitco News


(Kitco News) -- Worries about a fragile U.S. economy are likely to keep investors shifting toward gold and could push the metal to fresh record highs near the $1,300 area by year-end, analysts and traders say.

December gold futures early Tuesday peaked at $1,231.10 an ounce on the Comex division of the New York Mercantile Exchange, their strongest level since late June. They eventually settled $2.10 higher at $1,228.30 an ounce.

As of 3:36 p.m. EDT (1936 GMT), spot gold was 60 cents higher at $1,226.10.

Mike Daly, gold and silver specialist with PFGBest, looks for gold to “go much higher” than the record hit earlier this summer due to uncertain U.S. economic conditions and a still “fragile” environment in Europe, where sovereign-debt issues were a major focus earlier this year. The peak for a most-active Comex futures contract was $1,266.50 back in June.

“Economic numbers here, such as housing and jobs growth, have been very negative,” Daly said. “That is giving savvy investors globally a lack of confidence in fiat currencies. Most people right now, who have disposable income, are preferring to get into more tangible assets, primarily gold and silver, for a safer-haven investment.

“They see that gold and silver and precious metals in general have retained value better than most commodities over the last couple of years.”

Kevin Grady, a trader on the Comex floor with MF Global, cited continuing foreclosures are a harbinger of further support for gold, since it shows many Americans are still struggling amid weak economic conditions. In fact, with a federal-funds-rate target of zero to one-quarter percent, the Federal Reserve is essentially offering “free money” to banks with the hope lending will jump-start the economy, he said. Yet, many Americans are not able to borrow, unless they have a high credit rating and cash for large down payments.

“And the people who have money are saving,” said Grady, who looks for $1,300 gold by January. “People are holding onto what they have.”

Meanwhile, government debt continues increasing.

“I think it's a slow grind, but gold should go much higher from here,” Grady concluded.

Michael Gross, broker and futures analyst with OptionSellers.com, described his company as “cautiously bullish” on gold on ideas that any economic recovery could be “spotty.” Still, the metal could experience “fits and starts” rather than moving up in a straight line. He figures gold could “modestly eclipse” the highs from June in the foreseeable future and later in the year potentially hit $1,275 or even push $1,300.

Further support may come from political uncertainties in the U.S., with congressional elections this fall, as well as debate among lawmakers on whether to continue some or all of the Bush Administration tax cuts due to expire at the end of the year. This could put some pressure on equities and prompt some movement into gold, Gross said.

“Uncertainty tends to be good for precious metals,” Gross said. “If people are not sure what to do with their money, they put it into gold. That seems to be the safe and conservative bet, and we expect that to continue in the second half of the year.”

Investors are “tired” of the uncertainty in which government or central-bank officials suggest improvement in the economy, with their comments followed by weak jobs data, Daly said.

“There is so much fear based on what is going on in Washington,” said Bob Haberkorn, senior market strategist with Lind-Waldock who also anticipates $1,300 gold yet this year. “You're getting new investors looking at gold and silver.”

Charles Nedoss, senior market strategist with Olympus Futures, looks for further U.S. dollar weakness, which in turn tends to support gold. Investors often buy the metal as a hedge against a softening greenback, plus a weak dollar makes commodities less expensive in other currencies and thus can boost demand.

Low market-set interest rates, as a result of a soft economy, may result in an eventual retest of the 80 area for the dollar index, Nedoss said. It currently stands just above 82.

“I just don't see that turning around,” said Nedoss, also anticipating $1,300 gold. “I think the economy is showing us now that it's fragile enough that it can't withstand higher rates.”

Seasonal Factors Could Provide Additional Support

While analysts describe macroeconomic conditions as favorable, the calendar is approaching the time of year when gold tends to get a seasonal boost.

“We're getting closer to the (autumn) wedding and festival season in India,” Daly said. “That is normally a time when gold spikes a little bit.”

September and October tend to be strong months for silver and gold alike, Haberkorn said. “Of all years, from an economic standpoint in this country and around the world, I think an upside move is more than warranted,” Haberkorn said.

Once the gift-giving season winds down in India, physical buying of gold often continues ahead of Christmas in Western nations and later the Chinese New Year.

Still, Gross cautioned that the economy will remain the key catalyst more-so than any seasonal tendencies. In recent years, gold has traded “almost exclusively” based on economic expectations, he said.
“I would expect that to continue,” Gross said. “Any physical (seasonal) support would certainly help gold, but we don't see that as the potential major price determinant for gold over the next several months.”

By Allen Sykora of Kitco News

New Delhi, Aug 16 (PTI) Gold prices surged to a six-week high in the national capital today on persistent buying by stockists and jewellers to meet the festive demand amid a firming global trend.

Market analysts said persistent buying by stockists and jewellers for the festive season demand and firm trend in global markets continued to supported the rise in gold and silver prices. They said fears of slow down in global economic growth mainly raised demand for the precious metal as a safe haven for investors and lifted the prices.

Gold in global markets, which normally sets the price trend on the domestic front, added 6.50 dollar to USD 1,221.90 an ounce. Investors shifting their funds from weak equity markets to rising bullion for quick gains, also influenced the trading sentiment to some extent, traders said.

Wednesday, 7 July 2010 at 09:26, Reuters, Singapore

Gold regained strength on Wednesday as bargain hunters snapped up the metal after prices dropped to a six-week low the previous day, while dealers also shrugged off declines in ETF holdings.

Bullion has dropped more than 2 per cent since striking a record above $1,264 an ounce in late June, but turmoil in the financial markets could offer investors a safe haven. Dealers in Asia also noted a pickup in physical buying from jewellers.

Spot gold rose $1.50 to $1,193.00 an ounce by 0232 GMT, having fallen as low as $1,189.30 on Tuesday. Gold had struck a lifetime high on worries the euro debt crisis was spreading and that US economy was slowing.

"I wouldn't be surprised to see gold recover back above $1,200 an ounce or may move even higher in the near term," said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney.

"At the end of the day, I think the uncertainties in the international economic environment remain significant and they will be supportive for the gold price in the near term."

US gold futures for August delivery fell $1.3 to $1,193.8 an ounce.

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings slipped to 1,316.481 tonnes by July 6 from 1,318.915 on July 2. The holdings hit a record at 1,320.436 tonnes on June 29.

"At this stage, I wouldn't read too much into that," said Moore, referring to the decline in ETF holdings. "I don't think it's inconsistent with what we're just talking about... may be some profit taking and things like that."

The Nikkei edged down on Wednesday as shares of exporters that rose the day before gave back some gains, even after the Wall Street rebounded on Tuesday to end a five-day string of losses.

The euro hovered near seven-week highs on Wednesday while the Australian dollar retained its smart gains, as investors pared long positions in the US dollar on doubts about an U.S. economic recovery.

The physical sector was active in Singapore and Hong Kong, and steady demand from jewellers and other physical buyers led to supply tightness.

"We've been selling gold since last week, but it's difficult to get hold of materials within a short period," said a physical dealer in Singapore, who trades gold bars. "The market may also turn around too quickly. That's why it's difficult for both customers and sellers," he added.

In holiday-thinned trade, the yellow metal was boosted by warnings from the European Central Bank and China over the global economic outlook
Author: James Regan (Reuters)
Posted: Tuesday , 01 Jun 2010

SYDNEY (Reuters) -

Gold climbed to its highest in almost two weeks on Tuesday after warnings from the European Central Bank and China over the global economic outlook sparked fresh safe-haven buying.

Reuters' technical analysis suggests gold could advance a further $6-$7 to trade closer to its May 14 record of $1,248.95 an ounce as upside momentum builds.

Gold traded at its highest since May 19, up after news that China's official purchasing managers' index (PMI) fell to 53.9 in May from 55.7 in April, just under analysts' forecasts of 54.0.

The decline was enough to turn more investment to bullion despite the data showing that for the 15th straight month, the official PMI stood above the threshold of 50 that demarcates expansion from contraction.

"Since the start of the problems in Greece and Spain, gold's become ultra-sensitive to unfavourable economic news," a metals dealer in Sydney said."This should keep up the support today."

Another dealer said gold's fresh surge could bump up already record-high exchange-traded gold-backed securities, once the United States and Britain return from a three-day weekend later on Tuesday.

Data from the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust (GLD: Quote), shows its holdings unchanged at a record 1,267.930 tonnes as of May 28.

Spot gold XAU= climbed $8 to $1,222.20 an ounce versus the last notional close, the highest price since May 19, according to Reuters data before recoiling slightly. At 0412 GMT, gold stood at $1,219.40 an ounce. U.S. gold futures for August delivery GCQ0 were up $6.70 at $1,221.70 an ounce from the previous day.

The European Central Bank warned Monday that euro zone banks face potential loan losses of up to 195 billion euros over the next 18 months due to the financial crisis, and

disclosed it had increased purchases of euro zone government bonds.

The warnings came after China had cautioned that the global economy remained vulnerable to sovereign debt risks.

Also, despite Monday's market holidays in the United States and Britain, bullion found some added support as it became evident that global market turbulence over the euro zone debt crisis had hit Argentine bond prices, which fell 5.4 percent on average in May

The U.S. dollar was steady in thin trade on Tuesday, while oil edged higher, running contrary to weaker Asian equities. Silver XAG= and platinum XPT= were modestly higher, while palladium XPD= slipped in light volumes.

(Editing by Clarence Fernandez)

© Thomson Reuters 2010 All rights reserved

LONDON (Reuters) - Gold priced in euros, sterling and Swiss francs hit record highs on Friday, with risk-averse investors seeking hard assets as the euro fell on continuing euro zone sovereign debt concerns.

Euro-priced gold hit a high of 990.85 euros and was at 989.65 euros an ounce by 9:18 a.m., while the euro extended losses to a 14 month low against the dollar.

Gold hit a record 1,389.41 francs an ounce in Swiss franc terms, and 852.02 pounds an ounce when priced in sterling.

Gold Climbs to Record for Second Day as Euro Risk Fuels Demand
May 12, 2010, 1:39 AM EDT
By Gavin Evans and Kim Kyoungwha

May 12 (Bloomberg) -- Gold climbed to a record for a second day on investor concern that international financial support for indebted European states will depress currencies.

Bullion for immediate delivery rose to an all-time high of $1,234.93 an ounce before trading at $1,233.55 an ounce at 1:29 p.m. in Singapore. June-delivery futures jumped as much as 1.3 percent to a record $1,235.50 an ounce.

Gold advanced as the euro extended losses against the dollar on doubts that an almost $1 trillion loan package will be able to prevent Greece’s sovereign debt crisis being repeated in other European states.

“All we can do is to put our money into real assets because paper money everywhere is being debased,” Jim Rogers, Singapore-based chairman of Rogers Holdings, told Bloomberg Television today. “I’m not selling gold forever.”

Gold has climbed 12 percent in 2010, and is heading for its 10th consecutive annual gain. This year, the euro has dropped 12 percent against the dollar, the MSCI World Index of major equity markets fell 2.1 percent and returns on benchmark U.S. treasuries advanced.

Europe’s debt crisis “isn’t going to be that easy to fix,” said Gavin Wendt, senior resource analyst with Mine Life Pty in Sydney. Gold is being driven by “fear that, even though they’re throwing a hell of a lot of money at this, it won’t be resolved and that these debt issues will continue to spread to other countries, primarily Spain and Portugal.”

“They’ve waved this magic trillion-dollar wand in front of everyone, but where is it going to come from?” Frank McGhee, head dealer at Integrated Brokerage Services LLC in Chicago, said yesterday. “They’re stopping a debt problem by creating more debt. Sooner or later, everybody stops trusting paper, and that’s the lure of gold.”

Among other precious metals, platinum for immediate delivery fell 0.6 percent to $1,694.50 an ounce, its first decline in five days. Silver was little changed at $19.2975 an ounce, after surging 4.2 percent to a five-month high yesterday. Palladium lost 0.7 percent to $530.53 an ounce after four days of gains.

Silver and platinum are likely to “wax and wane” with the underlying economic outlook, given their industrial uses, Wendt said. Gold reaching $1,500 by year-end would be “quite a reasonable price target” given the renewed demand, he said.

“There’s more reasons to hold gold now than there were even 12 months ago when we had the remnants of the financial crisis,” he said.

Debt-Laden

European policy makers agreed to a region-wide lending plan after a 110 billion euro ($139 billion) support package for debt-laden Greece a week earlier failed to convince investors that similar sovereign debt crises would not be repeated in other nations.

Marek Belka, the director of the International Monetary Fund’s European department, said he doesn’t consider the rescue package a “long-term solution.” European countries saddled with debt, including Spain and Portugal, should focus on cutting deficits in the wake of unprecedented efforts to contain the region’s fiscal problems, according to John Lipsky, the IMF’s No. 2 official.

“A bubble is forming with sovereign debt,” said Peter Sorrentino, who helps manage $13.8 billion at Huntington Asset Advisors in Cincinnati. “We want to hold gold as a reserve of wealth because there’s a big devaluation of G-7 currencies ahead.” Gold may soar to $1,800 within three years, he said.

--With assistance from Pham-Duy Nguyen in Seattle and Nicholas Larkin in London. Editors: Jarrett Banks, Jim Poole

Palladium Price Rise linked to Investment Demand, ETFs

13 April 2010, 11:37 a.m. EST
By John Dourekas
Of Kitco News


Montreal (Kitco News) -- With palladium prices at two-year highs, many industry experts say that the rise of the metal -- primarily used in cars -- is not solely due to the auto sector recovery but also because of impressive investment demand.

ETFS Physical Palladium Shares (Ticker: PALL) has created additional investment demand and in turn are removing significant amounts of physical palladium from the supply chain, the industry officials said.

George Topping, Managing Director of Base Metals Research for Thomas Weisel Partners, said that during the past two years the demand for investment has grown and there has been a tremendous interest in palladium.

"With Exchange Traded Funds (ETFs), it makes it even easier to invest - they are a sudden and unexpected source of demand. It doesn’t give time for the industry to respond, so there is a good potential for prices to spike, " Topping said.

Palladium, currently sitting at $517 an ounce (as of press time) could possibly hit highs of $700, said Topping.

Quoting figures from Johnson Matthey, Topping said that investment demand for palladium was 260,000 ounces in 2007; 420,000 in 2008 and 635,000 ounces in 2009.

Rik Visagie, a mining analyst for Octagon Capital, said the ETFs have stepped in and taken half a million ounces of palladium off the market. “We picked palladium to outperform both platinum and gold in the intermediate term,” Visagie said.

William Biggar, the President and CEO for North American Palladium, also sees ETFs as being an important thrust behind palladium’s rise. “I think ETFs can be quite a dramatic factor going forward – it was a dramatic factor for gold," Biggar said. "We are seeing a similar trend emerging with palladium; people want access to it and they want to invest in ETFs."

In its annual report released last week, Stillwater Mining Company - the only U.S. producer of palladium and platinum- indicated that new palladium ETFs have increased retail demand for PGMs. Stillwater Mining is also the largest primary producer of platinum group metals (PGMS) outside of South Africa and Russia. The firm’s annual report highlights the fact that palladium remains a scarce commodity with very limited prospects for supply growth and one whose production problems are still present.

“South African production, key to global supply, faces impending severe operating and growth constraints,” the Stillwater report said. It also said that Russian state inventories of palladium that historically overhung the market now appear to be fully depleted.

Biggar said in terms of where palladium is positioned right now, "the fundamentals have never looked better. If you look at the supply side , palladium is a very rare precious metal – there are only about 6 million ounces produced annually. If you look at where the 6 million come from – it is nearly 50% from Russia.”

Palladium, primarily mined in Russia and South Africa, is diminishing in supply, said Visagie of Octagon Capital. “The Russian stockpiles are no longer there - palladium on the consumption side has been living off the stockpile for 20 years," he said. "Plus you have the substitution side - as platinum becomes more expensive there is a great impetus to cut down the cost and try to use palladium."

Topping , of Thomas Weisel Partners , said that the Russian supply will continue to decline. “Production in Russia fell from 3.66 million ounces to 3.56 million ounces from 2008 to 2009, " he said. In 2007 they were at 4.5 million ounces – so Russia has seen a decline in production.”

Palladium, along with platinum and rhodium, is primarily used to manufacture automobile catalytic converters, which filter out carbon monoxide and particulate emissions. Prices of all three metals prices began a steady climb last week as automakers reported improving sales and the Labor Department said 162,000 jobs were created in March.

--By John Dourekas of Kitco News
(Daniela Cambone contributed to this report)

Gold Gains for Third Day in London as Dollar Drop Spurs Demand.

By Nicholas Larkin and Kim Kyoungwha

March 29 (Bloomberg) -- Gold gained for a third day in London as a weaker dollar increased demand for the metal as an alternative investment.

The dollar slid as much as 0.9 percent against the euro on receding concern that Greece's financial crisis will derail Europe's economic recovery. Gold, which dropped to a five-week low last week, typically moves inversely to the U.S. currency.

A weaker dollar "is giving a helping hand to gold," said Afshin Nabavi, a senior vice president at bullion refiner MKS Finance SA in Geneva. "Demand for physical gold continues to be strong," particularly from Asia, he said.

Gold for immediate delivery added $4.48, or 0.4 percent, to $1,111.98 an ounce at 11:42 a.m. local time. Bullion for June delivery was 0.7 percent higher at $1,112.80 on the Comex in New York.

Bullion rose to $1,111.25 an ounce in the morning "fixing" in London, used by some mining companies to sell production, from $1,096.50 at the afternoon fixing on March 26. The metal, little changed last week, is trading 9.3 percent below a record $1,226.56 set Dec. 3.

The euro rose after the European Union enlisted the aid of the International Monetary Fund last week to help Greece finance the region's biggest budget deficit should it run out of options in capital markets. Concern that European nations including Portugal and Greece will be unable to reduce deficits has dragged the euro 5.8 percent lower against the dollar this year.

Holding Above $1,100?

"The downside on gold prices is limited," said Wallace Ng, executive director of the commodity derivatives team at Fortis Nederland NV in Hong Kong. "I don't see gold trading below $1,100 an ounce or lower for now."

Prices may find support after suicide bombers killed at least 36 people in two subway bombings in Moscow, Nabavi said. The blasts are the deadliest in the city since 2004. Gold rose 1.6 percent on March 26 as the dollar slumped and a South Korean patrol boat sank near the nation's disputed border with North Korea. U.S. and South Korean officials said there were no indications of North Korea's involvement.

China's gold usage may double within the next decade, boosting prices as supplies lag behind demand from investors and jewelers, the World Gold Council said. Investment and jewelry demand, which account for 80 percent of purchases in the country, reached 423 metric tons in 2009, while domestic mine supply was 314 tons, according to the group's data.

"China has an insatiable appetite for gold, which looks likely to continue in an environment where domestic mine supply lags behind demand," the council said in a report today.

Holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, were unchanged at 1,124.65 tons on March 26, its Web site showed.

Among metals for immediate delivery in London, silver increased 1.4 percent to $17.1375 an ounce. Palladium added 0.9 percent to $462.02 and platinum advanced 0.7 percent to $1,608 an ounce.

©2010 Bloomberg News

Gold prices were rising Tuesday as its safe haven asset appeal returned.

Gold for April delivery was rising $10.60 to $1,116 an ounce at the Comex division of the New York Mercantile Exchange. Prices have traded as high as $1,116.80 and as low as $1,108.10. The U.S. dollar index was slipping 0.26% to $80.04. Gold's spot price was rising $13.60 according to Kitco's gold index.

Investors were buying gold as an alternative investment as they sought the safety of a hard asset over struggling currencies. Details are still scarce over the E.U.'s multibillion euro bailout for Greece, but Spain is now at risk for losing its triple-A credit rating from Moody's along with the U.S., U.K., France and Germany. With the precedent being set that no member of the eurozone will be allowed to default, many analysts are anticipating further euro debasement and subsequent inflation.

Already in 2010 the euro has sunk 4% against the dollar, according to Joe Manimbo, currency trader market analyst at Travelex Global Business Payments. The percentage loss has been mainly due to Greece and its fiscal crisis. Nicole Gelinas, senior fellow at Manhattan Institute for Policy Research, argues that at some point the stronger states won't be able to handle the debt burden "and then you see inflating your way out of it. Instead of individual default you have one big default through inflation."

"Given the scale of background concerns, including EU debt, fiscal deficits, U.S. credit ratings and inflation sentiment ... the precious metals complex seems set to remain volatile," says James Moore, analyst at thebulliondesk.com in his daily metals report. "Encouragingly, gold has held above $1,100 an ounce, and we expect dips ... to find further scaled down buying interest."

Although further currency debasement could help support higher gold prices, global rate hikes might provide some short term downside. After China's higher-than-expected inflation reading, analysts are expecting the government to raise interest rates to control economic expansion. Over in the U.S., the Federal Open Market Committee will release its rate decision at 2:15 p.m. ET.
Although economists expect rates to stay low at zero to 0.25%, investors are looking for signs that the Fed will tighten rates sooner-than-expected. Gold historically is bought by investors as a hedge against inflation, and any signs that governments will end the flow of free money will weigh on prices.

Feb. 26, 2010, 8:23 a.m. EST

By Deborah Levine, MarketWatch

NEW YORK (MarketWatch) -- Gold prices gained some ground on Friday, adding to Thursday's gains, as the U.S. dollar fell versus the euro and traders noted a sense of returning willingness among investors to buy risky assets, including commodities.
old futures for April delivery inched up 80 cents to $1,109.30 an ounce.

Prices jumped on Thursday but are still headed for a weekly decline.

"The metal is likely to continue to track the euro and broad risk sentiment in the coming sessions; however, dips are expected to draw further strong support from both jewelry and investment players and should provide a floor," said analysts at TheBullionDeskcom.

The euro rose to buy $1.3574, from $1.3554 in late New York trading on Thursday.

The dollar recovered some ground as equities dipped, and may be sensitive to a slew of U.S. data expected during the session. A revision to fourth-quarter economic growth, an existing-home sales report and a final reading on consumer confidence will be watched closely as investors are still assessing the U.S. economy's ability to grow.

(Reuters) 11 February 2010,

Gold’s decade-long bull run may plateau in the medium term as a rise in US interest rates from record lows makes prices vulnerable to a dollar recovery and weaker investment demand.

While ongoing fears over the stability of paper currencies and inflation may keep gold at high levels, it will struggle to maintain the soaring investment flows that took it to an all-time high of $1,226.10 an ounce in December, analysts say.

In the short term, gold’s underlying fundamentals look fragile as jewellery demand languishes and miners lift supply. Spot prices had retreated from their December highs to around $1,076.50 an ounce by early afternoon on Wednesday.

“We see a number of headwinds for investors in gold, most notably potential increases in rates,” said RBS Global Banking & Markets analyst Daniel Major. “The opportunity cost of investing in commodities is going to important.”

“RBS currency strategists are forecasting further strength in the dollar against the euro and potential rate hikes in the second half of next year,” he added. “Both of those are potentially negative factors for gold investment.”

Gold’s bull run since early 2001 has gone hand-in-hand with dollar weakness, but the U.S. unit has firmed since December as fears over rising euro zone debt levels knocked the euro.

But moves in U.S. interest rates from current record lows will be the main driver of the dollar, and consequently gold.

A Reuters poll released earlier this week showed primary dealers believe the U.S. Federal Reserve will start lifting rates in the fourth quarter of 2010.

While gold may be able to shrug off a rebound in the dollar if other factors emerge, analysts are sceptical it will make significant new gains in such an environment.

“You can be a gold bull and still believe in rising interest rates if you believe in inflation, which a lot of gold bulls do,” said Daniel Sacks, a portfolio manager at Investec Asset Management. “We’re not convinced.”

“You can see the point that a huge increase in money supply, you’d think, would cross over into inflation, but it is not clear whether that mechanism will hold or not.”
Demand Uncertain, Supply Seen Rising

Gold’s gains have also been boosted by limits on official sector sales and, more recently, central bank buying.

India bought 200 tonnes of gold late in 2009, and news of heavy Chinese buying broke earlier in the year. But analysts say more central bank buying is unlikely at elevated prices levels.

Gold miners’ buy-backs of forward sales are also unlikely to remain a significant source of demand as only one large miner, AngloGold Ashanti, still holds significant hedge positions.

Miners are responding to rising prices by upping production.

In December the world’s biggest miner Barrick Gold, said its output should continue to trend higher past 2010, while number two gold miner Newmont Mining said it sees output climbing 5-10 percent this year.

“High prices have massively incentivised additional exploration, and there are a lot of new gold mines coming on stream,” said Natixis analyst Nic Brown. “We see supply increasingly substantially in the immediate years ahead.”

Meanwhile jewellery consumption, which typically makes up two-thirds of global demand, fell 23 percent last year as high prices put off buyers, metals consultancy GFMS estimates.

While this was outweighed by a sharp rise in investment demand, a retreat in holdings of gold-backed exchange-traded funds in the early weeks of the year is worrying analysts.

There is however a significant upside risk to prices. Further worries over broad-based currency devaluation based on lingering instability in the financial markets could see interest in gold rise as an alternative store of value.

“Every currency in the western world is being devalued,” said Eddington Asset Management’s chief investment officer Alex Allen. “Therefore gold has some kind of value to investors.”

5 Feb 2010, 1507 hrs IST, REUTERS

MUMBAI: India's gold buying continued on Friday afternoon, with limited quantities changing hands as prices hit fresh three-month low,
dealers said.

"Demand is still coming in but not in big lots as it did yesterday. We must have sold 300-400 kgs yesterday and most of the orders got triggered at $1,060-1,075 (an ounce)," said a dealer with a state-run bank
in Mumbai.

Demand has slowly picked up from late Thursday evening, dealers said.

International gold was trading at $1,054.70/1,055.70 an ounce, after hitting an intra-day low of $1,050.50, the lowest level since Nov. 2.

"I have orders in lots of 10 kgs and 40 kgs in between $1,045-1,050 (an ounce)," said another dealer with a private bank.

However, a weaker rupee, which makes the dollar-quoted asset expensive, weighed on sentiment, dealers added.

The rupee weakened on the back of a strong dollar overseas and losses in domestic equities market.

India has imported 35-40 tonnes of gold during January 1-27, up from 9.8 tonnes in the whole of the same month last year, the head of a trade body and bank dealers said.

China Post, Feb 5 2010 2:18AM
LONDON -- Gold declined for a second day in London as a stronger dollar may curb demand for the metal as an alternative investment.

The United States (U.S.) Dollar Index, a six-currency gauge of the greenback's strength, climbed to a six-month high on speculation the European Central Bank will refrain from ending emergency measures yesterday as Greece struggles to contain its deficit. Gold typically moves inversely to the U.S. currency.

“The stronger dollar tone has weighed on gold,” James Moore, an analyst at London-based TheBullionDesk.com, said in a report.

Gold for immediate delivery fell US$6.68, or 0.6 percent, to US$1,103.13 an ounce at 10:50 a.m. local time. Prices dropped 0.4 percent Wednesday. Bullion for April delivery was down 0.8 percent at US$1,103.60 on the New York Mercantile Exchange's Comex unit.

The metal slipped to US$1,102.50 an ounce in the morning “fixing” in London, used by some mining companies to sell production, from US$1,115.25 at Wednesday's afternoon fixing.

Gold holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, decreased 1.58 metric tons to 1,110.34 tons Wednesday, according to figures on the company's Web site.

Among other metals for immediate delivery in London, silver was 0.9 percent lower at US$16.2113 an ounce. Platinum fell 1.3 percent to US$1,554.05 an ounce and palladium declined 0.9 percent at US$433.50 an ounce.

Platinum may climb to US$1,700 and palladium to US$500 this year as an economic recovery fuels demand for vehicles and investor demand remains solid, Eugen Weinberg, a senior analyst with Commerzbank AG, said in a report. The metals are mainly used in automotive pollution-control devices and jewelry.

Jan Harvey Tue Feb 2, 2010 6:30am EST

LONDON (Reuters) - Gold prices rose above $1,110 in Europe on Tuesday, extending the previous session's 2 percent gains, as the dollar weakened versus the euro, prompting buying of the precious metal as an alternative asset.

Spot gold was bid at $1,112.60 an ounce at 1031 GMT (5:31 a.m. EST), against $1,105.30 late in New York on Monday. U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange rose $7.70 to $1,112 an ounce.

Gold is recovering some of last week's losses after the euro regained some lost ground against the dollar. Strength in the U.S. unit makes dollar-priced commodities more expensive for holders of other currencies.

"The recent gain of the last two days has been largely dollar-driven," said RBS Global Banking & Markets analyst Daniel Major. "After dollar strength last week, we have had a bit of a recovery in the euro."

He said an outflow of investment from gold exchange-traded funds was a risk factor for prices.

"After having very impressive inflows during most of last year, we saw 23 tonnes of redemptions from the family of gold exchange-traded funds in January," he said. "That is not particularly positive."

Holdings of the world's largest gold ETF, New York's SPDR Gold Trust, were unchanged on Monday, but fell 21.7 tonnes in January, against a rise of 63.36 tonnes in the same month a year before.

The dollar edged lower versus the euro and weakened a touch against a basket of major currencies on Tuesday.

Currency traders are awaiting the appearance of White House adviser Paul Volcker before the Senate Banking Committee at 1430 GMT to defend the administration's proposal to curb risk-trading by banks, which sparked a wave of risk aversion last week.

China's gold output rose 11.34 percent to a record of 313.98 tonnes in 2009, according to latest statistics from China Gold Association. It is the third year in a row for China to rank the first in gold production in the world, according to the association. The domestic gold sector reported 137.53 billion yuan (US$20.14 billion) of gross industrial output value in 2009, up 18.56 percent year on year. The top five production provinces were Shandong, Henan, Jiangxi, Fujian and Yunnan, contributing to 59.48 percent of the total output.
The top ten gold firms produced 148.55 tonnes of gold, or 47.31 percent of the country's total, according to the association.

A total of 4,705.90 tonnes of gold were traded on the Shanghai Gold Exchange involving 1.03 trillion yuan and about 6.81 million hands of gold futures were traded on the Shanghai Futures Exchange, involving 1.53 trillion yuan, according to the association.

China has been closing and integrating some small and obsolete gold producers. The total number of gold producers fell from more than 1,200 in 2002 to about 700 in 2009, according to the association.

China's annual gold output exceeded South Africa in 2007 for the first time to become the world's largest gold producer.

(Xinhua News Agency January 30, 2010)

Tokyo - Gold firmed on Tuesday, moving away from a two-week low marked the previous day as the dollar weakened after the Federal Reserve chief cautioned that the US economic recovery remains fragile.

Spot gold was at $1,163.95 per ounce at 03:15 GMT, up 0.6% from New York's notional close of $1,156.90.

Gold fell as low as $1,135.80 on Monday, its lowest since November 20.

US gold futures for February delivery rose 0.1% to $1,165.10 per ounce.

"A recovery in the dollar on an unwinding of dollar shorts against the euro and other major currencies is coming to a halt, and that favours gold," said Kaname Gokon, deputy general manager at Japanese commodity brokerage Okato Shoji's research section.

"Also, investors who have lagged need to buy on dips," he said, adding that gold seems to have strong support at around $1,150 per ounce after failing to fall much below $1,140.

In the currency market, the dollar edged lower, while the euro recovered from one-month lows after senior Federal Reserve officials curbed speculation of a quick rise in US rates after a promising jobs report last week.

Gold has maintained its allure as a hedge against a weakening dollar and some central banks, including India's, recently confirmed they bought gold to diversify assets.

Gold Tops $1,200 as Dollar Declines; Silver, Palladium Jump
By Claudia Carpenter and Pham-Duy Nguyen
Dec. 1 (Bloomberg) -- Gold prices topped $1,200 an ounce for the first time as the slumping dollar spurred investor demand for an inflation hedge. Silver and palladium futures jumped to 16-month highs.
Precious metals climbed as the dollar fell against a basket of currencies, partly because Dubai's credit risk declined. The Reuters/Jefferies CRB Index of 19 commodities rose to a five- week high. Morgan Stanley and BlackRock Advisors LLC increased their gold assets in the third quarter, U.S. filings show.
“There is investment demand for gold from everywhere,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “The dollar has pushed gold to new highs. Gold is in an uptrend, and there is no sign that the trend will stop.”
Gold futures for February delivery rose $17.90, or 1.5 percent, to $1,200.20 an ounce on the Comex division of the New York Mercantile Exchange. Earlier, the metal reached a record $1,204.
Silver futures for March delivery jumped 68.5 cents, or 3.7 percent, to $19.21 an ounce in New York. Earlier, the metal reached $19.30, the highest price for a most-active contract since July 15, 2008.
Palladium soared $17.75, or 4.8 percent, to $383.95 an ounce in New York. Earlier, the price reached $388.60, the highest level since July 29, 2008.
Gold has advanced 36 percent this year, more than the MSCI World Index of shares and U.S. Treasuries. The metal is headed for the biggest annual gain since 1979.
Gold ETF
Yesterday, holdings in the SPDR Gold Trust, the largest exchange-traded fund backed by bullion, increased to the highest since June 24.
Morgan Stanley's SPDR holdings increased 3.5 million shares to 6.5 million as of Sept. 30. BlackRock's holdings soared 5.9 million shares to 6.4 million. Soros Fund Management LLC also bought shares in the period.
Gold traded in euros, pounds and Swiss francs climbed to all-time highs on Nov. 27.
“Gold is the international currency,” Lesh said.
The Federal Reserve has kept benchmark interest rates close to zero percent since December in a bid to revive lending after the worst financial crisis since World War II. The U.S. government has boosted spending to combat the recession, pushing the nation's marketable debt to more than $6.9 trillion.
Inflation Concern
“With interest rates so low and a climbing deficit, there's real fear that inflation will be a salient problem,” said Michael Pento, the chief economist at Delta Global Advisors. In January, when gold slipped below $850, Pento predicted gold would reach $1,200 by year-end. “It's hard to make a bearish case for gold now,” he said on Nov. 25.
The euro rose to $1.511 against the greenback at 2 p.m. New York time. Should the euro reach $1.60, gold will soar to $1,400, said Frank McGhee, the head dealer at Integrated Brokerage Services LLC in Chicago.
Demand for bullion also has increased among governments. Central banks in India and Mauritius bought the metal from the International Monetary Fund. China and Russia also added to their holdings.
Concern over Iran's nuclear program may be another reason for gold's advance, Michael Guido, Macquarie Capital USA Inc.'s hedge-fund sales director in New York, said yesterday in a note.
The U.S., the U.K. and other European allies condemned Iran's plan to expand its nuclear program in defiance of United Nations sanctions. Some investors buy gold as a haven in times of escalating political tensions.
Hedge-fund managers and other large speculators increased their net-long position, or bets on higher gold futures, to the most since at least 1993, according to a report yesterday from the U.S. Commodity Futures Trading Commission.
The net-long position was 262,331 contracts as of Nov. 24, up 11 percent from a week earlier.
Platinum futures for January delivery climbed $26.40, or 1.8 percent to $1,486.60 an ounce in New York. The price reached $1,494.80, the highest level since Sept. 2, 2008.

Weaker dollar also helps push the precious metal to fresh highs.
November 25, 2009: 7:46 AM ET

LONDON (Reuters) -- Gold prices hit record highs at $1,180.00 an ounce in Europe on Wednesday, boosted by a report that India may consider buying more bullion from the International Monetary Fund, and the weaker dollar.
Spot gold was bid at $1,178.30 an ounce at 1022 GMT, against $1,168.90 late in New York on Tuesday.
U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange also hit a record $1,180.40 an ounce and were later up $12.80 to $1,178.60.
India's Financial Chronicle newspaper said on Wednesday that India is open to buying more gold from the IMF, which is thought to have around another 200 tons to sell.
"This, and the weaker U.S. dollar, are enough in these markets to push gold further up," said Commerzbank trader Michael Kempinski. "It should be time for a consolidation, but it doesn't come... (we are) just making new highs."
"We see $1,200 earlier than expected," he added.
The market is sensitive to speculation of further official sector buying after news in early November that India's central bank had bought 200 tons of gold from the IMF sparked a rally.
Russia, Sri Lanka and Mauritius have since also announced gold acquisitions, and traders speculate that more central banks, particularly in Asia, could be open to gold acquisitions to diversify their foreign exchange reserves.
"We have had relatively supportive news from the central banks, particularly in Asia, confirming that there is demand for gold as a means of diversifying their large foreign exchange reserves," RBS Global Banking & Markets analyst Daniel Major said.
"There is plenty more potential for central banks to buy either IMF gold or other gold in the market to try and boost their reserves."
Further gains expected
Expectations for further reserve diversification, as well as prospects for further dollar weakness and fears over inflation in 2010 have all fueled investment demand for the precious metal, and could lead to further sharp prices gains.
"Central bank and other investor demand could see gold move to $1,500/oz in the next 3-6 months," said Fairfax in a note.
Weakness in the dollar remains a major support of the gold market, with the U.S. currency dropping 0.49% against a basket of six others on Wednesday.
Traders cited several factors contributing to the dollar's fall, including talk of a large fund selling, rebalancing of the MSCI Japan share index favoring the yen, and the prospect of low U.S. rates after Federal Reserve meeting minutes.
Dollar weakness helped lift other commodities, with oil prices ticking up 0.5% and industrial metals prices climbing.
Elsewhere, holdings of the world's largest gold exchange-traded fund, the SPDR Gold Trust, rose nearly 1 ton on Tuesday to their highest since late June.
Indian gold traders meanwhile continued to stock up for weddings in anticipation of a further price rise, but the flow of scrap sales eased.
Silver was bid at $18.59 an ounce versus $18.49. Holdings of the world's main silver ETF rose 136 tons to a record 9,252 tons on Tuesday, while ETF Securities' silver exchange-traded product also hit record levels.
Platinum was at $1,464.50 an ounce against $1,444.50, while palladium was at $372 against $366.35. Holdings of ETF Securities' palladium-backed ETP rose to a record 620,359 ounces on Tuesday, and are up 11% month-on-month.

By Polya Lesova
FRANKFURT (MarketWatch) -- Gold futures rose on Tuesday, extending their winning streak into an eighth session. Gold for December delivery, the most actively traded contract, was last up $5.40, or 0.5%, to $1,170.10 an ounce in electronic trading on Globex. It earlier hit an intraday high of $1,171.70 an ounce. On Monday, December gold climbed to a record of $1,174 an ounce, as the dollar fell against its rivals and war games in Iran boosted gold's appeal as a safe-haven investment. "As a whole, gold will continue to track risk sentiment," said James Moore, an analyst at TheBullionDesk.com, adding that the next upside target is likely to be $1,180 and $1,200.

NEW YORK (CNNMoney.com) -- Gold jumped to an all-time high Wednesday as the dollar depreciated, fueling demand for the metal as a hedge against the anaemic greenback.

December gold climbed $12.10 to settle at a record high of $1,114.60 an ounce after hitting a record trading high of $1,118.60 an ounce earlier in the session.

"Overall we're still seeing strong investor interest," said Carlos Sanchez, precious metals analyst at CPM Group, adding that gold's recent rally has attracted many "short-term market participants."

Prices surged early in the session as the dollar weakened on expectations that U.S. interest rates will remain low for an extended period of time.

Gold pared gains later in the session as the dollar recovered some ground but remained near a 15-month low against rival currencies.

"The dollar continues to weaken," Sanchez said. "That's because of concerns over loose monetary policy and fiscal stimulus that is increasing money flows into financial market and the economy."

A softer dollar makes commodities that are priced in dollars such as gold cheaper for investors using other currencies.

The weak greenback has also raised concerns among many foreign central banks, since the dollar is the traditional global reserve currency. As a result, some overseas monetary policy makers are said to be looking for ways to diversify away from the dollar.

Last week, the Indian central bank bought 200 metric tons of gold from the International Monetary Fund. That raised bets that more central banks could increase their holdings of the precious metal as an alternative to the dollar.

Gold prices are also being supported by concerns about inflation. While consumer prices remain subdued, some traders say U.S. monetary and fiscal stimulus policies could spur a bout of inflation in the future.

Tangible assets like gold tend to hold value better than other types of investments when inflation is a problem.

By REUTERS
Published: November 3, 2009

Filed at 7:12 p.m. ET

TOKYO (Reuters) - Gold eased on Wednesday as investors took profits a day after it hit record highs despite the dollar's strength, but sentiment improved on bullion's growing status as a destination for a diversifying official reserves.

Spot gold was at $1,082 per ounce at 0000 GMT, down 0.2 percent from New York's notional close of $1,084.50. On Tuesday, spot gold hit an all-time high of $1,087.45.

Gold swept to a record high despite the dollar's strength as the International Monetary Fund's 200-tonne sale of gold to India's central bank underscored gold's increasing status as an official reserve and fuelled speculation that other governments, including Beijing may be ready to diversify their reserves.

Gold futures end above $1,060 an ounce as dollar falls.
By Nick Godt & Polya Lesova, MarketWatch
Nov. 2, 2009, 3:13 p.m. EST

NEW YORK (MarketWatch) -- Gold futures gained more than 1% to settle above $1,050 an ounce on Monday, as upbeat economic reports from the U.S., China and Europe put early pressure on the dollar, lifting the appeal of the precious metal.

Gold for December delivery gained $13.60, or 1.3%, to end at $1,054 an ounce on the New York Mercantile Exchange.

The contract earlier rose as high as $1,062.40 an ounce but lost ground as stocks began selling off, lifting demand for the dollar as a safe haven. After its official close on NYMEX, gold turned negative in electronic trade, recently losing 30 cents.

Gold prices fell slightly on Friday but still held onto a 3.8% advance for the month of October.

October "is traditionally a poor month for gold, unlike the seasonally stronger months of November and December," said Frank Wall, metals analyst at GoldCore, who sees last months gains as a signal that the precious metal will advance further.

By Jay Fitzgerald, Boston Herald

The price of gold yesterday hit an all-time high of $1,049 an ounce, capping a remarkable recovery in prices since this time last year, when gold sank to $700 an ounce amid concerns of a worldwide financial meltdown.

The recent upward surge in gold prices effectively resumed a relentless nine-year climb, which started off the decade at about $250 an ounce.

Due to inflation fears and a weakening dollar, some think gold could climb higher, to $1,200 or even $1,500 an ounce, though some skeptics believe there is now a "gold bubble" that could pop.

John Kattor, chief investment officer at Boston Eastern Investment Advisor, is a gold enthusiast.

"We own gold, so we are bullish," said Kattor.

But Bob MacIntosh, chief economist at Bostons Eaton Vance Management, said investors may be making a big mistake if they are buying gold to hedge against future inflation.

"I do not see inflation rising fast, at least in the foreseeable future," he said.

Charles Goyette, author of the forthcoming book "Dollar Meltdown," said the long-term trend points to strong gold prices, if only because the U.S. dollar is now so weak and other nations are questioning the long-term use of the dollar as the effective international reserve currency.

by Gary Shepherd
Deputy Editor, Portfolio Adviser

I can’t claim to be a connoisseur of daytime TV, but having been laid up in bed recently with the flu, I’ve noticed something of a trend for adverts from a myriad of specialist companies offering recession hit Britons the opportunity to swap their unwanted gold jewellery for cash.


It’s not for me to say whether or not you should take up their offer, but with the price of gold edging close to its record high of $1,030 an ounce this week, you can’t fault the business plan.


For investors, the dilemma of whether or not to allocate to the asset class depends much on their view of the economic picture going forward though there has always been the sound argument for its benefits as an inflation hedge.


ETF Securities says that the build-up in gold ETC holdings has been accelerating at a rapid pace as investors have become increasingly concerned about the structural outlook for the US dollar and are using gold to hedge this risk as government debt continues to rise and short-term US interest rates continue to fall sharply lower.


Not everyone is enamoured with this most precious of commodities. Peter Lucas, investment strategist at RBC Wealth Management, sees gold as a particularly poor long-term ‘buy-and-hold’, particularly as it pays no income and is expensive to store, while the long-term, inflation-adjusted price of gold is a flat line.


However, Lucas sets out a strong case for gold prices to climb further because, as a non-yielding asset, gold is very sensitive to interest rates and bond yields.


He says: “When interest rates are low, the opportunity cost of holding gold is also low and all other things remaining equal, the price of gold will tend to rise. But what constitutes ‘low’? My analysis indicates that when US 10-year Treasury yields are below the 10-year average of historical GDP growth, the gold price tends to rise. More specifically, the logarithm of the inflation-adjusted gold price correlates with the cumulative gap between GDP growth and bond yields.

“The bottom line here is that gold will be in a bull market (i.e. rising trend) as long as 10-year US Treasury yields remains below 4.70% (current level = 3.38%).”

An alternative view comes from Nick Price, manager of Fidelity EMEA Fund, who seems to suggest investors avoid gold altogether with an imbalance between supply and demand making platinum a more eye-catching proposition and an attractive long-term inflation hedge.

While demand for platinum remains depressed at present, he points out that its use in the automobile industry – 44% of all platinum supplied is used in the manufacture of auto-catalytic converters – means that the prospect of recovery remains high as the global economy takes tentative steps out of recession.

“I believe the rate cycle and onset of inflation will benefit precious metals,” he says.

“Although I currently maintain an underweight exposure to materials, I remain positive on the long-term outlook for platinum. Near term, platinum prices remain distressed but I firmly believe the lowest cost producers, such as Impala Platinum, will benefit from a recovery in global demand given my expectations of a pick-up in auto production. Investment demand should provide further support as platinum remains cheap relative to gold.”

Gold prices could set new record highs above $1,030 an ounce in 2009 as investors flock to the precious metal as a hedge against future inflation and a weaker dollar, according to a leading fund manager.

Investec Global Gold Funds portfolio manager Daniel Sacks said a combination of safe-haven buying of gold as an alternative to paper currencies, inflation, and a dearth of fresh mine supply in response to rising prices are set to boost bullion this year.

"We believe gold will continue to perform well in 2009 against most assets and, in U.S. dollar terms, should attempt a breach of the 2008 highs of $1,030 an ounce," he said.

The precious metal hit that level in March last year as a sharp slip in the dollar fuelled hefty gains. Dollar weakness tends to push investors towards hard assets, such as gold.

While its 2008 high was a nominal record, in inflation adjusted terms the precious metal still has scope to rise before reaching the highs it hit in the early 1980s, Sachs said.

"The price of gold is still just half of its prior peak in real terms, even after the rally of the past eight years," he said. "We see much more upside than downside risk for bullion."

(Reuters)27 May 2009 LONDON

Gold held around $950 an ounce in Europe on Wednesday, under pressure from a firmer dollar and a recovery in stock markets that diverted some investment from bullion. Spot gold was bid at $950.40 an ounce at 1158 GMT, against $951.25 an ounce late in New York on Tuesday.

“In Asian trading, the dollar index recovered slightly, which led to profit-taking in gold,” said Peter Fertig, a consultant at Quantitative Commodity Research. “Stock markets are indicating economic improvement, which also plays a role,” he added. Nonetheless, it is the dollar which is setting the tone for trade, he said.

The U.S. currency edged higher against the euro on Wednesday after a European Central Bank official said further interest rate cuts cannot be ruled out.

The dollar had already received some support after a two-year U.S. debt sale on Tuesday was met with solid demand, easing worries about investor appetite for U.S. debt. A firmer dollar generally weighs on gold, which is often bought as an alternative investment to the U.S. currency. Strength in the unit also makes dollar-priced gold more expensive for holders of other currencies.

Currency traders will be eyeing U.S. housing data due out later in the session for their impact on the dollar. Existing homes sales numbers are due out at 1400 GMT.

Longer term, analysts say gold may benefit from rising U.S. inflation once the economy begins to recover. While at present the environment is still largely deflationary, this could change rapidly once economic activity picks up. “Inflation is perhaps not the tune of this year, as demand remains weak despite all those green shoots,” said VTB Capital analyst Ivan Ivanchenko. “But given how fast the environment is changing, inflation may come much faster than many expect.”

Other commodities lent little direction to gold. Oil and most base metals prices inched higher after U.S. consumer confidence data released on Tuesday boosted the appeal of industrial raw materials.

Underlying demand for gold remained relatively quiet, with holdings of the largest bullion-backed exchange-traded fund, the SPDR Gold Trust, little changed on Tuesday. Physical gold demand in the world’s largest bullion market, India, remained sluggish meanwhile as high prices deterred buyers, traders said.

Elsewhere silver was at $14.50 an ounce against $14.55. The metal is tracking gold lower but is likely to be supported by strong investment demand, analysts said. Among other precious metals, platinum was quoted at $1,132 an ounce against $1,132, while palladium was at $227 against $229. “Platinum is still holding in a tight range and resistance at $1,160 has proven to be very robust indeed,” said VTB Capital. “More sideways trading is in store, with $1,080 being the bottom of the range.”

The metals are suffering from the downturn in the car industry, which accounts for half their annual consumption. Data showed European new commercial vehicle registrations fell 42 percent in April year-on-year on Wednesday. The board of General Motors is due to meet to review options after confirming a crucial bond exchange has fallen short of its goal to cut debt and avoid bankruptcy.

LONDON, May 15 (Reuters) - Gold held steady on Friday, but was expected to come under pressure from higher equity prices ahead of news on inflation in the United States.

Traders said gold was also becoming more more sensitive to the dollar, which when it rises makes metals priced in the U.S. currency more expensive for holders of other currencies.
Article Controls

"The inflation data later will be important for the gold market ... gold will probably take its cue from stocks and currency markets," a Europe-based trader said.

"The physical side is pretty slow, we need to see gold below $900 for that side to pick up.

Gold is used as a hedge against inflation, which erodes the value of assets.

By Moming Zhou, MarketWatch
Last update: 10:18 a.m. EDT April 28, 2009

NEW YORK (MarketWatch) -- Gold futures fell for a second session Tuesday, down nearly 2 percent as traders sold the metal and other commodities to raise cash amid growing concerns over the health of major U.S. banks and the outbreak of swine flu.
The Federal Reserve is pressuring Citigroup Inc. and Bank of America Corp. to raise more capital, The Wall Street Journal reported. Meanwhile, General Motors Corp. outlined a new turnaround plan that would leave the U.S. government controlling the automaker.

"Cash conservation seems to be foremost in traders minds," said George Gero, a precious-metals trader for RBC Capital Markets. "Sellers in gold, crude, and copper appeared from funds interested in raising cash, concerned with swine flu hurting economies and more uncertain outcome of automobile bailouts."

Gold for June delivery lost $16.50, or 1.8%, to $891.50 on the Comex division of the New York Mercantile Exchange.

In the short term, gold may remain under pressure, Commerzbank said, as India's Akshaya Tritiya holiday has ended. The religious holiday was a major driver for physical gold demand that contributed to rising gold imports in April in India, the world's biggest gold consumer

24/04/2009 2:53:40 PM TOKYO,

TOKYO, April 24 Reuters - Spot gold rose 1% on Friday after news that China's gold reserves had risen 454 tonnes since 2003 and were now the fifth largest in the world.

Gold extended gains and touched an intraday high of $911.80 per ounce, up 1% from New York' s notional close of $902.00.

China has 1,054 tonnes of gold in its state reserves, Xinhua news agency quoted Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE), as saying on Friday. (Reporting by Chikako Mogi)

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