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Market Nuggets: Gold Facing A Test In Order To Continue Its Recent Rise - UBS

Friday August 3, 2012, 2012 9:06 AM

Gold gave back much of the gains put in last week and now the market faces a test, says Edel Tully, precious metals strategist at UBS. Momentum is falling and there is a risk that the market revisits last week’s low of $1,563.40 an ounce or the June low of $1,547.60. Near-term resistance is at $1,618.57, with stronger resistance near $1,631.60, a level which gold hasn’t overcome. While sentiment improved ahead of the central bank meetings, has the retreat in prices after the confabs returned gold “to the same old range trading behavior? We're inclined to think that given the growing friendliness to gold of late that the dips will prove to be relatively more shallow, with investors more inclined than before to pick up gold sub $1,600. Gold needs to build on its own momentum, but first it needs to see evidence of those buyers emerging at the lower levels,” she says. At 9:01 a.m. EDT, December Comex gold is up $2.10 at $1,592.80, having given back some overnight gains following a stronger than expected U.S. July employment report.

By Debbie Carlson of Kitco News; dcarlson@kitco.com


Market Nuggets: Platinum-Gold Ratio Falls To Lowest Levels Since 1985 - Barclays

Friday August 3, 2012, 2012 8:53 AM

The platinum-gold ratio is at the lowest levels since 1985, and this week the spread between the two metals widened to levels last reached in December last year, say analysts at Barclays Capital. The spread could narrow, but the trend is unlikely to reverse given the current market dynamics. Gold has struggled to move above the upper end of its trading range. Platinum, on the other hand, has been drifting lower over the past month searching for its floor. The spread between “the two metals can narrow as gold awaits its next catalyst and searches for a floor amid a weaker-than-normal monsoon and weak (Indian rupee), the outlook for platinum remains fragile in the near term. Longer term we maintain the view platinum holds the better fundamental picture,” they say.

By Debbie Carlson of Kitco News; dcarlson@kitco.com


Market Nuggets: Gold Has Support At $1,580s, Then $1,540-$1,520 Region – Leibovit

Friday August 3, 2012, 2012 8:26 AM

Gold prices have support at the $1,580 an ounce level, says Mark Leibovit, editor of the VR Gold Letter. Beyond there support comes in at the $1,520-$1,540 range which “has held gold from going over the cliff the past couple of months,” he says. While he calls himself bullish on precious metals, he warns investors to “stay alert. A washout in gold into the $1,400s or lower and a washout in silver into the high teens or low $20s cannot be discounted,” he says.

By Debbie Carlson of Kitco News; dcarlson@kitco.com


Market Nuggets: Weaker US Jobs Figure May Support Gold – HSBC

Friday August 3, 2012, 2012 7:45 AM

If Friday’s US jobs growth data is under the consensus figure of 100,000 new jobs created, gold prices might rise, says HSBC. “If the payrolls number disappoint the market and is less than expected, gold prices are likely to trade higher on expectations of further monetary easing at the upcoming Federal Open Markets Committee meeting in September, we believe,” HSBC says. The bank adds while that may be positive for higher gold prices, the metal’s recent foray under $1,600 an ounce may have dented investor confidence. “Curiously gold prices managed to pare early losses after the FOMC statement which did not announce any additional monetary easing on Wednesday … but fell harder following the European Central Bank meeting and (President) Mario Draghi’s comments. This shows gold’s sensitivity to euro movements, which fell notably following Mr. Draghi’s statements,” HSBC says.

By Debbie Carlson of Kitco News; dcarlson@kitco.com


Market Nuggets: Meager Job Growth Expected In Friday's Data – Nomura

Friday August 3, 2012, 2012 7:33 AM

Meager job growth is expected in Friday’s U.S. July employment data, says Nomura, which is looking for a lower-than-consensus jobs figure of 75,000 new jobs. The consensus is for 100,000 jobs; last month 80,000 new jobs were created. This forecast “reflects our expectation that softer aggregate demand and business caution continues to limit hiring activity,” they say, adding that they expect that the unemployment rate remained unchanged for a third straight month at 8.2%. “Incoming data releases relating to employment have remained weak, or weakened further in July. More generally, the unrelenting crisis in Europe and growing uncertainty about US fiscal policy continue to weigh on business plans for hiring,” they say.

By Debbie Carlson of Kitco News; dcarlson@kitco.com


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