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Market Nugget: Ironbeam's Lusk: Comex Gold Recovers On Buying Of Price Dip, Bounce In Equities

Tuesday November 13, 2012 10:45 AM

Comex gold has recovered from its earlier weakness as some market participants use price dips as buying opportunities and the stock market recovers, says Sean Lusk, analyst with Ironbeam. As of 10:30 a.m. EST, December gold was still down $1.50 to $1,729.40 an ounce but was well up from the earlier low of $1,716.60 that was blamed on a stronger dollar and weaker stocks. Now, however, December stock-index futures futures are only 0.9 point lower to 1,377.30 after a 1,365.79 bottom. "At this juncture, nobody wants to be short (in gold) and dips are going to represent buying opportunities," Lusk says. "A weekly pivot number is down around $1,714.20, so on anything down in that level, you're going to see some buying." Participants still view gold as a safe haven, he says. "We had a reversal last week, so technically it's bullish to the upside," he adds.

By Allen Sykora of Kitco News; asykora@kitco.com


Market Nugget: Citi's Smith: Stronger Dollar, Technicals Nudge Comex Gold Lower

Tuesday November 13, 2012 9:39 AM

Comex gold is on the defensive as the dollar strengthens and due to technical-chart considerations, says Sterling Smith, futures specialist with Citi Institutional Client Group. Around of 9:30 a.m. EST, the December gold contract was $11.60, or 0.7%, softer at $1,719.30 an ounce. “This is mostly an outside market influence,” Smith says. “The dollar is a little bit stronger as concerns about Greece continue to plague most of the currency markets, pushing the euro lower.” The single European currency was down to $1.2682 from $1.2708 late Monday. Smith also cites the softer tone in stocks, with a risk-off environment. The December S&P 500 futures were 11 points weaker at 1,367.20. Smith describes gold as looking a “little bit tired” for now on the charts after not finding follow-through buying early this week in the aftermath of last week’s strong gains. This often prompts some short-term traders to book profits. Smith puts chart support for December gold at $1,715 and $1,700, with resistance around $1,740.

By Allen Sykora of Kitco News; asykora@kitco.com


Market Nugget: BNP Paribas: Greek Uncertainty, ZEW Index Push Euro To Two-Month Low

Tuesday November 13, 2012 8:13 AM

The euro hit its lowest level against the dollar in more than two months overnight as eurozone leaders failed to agree on another round of financing for Greece and due to a disappointing Germany ZEW investor-sentiment indicator, says BNP Paribas. "Greece's international lenders have agreed to grant the country two more years to make the cuts demanded of it, but the eurozone and IMF clashed over a longer-term target date to shrink the country's debt pile," BNP says. Finance ministers gathering in Brussels did not release more aid yet, and a draft document says they face an extra funding bill of around 33 billion euros. The exact mechanisms for filling the budget gap remain unclear, but the upbeat tone of finance ministers' meeting hints that a solution will probably be reached this month, BNP says. Still, the euro may remain "vulnerable" until there is some resolution to uncertainties regarding Greek and Spanish debt and the U.S. fiscal cliff, BNP says. Meanwhile, the German ZEW expectations index fell to minus 15.7 in November from minus 11.5 last month, while the current situation index fell to 5.4 from 10.0, BNP says. "This data bolsters recent weak data from the eurozone core," the bank adds. As of 8:07 a.m. EST, the euro was down marginally to $1.2701 from $1.2708 late Monday but has been as low as $1.2662, its weakest level since Sept. 6.

By Allen Sykora of Kitco News; asykora@kitco.com


Market Nugget: TDS: Fiscal Cliff Looms, But Precious Metals May Remain Golden Even With Resolution

Tuesday November 13, 2012 7:45 AM

Worries about the U.S. fiscal cliff have supported gold since last week’s elections, but the metal may well retain its luster even if the issue is resolved, says TD Securities. The fiscal cliff refers to the combination of $600 billion in automatic tax hikes and spending cuts early next year if Congress does not come up with a solution, and which economists say would act as a drag on the economy. “Gold’s safe-haven appeal has attracted investors in this uncertain environment despite the rising U.S. dollar, making gold more expensive for foreign buyers,” TDS says. The firm says it expects some type of resolution will ultimately be reached, meaning less concern about holding risky assets. “But if coupled with the likelihood of the Fed extending the current Operation Twist program, perhaps into a non-sterilized program, and the Fed’s tilt toward higher inflation, gold as an asset would still maintain its shine over the medium term,” TDS says. “These fundamentals would also be supportive of silver and PGMs too.”

By Allen Sykora of Kitco News; asykora@kitco.com


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