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Market Nuggets: Triland: $1,525/Oz To Be ‘Really Big’ Chart Level For Gold

Wednesday April 03, 2013 2:06 PM

The area around $1,525 an ounce will be a crucial chart level for gold, says Triland Metals. The yellow metal was quiet for most of Wednesday’s session before a late-day slide took the Comex June futures as far south as $1,549.70 an ounce and spot metal to $1,550. This was the lowest level since last May for the futures and the lowest since June for spot gold. “The really big level below is $1,525, below which there may be a lot of stops,” Triland says. “For now the market is moving lower in an orderly fashion, but if $1,525 were breached, the chances are that it would be anything but orderly.”

By Allen Sykora of Kitco News asykora@kitco.com

 

Market Nuggets: Platinum Group Metals Tumble With Other Commodities

Wednesday April 03, 2013 2:06 PM

Platinum group metals tumbled with other metals and energy, says a trader. “We’re seeing a capitulation across the board in all commodities,” he says. He describes the move as driven by investors and speculators, rather than the industrial side of the PGM market. “A lot of people are pulling money out and moving to other things,” the trader adds. In particular, at the start of a new quarter, some investors have been shifting to equities, he says, although stocks are falling with commodities so far Wednesday. Technically oriented selling may have exaggerated the decline in platinum as this metal fell below its prior low from last month, although palladium remains well above the March lows. As of 1:50 p.m. EDT, Nymex July platinum was $39.20 lower to $1,535 an ounce, while June palladium was down $16.35 to $753.05. At the time, Comex June gold was $22.80 lower to $1,553.10 and Nymex crude was down $2.15 to $95.04 a barrel.

By Allen Sykora of Kitco News asykora@kitco.com

 

Market Nuggets: Kingsview's Nedoss: Comex Gold Falls Sharply As Sell Stops Hit

Wednesday April 03, 2013 1:36 PM

Comex gold slid sharply late in the pit session in a move that was largely technical in nature, says Charles Nedoss, senior market strategist with Kingsview Financial. He cited “cascading” sell stops, which are pre-placed orders activated when certain price points are hit. These were hit at $1,562.50 and under $1,556, Nedoss says. The June futures fell as far as $1,549.70, their lowest level since last May. Nedoss characterizes the selling as long liquidation. He looks for a retracement higher of some kind, commenting “you’ve gone pretty far pretty fast.” While gold is falling at the same time as U.S. equities Wednesday, previously improvement in stocks led to flows from precious metals and into equities, Nedoss says. “The money you’re seeing in the stock market is coming from somewhere,” he says. “It’s not coming from bond funds. Bonds continue to trend higher.” Market participants are shifting from safe havens such as gold and from money market funds into stocks, Nedoss says. “It’s money flows more than anything else.”

By Allen Sykora of Kitco News asykora@kitco.com

 

Market Nuggets: Nichols: Gold Short-Term Outlook Uncertain; Long-Term Bull Market Intact

Wednesday April 03, 2013 1:35 PM

Gold’s short-term prospects are uncertain but the longer-term bull market remains intact, maintains Jeffrey Nichols, managing director of American Precious Metals Advisors and senior economic adviser to Rosland Capital. He says gold bulls became “impatient,” allowing bears to take prices back below $1,600 an ounce. He says the metal could retreat further, perhaps to $1,520, describing recent selling as price sensitive and coming from exchange-traded products and futures markets. However, Nichols also says physical from China and other Asian markets remains strong and could provide a floor. “I can also tell you that central bank reserve managers are not worried their gold assets will depreciate…but many are, most definitely, worried about the prospective depreciation in the value of their U.S. dollar holdings…and this, too, will continue to underpin the price,” Nichols says.

By Allen Sykora of Kitco News asykora@kitco.com

 

Market Nuggets: SPDR Gold Trust Led Total ETF Outflows In 1Q – IndexUniverse

Wednesday April 03, 2013 10:20 AM

In the first quarter of 2013, investors sold more shares of the world's biggest bullion exchanged-traded fund, the SPDR Gold Shares (NYSEArca: GLD), than any other ETF, with outflows of $6.62 billion, according to data compiled by IndexUniverse. For the month of March, the GLD was second on redemptions list, with outflows of $1.68 billion, topped only by outflows from iShares MSCI Emerging Markets Index Fund (NYSEArca: EEM), with redemptions of $4.19 billion. The outflows compare to the more than $18 billion put into U.S. ETFs in March and over $54 billion in the entire first quarter, IndexUniverse says. The most popular fund of the quarter was the WisdomTree Japan Hedged Equity Fund (NYSEArca: DXJ), pulling in about $4 billion in assets, while the top ETF in inflows for the month of March was the iShares Core S&P 500 ETF (NYSEArca: IVV), which pulled in $2.27 billion, IndexUniverse says.

By Debbie Carlson dcarlson@kitco.com

 

Market Nuggets: Adrian Day: Platinum Group Metals Have Attractive Supply/Demand Profile

Wednesday April 03, 2013 9:20 AM

The supply/demand profile for platinum group metals is “particularly attractive,” says Adrian Day, president and chief executive officer of Adrian Day Asset Management. “Unlike gold and silver, most demand is for industrial usage, while little is for investment,” he says. More than 70% of platinum and 90% of palladium are used industrially, with the largest use being automotive catalytic converters, he says. Palladium, in particular, is benefiting from growth in China’s auto market, Day says. “The supply side is as precarious as for any major resource,” he says. South Africa and Russia are the two main producers. In the case of palladium, the market has been relying upon metal from Russian stockpiles, but this has been declining in recent years and some analysts look for it to be depleted by 2015, Day says.

By Allen Sykora of Kitco News asykora@kitco.com

 

Market Nuggets: Adrian Day: Gold Could Be Close To Turnaround

Wednesday April 03, 2013 9:20 AM

A “stretched” stock market could be vulnerable to a setback and gold could be close to a turnaround after a weak first quarter, says Adrian Day, president and chief executive officer of Adrian Day Asset Management. He also looks for a bounce in gold-mining stocks. He calls improvements in the U.S. economy “rather modest,” especially considering the time since the recession trough and amount of money thrown at the problem. “To us, the most significant aspects of the U.S. economic environment, beyond the tepid recovery, are government spending and the easy monetary policy,” he says. Any solution to government spending remains “distant,” while U.S. monetary policy remains “highly accommodative,” in the Federal Reserve’s words, Day says. Meanwhile, the European debt crisis has “vaulted back to the front pages,” with inconclusive Italian elections and the Cyprus situation. Day says he looks for global money supply to continue to expand in the year ahead. Also, the U.S. dollar may give up some of its gains against currencies other than the euro, he adds. “Though the euro may remain weak, the rally against other currencies appears stretched and we expect a reversal soon,” Day says.

By Allen Sykora of Kitco News asykora@kitco.com

 

Market Nuggets: UBS: Physical Gold Buying Picks Up But Not Enough To Offset Pressure

Wednesday April 03, 2013 8:39 AM

Physical buying is picking up again in gold, although not enough to offset the selling at the start of a new quarter, says UBS. The metal tumbled Tuesday and spot gold slipped further early Wednesday to a low of $1,563.50 an ounce, its lowest level in 3 ½ weeks. The bank links much of Tuesday’s weakness to sell stops triggered on Comex, but notes exchange-traded fund outflows are also occurring again. “Physical demand, out of Asia in particular, was quick to respond to the sub-$1600 move,” UBS says. “Our physical flows to India indicated above-average demand, indeed the strongest we’ve seen since early January. SGE (Shanghai Gold Exchange) volumes yesterday were also higher on the day at about 12 (metric) tons, although this hardly compares to the strong appetite seen in February. Overall, physical buying volumes so far have not been large enough to offset the selling. Some physical buyers are also likely sitting back to see if there’s more conviction to this move lower, opting to wait for prices to stabilize.”

By Allen Sykora of Kitco News asykora@kitco.com

 

Market Nuggets: Commerzbank Looks For Gold To Bounce In Near Future

Wednesday April 03, 2013 8:23 AM

Commerzbank looks for a bounce in gold after the metal hit its lowest level in 3 ½ weeks earlier Wednesday. The bank blames the pressure largely on selling in the futures market. Commerzbank also some positive influences for gold, starting with March U.S. Mint sales of 62,000 ounces of gold coins that is nearly the same as March of a year ago, when 62,500 were sold. “Year-on-year sales of U.S. silver coins actually surged by 32% to 3.36 million ounces,” Commerzbank says. “In addition, the Istanbul Gold Exchange reported that Turkey had imported 18.26 tons of gold in March, the highest amount for eight months. According to data released by the World Gold Council, Turkey was the world’s fourth-largest consumer of gold in 2012. We do not anticipate that the current price weakness among precious metals will last for any length of time, and expect to see higher prices again in the near future.”

By Allen Sykora of Kitco News asykora@kitco.com

 

Market Nuggets: MKS Capital: Investors Continue To Exit SPDR Gold ETF

Wednesday April 03, 2013 8:21 AM

Investors are continuing to move out of the world’s largest gold exchange-traded fund, SPDR Gold Shares, which is a worrisome trend for gold, says Jason Cerisola, head of trading for precious metals and forex with MKS Capital. Gold has now fallen around 6.5% this year after 12 consecutive annual gains, with appetite for the metal waning amid stronger economic growth and a rally in riskier assets. “It concerns me that if this liquidation continues, especially in the ETF space, we could see a much lower gold price,” Cerisola says. “At present, ETF holdings are at close to 79 million ounces of gold -- if we even see a 10% cut in global positions, I don't believe the market would be able to absorb 8 million ounces without adverse movements to the downside.” Gold holdings of SPDR dropped 8.1 metric tons Tuesday to 1,208.92 tons, the lowest level since July 2011, according to the ETF’s Web site.

By Allen Sykora of Kitco News asykora@kitco.com

 

Market Nuggets: HSBC: U.S. Auto Sales More Favorable For Palladium Than Platinum

Wednesday April 03, 2013 8:20 AM

Stronger U.S. auto data support palladium over platinum, says HSBC. Analysts cite news Tuesday that Ford and General Motors reported 6% year-on-year gains in auto sales in March, while Chrysler Group reported a 5% increase. Analysts also pointed out that Edmunds.com, a U.S. online resource for automotive information, recently raised its auto sales forecast to 15.5 million units for this year. “Edmunds.com noted that buyers were unfazed by the USD42bn in federal spending cuts that went into effect on March 1, and that they continued to purchase vehicles,” HSBC says. “The PGMs are an important component used in fabrication of auto catalysts. Vehicles in the U.S. tend to use gasoline-fired engines, which have heavier weighting in palladium over platinum, compared to vehicles in the eurozone, which tends to use diesel-fired engines with heavier weighting in platinum over palladium. Thus, stronger U.S. auto demand is more positive for palladium than for platinum, we believe.”

By Allen Sykora of Kitco News asykora@kitco.com

 

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