Kitco Market Nuggets

Market Nuggets: Goldman Maintains Its 12-Month Gold Price Forecast Of $1,940/Oz

28 March 2012, 9:30 a.m.
By Kitco News
http://www.kitco.com/

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Goldman Sachs is maintaining its outlook for gold prices, forecasting the yellow metal at $1,785 an ounce in three months, $1,840 in six months and $1,940 in 12 months, citing subdued U.S. economic growth and further quantitative easing by the Federal Reserve later this year. “We acknowledge, however, that continued strong U.S. economic data poses growing risk to our forecast for rising gold prices. Net, we reiterate our view that at current price levels gold remains a compelling trade but not a long-term investment, and we continue to recommend a long position in December 2012 Comex gold futures,” they said.

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

Market Nuggets: Gold Exchange-Traded Product Holdings Continue To Slip –Barclays

28 March 2012, 9:11 a.m.
By Kitco News
http://www.kitco.com/

Physical demand remains lackluster, and Barclays Capital says another important price-support is sagging. Exchange-traded product “holdings have started to trickle lower with metal held in trust falling by 2.1 (metric tons Tuesday). Outflows have reached 9 tons for the month to date and 12 tons shy of their peak,” the bank says.

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

Market Nuggets: Turkey's Central Bank Rule On Gold Deposits Might Not Mean More Imports - Commerzbank

28 March 2012, 8:56 a.m.
By Kitco News
http://www.kitco.com/

The Turkish central bank on Tuesday doubled the share of minimum reserves on Turkish lira-denominated deposits that banks are permitted to hold in gold from 10% to 20%, but the move might not equate with greater imports, says Commerzbank. This change “allows the central bank, among other things, to increase its gold reserves, as it means that privately held gold which was previously not ‘visible’ will now be recorded in official statistics. According to Turkish banks, Turkish private households hold gold with a value of nearly $300 billion. At a price of $1,700 a troy ounce, this is equivalent to around 5,500 tons, thus this step taken by the Turkish central bank will not necessarily result in higher gold imports,” Commerzbank says.

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

Market Nuggets: Indian Protests Over Gold Taxes Harms Metal's Price

28 March 2012, 8:50 a.m.
By Kitco News
http://www.kitco.com/

A strike by Indian jewelers over a gold import duty levied by India’s government continues for its 11th day and is hitting demand for the metal, say several analysts. James Steel, HSBC analyst, says that the Indian finance minster is standing fast on the increased duty on gold imports, but the minster may consider making an adjustment to the excise tax on gold jewelry. Steel says the excise tax on unbranded jewelry, sold mainly by small and medium-size shops, could hamper these dealers ability to comply with the tax code, citing Indian jewelers. “The removal of the excise tax may be a step towards meeting some of the grievances listed by Indian jewelers in the wake of the government budget,” Steel says. Edward Meir, commodities consultant at Intl FC Stone, says it may not be enough. “It is doubtful that this modest concession, if it indeed comes through, will be enough to cause striking Indian jewelers to terminate their walkout.... Most shops in Maharashtra and Gujarat (are) planning to remain shut at least until March 31st,” he says. Once the standoff between the government and jewelers is over, Ross Norman, CEO of Sharps Pixley, says watch what kind of appetite there is for the metal. “The amount of pent-up demand when the stores reopen would be important to gauge the physical demand from Asia, which should put a floor to the gold price,” Norman says.

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

Market Nuggets: Gold Remains Under Moving Averages, Could Stay Under Pressure – MKS Capital

28 March 2012, 8:16 a.m.
By Kitco News
http://www.kitco.com/

Gold prices were weaker overnight an in early North American dealings, having fallen under the 100- and 200-day moving averages 1686 and 1688.40 respectively, says Alex Thorndike, of MKS Capital. That corresponds with $1,696 and $1,687, respectively for Comex April gold futures. These technical chart levels “will be further topside hurdles if we are to break the $1,700 barrier,” he says. There were attempts to attack the $1,700 area on Tuesday, he adds, considering the March option expiry, but says he doesn’t think it’s in the cards this week. “Momentum up there continually waned however and with fast money specs and macros happy to book profits up above $1,690 the yellow metal remained heavy throughout the session…. Physical demand remains weak with the Indian jewelers/bullion dealers strike dragging on into its 11th day and with the end of first quarter approaching, gold could undergo further selling pressure in the short term.”

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