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Market Nuggets: Natixis’ Gornall Re-Elected Chairman Of LBMA

Wednesday June 20, 2012 4:16 PM

David Gornall, head of precious metals at Natixis’ London branch, was re-elected chairman of the London Bullion Market Association at the 24th annual general meeting Wednesday, the organization reports. He has been a member of the Management Committee since 2005 and has traded on the bullion market since 1979. Steven Lowe, of Bank of Nova Scotia-ScotiaMocatta, was re-elected vice chairman. Gornall, Grant Angwin of Johnson Matthey, Simon Churchill of Brinks Ltd. and Jeremy East of Standard Chartered Bank were all re-elected to the Committee. Newly elected representatives were Peter Drabwell of HSBC Bank USA NA, and Kevin Roberts of JP Morgan Chase Bank. Other continuing members include Philip Aubertin of UBS AG and Raymond Key of Deutsche Bank.

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

 

Market Nuggets: Comex Gold Pares Loss As Post-Fed Sell-Off Used As Buying Opportunity

Wednesday June 20, 2012 1:46 PM

Gold is volatile in the aftermath of a statement from the Federal Open Market Committee extending Operation Twist, with a swift sell-off quickly attracting bargain hunters. “The market is seeking direction,” says Charlie Nedoss, senior market strategist with Olympus Futures. The metal was weaker going into the statement, with traders this morning citing ideas that the Fed might stand pat or do Operation Twist, deemed less aggressive than quantitative easing. Still, further selling occurred when Twist was in fact announced, taking Comex August gold to a $1,590.50 low for the day. “It was a letdown on Operation Twist instead of QE,” says Bob Haberkorn, senior commodity broker with RJO Futures. Then traders used the pullback as a “buying opportunity” since there are still plenty of problems facing the world, such as soft economic conditions and the eurozone debt crisis, he says. “There are so many shoes that could drop,” Haberkorn says. As the market bounced back, buying accelerated around $1,605 to $1,610, Nedoss says. As of 1:28 p.m. EDT, Comex August gold was $6.30 lower at $1,616.90, but this was a bounce of $26.40 from the session low.

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

 

Market Nuggets: Barclays Maintains 'Positive View' On PGMS, Favors Palladium

Wednesday June 20, 2012 10:54 AM

Barclays Capital analysts say the pullback in platinum group metals since winter offers “attractive buying opportunities.” The bank says it maintains a “positive view” on both platinum and palladium. “But given our expectations for the palladium market to swing into deficit this year, palladium remains our preferred pick of the two PGMs,” Barclays says. “We expect palladium prices to average $700/oz in 2012 and platinum to average $1,622/oz.” Barclays looks for platinum to remain in surplus but looks for a smaller one than in 2011 at 89,000 ounces. Barclays looks for a palladium-market deficit of 218,000 ounces.

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

 

Market Nuggets: DailyFX's Vecchio: Gold, Yen Declines Hint At Reduced Hopes For Fed Easing

Wednesday June 20, 2012 10:45 AM

Weakness in the Japanese yen and gold suggest market participants have scaled back expectations for more Federal Reserve easing, says Christopher Vecchio, currency analyst at DailyFX. These markets tend to act as safe havens to the dollar when the Fed is expected to or actually implements more accommodative policy, Vecchio says. Instead, as of his research note, gold was off by 0.67% and the yen by 0.45% against the dollar. “Perhaps these are the ‘canaries in the coal mine’ for the rate decision today,” Vecchio says. “If another major easing package was expected, the U.S. dollar would be selling off across the board while gold and the Japanese yen would be posting moderate gains.” Vecchio says “we do not expect a full-blown QE3 package; but instead, we expect, at most, that the FOMC will announce an extension of Operation Twist.” This could lead to a dollar rally, similar to September when Twist was first announced, he says.

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

 

Market Nuggets: Comex Gold Slides On Liquidation On Ideas That FOMC May Stand Pat

Wednesday June 20, 2012 9:36 AM

Gold futures have tumbled ahead of the outcome of a Federal Open Market Committee meeting, with observers citing growing ideas that policy-setters won’t undertake any aggressive easing, at least yet. “Ahead of the FOMC, we had a bout of long liquidation on the open in New York,” says Afshin Nabavi, head of trading with MKS Finance. “A lot of people are thinking this time around they will not do anything.” Economic data has softened since early in the year, spurring hopes for easing at some point, although the most recent congressional testimony from Federal Reserve Chairman Ben Bernanke did not hint at an imminent easing. Edward Meir, commodities consultant with INTL FCStone, says “it seems that investors are already re-examining their view that the Fed may ‘ride to the rescue’ as gold, base metals and oil prices are all generally lower.” His own firm anticipates the Fed may stand pat with the Fed likely to “watch and wait.” And, Meir notes, many Fed watchers expect more “Operation Twist,” which is the selling of short-term securities in order to buy longer-term ones. This does not expand the Fed’s balance sheet and is not as “potent” as further quantitative easing, he says. As of 9:18 a.m. EDT, Comex August gold was $16.60, or 1%, lower at $1,606.60 an ounce. LME copper was down $67.75, or 0.9%, to $6,541.25 per metric ton.

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

 

Market Nuggets: Barclays: Investor Appetite For Gold ETPs Remains Stable

Wednesday June 20, 2012 9:08 AM

Investment appetite for gold remains stable, as reflected by holdings in exchange-traded products, says Barclays Capital. Metal held across physically backed ETPs tracked by Barclays inched up 1.9 metric tons Tuesday and now stand just 25 tons shy of the peak set in mid-March, and they are 27 tons higher for the month thus far. Silver ETPs gained 17 tons and are up by more than 200 tons for June to date as ETP investors viewed silver prices below $30 an ounce as a “buying opportunity,” Barclays says. Palladium ETPs were up by some 3,200 ounces, but are down by 6,500 for the month so far, Barclays says. Platinum ETP holdings were unchanged Tuesday but are up 15,800 ounces so far in June.

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

Market Nuggets: Turkey Refinery Added To LBMA Good Delivery List For Silver

Wednesday June 20, 2012 8:40 AM

The silver refinery of Nadir Metal Rafineri San. Ve Tic. A.Ş. of Turkey was added to the London Bullion Market Association’s Good Delivery List for silver, effective Wednesday, the LBMA says. Nadir was previously added to the Good Delivery List for gold on Dec. 8. “Nadir has satisfied the LBMA as to its ownership, history, production capability and financial standing,” the LBMA says. “It has also passed the LBMA’s exhaustive testing procedures, under which its silver bars were examined and assayed by independent referees, and its own assaying capabilities were tested.” The Good Delivery List includes refineries whose gold and silver bars are found, when originally tested, to meet the required standard for acceptability in the London bullion market. The list now includes 63 gold and 73 silver refiners.

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

 

Market Nuggets: IAI: May Aluminum Output Rises Month-On-Month But Down Year-On-Year

Wednesday June 20, 2012 8:36 AM

Global primary aluminum production was higher on a sequential basis in May but declined year-on-year, the International Aluminum Institute reports. May output totaled 2.104 million metric tons, up from 2.043 million in April. However, the May tally was down from 2.168 million in the same month a year ago. Sequentially, May production was either flat or higher in all eight of the IAI’s reporting regions.

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

 

Market Nuggets: Commerzbank: Copper Poised To Rise Whenever Eurozone Uncertainty Abates

Wednesday June 20, 2012 8:30 AM

Commerzbank describes copper’s fundamentals as constructive, with the market likely to advance if not for pressure due to uncertainty over European debt issues. On Tuesday, a report showed U.S. building permits climbed to their highest level since September 2008. “Thus the modest revival in housing construction is continuing,” Commerzbank says. The construction sector is the biggest consumer of copper. Analysts cite data from the World Bureau of Mineral Statistics saying the U.S. was the world’s second-largest copper consumer in 2011 with a market share of 9%. Meanwhile, the International Copper Study Group expects U.S. copper demand to grow 3.9% this year, even more sharply than in China. “In fundamental terms, the price of copper remains well-supported and should make noticeable gains as soon as the uncertainty in connection with the sovereign-debt crisis in the eurozone has abated,” Commerzbank says.

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

 

Market Nuggets: HSBC: Gold's Next Direction May Hinge On Outcome Of FOMC Meeting

Wednesday June 20, 2012 8:11 AM

The gold market likely will take its next cue from the outcome of a meeting of the Federal Open Market Committee Wednesday afternoon, says HSBC. The bank’s chief economist, Kevin Logan, puts the prospect of an easing at 50-50, perhaps by extending “Operation Twist.” Gold has consistently been sensitive to changes in monetary-policy expectations and actions, HSBC says. “If the FOMC announces further easing, gold prices are likely to rally, we believe,” says precious-metals analyst Jim Steel. “Much will depend not only on whether the committee decides to ease policy but also what policy option it then elects to use.” Logan looks for some type of modest easing step rather than another large-scale asset purchase program such as more quantitative easing. “If the FOMC were to adopt a modest easing policy, the upside for gold would likely be correspondingly limited, in our view,” Steel says. “Conversely, if the FOMC were to decline to hint at further easing, this could undermine gold prices, but even if bullion should drop, we believe the price will hold above USD1,600/oz.”  

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

 

Market Nuggets: HSBC: Indication Of Poor Monsoon Could Be Negative For Indian Gold Demand

Wednesday June 20, 2012 8:06 AM

Indian gold demand, which analysts say is already hurt by a strong rupee, could also be dinged by a poor monsoon, HSBC says. The bank notes that the government’s weather office has reported that the monsoon has been delayed by roughly two weeks, compared to past seasons. “Gold sales in India are highly dependent on a good monsoon, as rural India accounts for nearly two-thirds of gold jewelry purchases,” HSBC says. “Typically, a good harvest by farmers leads to an increase in the amount of jewelry purchased. With a delay in the monsoon, Indian merchants have expressed concerns that if rainfall is below normal this season, gold demand in India may decline.”

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

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