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Market Nuggets: U.S. Mint June Gold-Bullion Coin Sales Up From May But Down Year-On-Year

Monday July 02, 2012 1:54 PM

U.S. Mint gold American Eagle gold-bullion coin sales rose for the third straight month in June but were down modestly compared to the same period a year ago. The Mint’s Web site says June gold-coin sales were 60,000 ounces, up from 53,000 in May but down slightly from 61,500 in June of 2011. Meanwhile, silver bullion-coin sales of 2.858 million were down slightly from 2.875 million in May and down from 3.402 million in June 2011. For the year to date, gold-coin sales through the end of June were 343,500 ounces, compared to 576,000 in the first six months of 2011.  Silver-coin sales were 17.392 million, compared to 22.3035 million as of the same period in 2011.

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


Market Nuggets: DailyFX’s Vecchio: ECB Decision May Be Indicator Of European Leaders’ Handling Of Debt Crisis

Monday July 02, 2012 10:44 AM

A European Central Bank decision on interest rates Thursday likely will be an indicator of whether central bankers think European leaders have done enough to stem the debt crisis, says Christopher Vecchio, currency analyst at DailyFX. “Should the ECB cut rates or announce new measures to help quell fears, it thus believes politicians have done enough to warrant further help from monetary officials; if the ECB does not change its policies, then it is a sign that the ECB believes more needs to be done by political leaders,” Vecchio says. “If the ECB cuts rates, we expect the EURUSD to trade higher towards $1.2750 and a break above suggests a move towards $1.2820. Should the key rate hold, we can look lower towards $1.2480 then $1.2440 before buying interest returns."

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


Market Nuggets: TD Securities: Gold Trims Losses After Soft U.S. Manufacturing PMI

Monday July 02, 2012 10:33 AM

Gold pared its losses after a weak U.S. manufacturing report, says TD Securities. The manufacturing Purchasing Managers Index fell to 49.7 in June from 53.6 in May, its first time below the key 50 level since July 2009. “Very poor numbers and with the manufacturing number coming in under 50, the United States may be on the edge of economic contraction,” TDS says. “This is not good for the industrial metals, but gold may benefit if ‘QE3’ (third round of quantitative easing) starts to hit the press.” Comex August gold is $8.80 lower to $1,595.40 an ounce but up from a $1,587.40 low.

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


Market Nuggets: RBC’s Gero: Comex Gold Falls On Profit Taking, Some Reservations About Bailout

Monday July 02, 2012 10:06 AM

Comex gold is softer on some “understandable profit taking” after a sharp run-up Friday, says George Gero, vice president and precious-metals strategist with RBC Capital Markeats Global Futures. He also cites caution as some nations appear to have reservations about the most recent European bailout measures. There are news reports that Finland and the Netherlands oppose European Stability Mechanism bond buying. This has been cited as a factor pressuring the euro, along with high unemployment in eurozone nations. As of 9:52 a.m. EDT, the euro was down to $1.2600 from $1.2660 late Friday. Comex August gold was $11 lower at $1,593.20 an ounce.

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


Market Nuggets: R.J. O’Brien: China Assumes ‘Massive’ Role In Aluminum Market

Monday July 02, 2012 10:05 AM

China’s role in the world aluminum market has been “massive” in the last decade, says a report from R.J. O’Brien & Associates. The firm cites data from the World Bureau of Mineral Statistics showing that the average aluminum-demand growth rate for China from 2000 to 2012 was 18%, compared to 1% for the rest of the world. China’s use of aluminum has grown faster than for other metals, encouraged by readily available “cheap” aluminum. “Once aluminum smelters are built, other industries are attracted (semis producers, building parts manufacturers, etc.),” R.J. O’Brien says. “Aluminum is a preferred building material and has made inroads against other materials (particularly copper) in wire and tube applications.” R.J. O’Brien says a shift from construction to consumer based-applications will fuel further strong growth over the next 10 years. “China has been largely self-sufficient in aluminum metal and semis and in fact has become a growing net exporter of semis,” R.J. O’Brien adds. The firm notes China added some 19 million metric tons per year to capacity from 2000 to 2010.

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


Market Nuggets: R.J. O’Brien: Nickel Fundamentals Bearish As Supply Rises But Demand Falling

Monday July 02, 2012 9:44 AM

The fundamentals for nickel would appear bearish going forward, says R.J. O’Brien & Associates. “Supply is rising from the new greenfield projects while demand is falling and stainless steel producers are cutting back production around the world,” R.J. O’Brien says. “Stainless accounts for 60% to 65% of total nickel demand. We are also entering what is traditionally a slow demand period during the summer months.” This reduction in stainless demand should produce a cutback in nickel supply. “But the worry at present is that it won’t. On that view nickel prices could easily fall below $16,000 per (metric) ton in coming weeks. This pessimism centers around the fact that Chinese nickel pig iron producers still seem to be pushing ahead with their plans to expand capacity this year by at least another 30,000 tons.” Still another bearish factor is the excess level of nickel stocks within China and elsewhere.

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


Market Nuggets: Barclays: Base-Metals Focus Likely To Return To Headwinds Facing Global Economy

Monday July 02, 2012 9:02 AM

Base metals are likely to run into the same old headwinds, say analysts with Barclays Capital. The complex rose sharply with the broader markets Friday after a European Summit on debt measures exceeded market expectations. The bank also notes that China’s manufacturing Purchasing Managers Index was not as weak as feared. “That said, whilst there might be some more short covering to come, we believe that before long the market’s attention will refocus once again on the many headwinds facing the global economy,” Barclays says. “In particular for the base metals we believe that a growing skepticism over the likelihood for a strong rebound in Chinese growth in H2 will weigh on prices.” Base metals are mixed so far Monday, with copper, aluminum and nickel modestly lower but zinc, lead and tin higher.

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


Market Nuggets: Morgan Stanley Still Upbeat On Gold In Medium To Long Term

Monday July 02, 2012 8:42 AM

Morgan Stanley remains upbeat on gold, which fell to its lowest level in four weeks last week before rising sharply Friday during a surge by the broader markets. Previously, a stronger U.S. dollar had weighed on gold. “We still like the medium- to long-term outlook for gold against low interest rates and safe-haven demand,” Morgan Stanley says. “We would be positive in the short term if the EUR responds well to the latest agreement or if the U.S. Fed decides to support the ailing U.S. economy through more unconventional policy.” Morgan Stanley lists gold and the agricultural markets as its preferred commodities. “Despite crude's price weakness in recent weeks, we cannot make a compelling case to get long as our estimates still show the need for OPEC to curtail production to avoid continued above-normal inventory builds,” Morgan Stanley says.

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


Market Nuggets: UBS: Rupee Movement Remains Key For Indian Gold Demand

Monday July 02, 2012 8:32 AM

The Indian rupee remains the key for gold demand from Indian, which has finally shown signs of picking up, says UBS. Prior to Friday’s rally in gold, physical buyers in India came in to scoop up cheaper metal. “Indian demand was well above average and picked up just in time, making Friday the third strongest day for Q2,” UBS says. “The 2.5% appreciation in the rupee combined with gold’s brief journey south was all local Indian buyers needed to jump in. The rupee gold price continues to linger off the highs with the currency managing to hold on to recent gains. We expect demand to remain decent near recent lows for now, but that would quickly disappear if INR weakness returns. At the moment, the direction of the rupee continues to be the main driver for physical offtake from this region.”

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


Market Nuggets: Eurozone Events Over Next Several Days To Influence Precious Metals – HSBC

Monday July 02, 2012 8:07 AM

The near-term direction of the gold and precious metals markets could be influenced greatly by eurozone events and the direction of the euro, say analysts at HSBC. The “Troika” of international leaders – the European Commission, the European Central Bank and the International Monetary Fund – is slated to return to Greece Monday, the ECB will meet Thursday to set monetary policy and the Eurogroup will discuss recapitalization plans for the Spanish banking sector July 9. They say to watch the action in the bond markets. “If spreads between peripheral EU nations narrow with German bunds, the financial markets may be more confident of the euro rally and by extension, we believe the gold rally,” they say. Yet if the euro fails, bears may become more aggressive on the idea that the euro couldn’t hold onto gains even after the positive news from Friday’s EU Summit. “Should this occur, the gold market would likely fall,” they say.

By Debbie Carlson of Kitco News dcarlson@kitco.com

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