Tuesday November 20, 2012 3:25 PM

Swiss trade data for October shows that Russian palladium shipments remained "subdued" during the month, says Barclays Capital. Analysts tend to monitor Swiss data to track movement of palladium out of Russia. Overall, the report showed that Switzerland remained a net exporter of platinum for a second month and was a net exporter of palladium, reversing the trend over the past couple of months. A breakdown of the data shows that palladium imports rose by 8% year-on-year but fell 54% month-on-month to 61,000 ounces, with shipments from Russia maintaining a steady,slower pace at 6,000, Barclays says. Shipments from Russia for the year to date are down 62% year-on-year to 142,000 ounces after totaling 550,000 for the full-year 2011, Barclays says. "Even barring a pickup in November and December, Russian shipments have slowed significantly through the course of the year, and although not conclusive evidence of reduced state stocks, the trend remains supportive." Further, the bank says that while Russian shipments to Hong Kong have picked up this year, they are not enough to offset the slowdown of shipments to Switzerland.

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

 

Market Nuggets: Report: Industrial Silver Demand To Hit Record 511.6 Million Oz. In 2014

Tuesday November 20, 2012 2:00 PM

A report released by the Silver Institute says while industrial demand for silver is expected to fall this year, it is expected to rise by an estimated 6% to a record high of 511.6 million ounces by 2014. The report was produced for the Silver Institute by Thomson Reuters GFMS. By 2014, industrial use is expected to account for 57% of total silver fabrication, which Thomson Reuters GFMS says would be the highest in its 25-year data series. The report cites a steadily improving economic outlook, strong growth in the automobile sector and recovery in the housing and construction industry. One sector of the silver industrial market expected to outperform is the use of silver in ethylene oxide plants. Silver oxide is used as a catalyst to produce EO, which is then used as an ingredient in a range of products such as polyester, the report says. Photovoltaic offtake is expected to stabilize in 2013 after a downturn in 2012, with increased demand expected in 2014, the report says. Chinese industrial demand is expected to keep growing, the report says. China accounted for just 8% of global silver industrial demand in 2000, but this had risen to 18% last year.

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

 

Market Nuggets: Triland: LME Aluminum Weakens, Falls Near Several Moving Averages

Tuesday November 20, 2012 1:38 PM

Aluminum was one of the weaker base metals Tuesday and threatened several moving averages, losing $22, or 1.1%, to $1,955 per metric ton on the London Metal Exchange as of 1:20 p.m. EST. Triland Metals says if the "downgrade of France by Moody's didn't have much of an impact, it was more the lack of incentive that was to be blamed today. Sure we had some good housing starts from the U.S., but that was tempered by a drop in building permits. Prices fell further after the London close, which coincided with a speech from (Federal Reserve Chairman Ben) Bernanke that may have brought some nervousness." U.S. housing starts rose 3.6% in October, but building permits fell 2.7%. Bernanke said worries about the fiscal cliff and debt ceiling in the U.S. may already be affecting spending decisions and thus the economy. "The metal now is challenging an important support zone where the 10-, 30- and 100-day MA actually meet," Triland says. The 10-day average lies at $1,953.75, the 30-day at $1,951.97 and the 100-day at $1,961.30. Tuesday's low is $1,952.

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

 

Market Nuggets: OptionsXpress: $1,740 Key Technical Area For Comex Gold

Tuesday November 20, 2012 12:38 PM

Gold futures could accelerate to the upside on buying that would be encouraged by a breakout through the $1,740 region, says optionsXpress. Gold exchange-traded funds “never lost their appeal with many retail traders,” with holdings recently hitting a record high, the firm says. Improvement in risk appetite has helped gold in recent sessions, including Monday. “Gold could get a boost from some defensive traders as well, due to the situation in Gaza,” optionsXpress says. “Technically, gold is running-up to a minor resistance level near the $1,740 mark. The gold market could gain some technical momentum if the $1,740 mark is broken.” Recent highs have coincided with this area, as does the 50-day moving average, optionsXpress says. The Comex December gold high for the month was $1,739.40 on Nov. 9, and the 50-day average passes through $1,743.50. “The RSI (Relative Strength Index) is still neutral, despite the rally, suggesting the market can move higher before reaching technically overbought levels,” optionsXpress concludes.

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

 

Market Nuggets: SEB Lowers 4Q Gold Forecast But Says Bullish Factors Outweigh Bearish

Tuesday November 20, 2012 10:00 AM

SEB Commodity Research says a number of factors remain positive for the gold market, but nevertheless is revising down its fourth-quarter average price forecast by $50 to $1,750 an ounce due to the inability of the market to benefit more strongly from the Federal Reserve's third round of quantitative easing. Analysts say a year-long consolidation period is the longest since the bull market in gold began in the early 2000s. "However, price-bullish factors still significantly outnumber bearish," SEB says in a monthly commodities report. "Further, gold is also tactically attractive compared to many other commodities. Provided liquidity settings remain generous, growth expectations muted and systemic risks present, we expect prices to remain high." SEB reiterated its 2013 forecasts of $1,800 an ounce for the first quarter, $1,750 for the second quarter and $1,700 for the second half.

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

 

Market Nuggets: SEB: Gold, Silver ETF Holdings Hit Record Levels; Coin Sales Picking Up

Tuesday November 20, 2012 10:00 AM

Gold and silver coin sales are showing signs of recovery, while interest in physically backed exchange-traded funds remains strong, all of which suggests the retail market is becoming increasingly concerned at the rate at which money is being printed, says SEB Commodity Research. Analysts note gold ETF holdings recently hit a record high above 2,600 metric tons. Meanwhile, while U.S. Mint gold-coin sales trailed 2011 during the first nine months of the year, they rose 18% year-on-year in October. "Moreover, by the middle of this month, they had already exceeded those for the whole of November last year," SEB says. Analysts also reported that silver ETF holdings hit a record of 18,854 tons in mid-November and U.S. Mint silver-coin sales also have picked up.

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

 

Market Nuggets: SEB Favors Platinum Group Metals Over Gold, Silver In 2013

Tuesday November 20, 2012 10:00 AM

SEB Commodity Research says it favors platinum and palladium ahead of gold and silver next year, although it cautions that the platinum group metals markets are smaller and less predictable than gold. The supply outlook for the PGMs remains "gloomy," which "may prove problematic if the global recovery were to gather momentum," SEB says. Analysts cite last week's report from PGM authority Johnson Matthey showing platinum and palladium are shifting into supply deficits this year. "It shares our view that both platinum and palladium balances will remain strained in 2013, particularly if the (economic) recovery gains momentum," SEB says. "Serious underinvestment in South African mining due to poor profitability has adversely affected both metals, while Russian supply is a major concern for palladium."

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

 

Market Nuggets: RBC's Gero: Some Comex Traders Evening Positions Ahead Of Thanksgiving

Tuesday November 20, 2012 9:07 AM

Much of the activity in gold futures may be squaring up by traders who do not want to hold positions over the U.S. Thanksgiving weekend, says George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures. This means selling by longs and buying by shorts. Meanwhile, the market is awaiting the outcome of a meeting about Greece by eurozone finance ministers and a speaking appearance by Federal Reserve Chairman Ben Bernanke. "All this is adding to investors' reasons for holding off on new commitments for now," Gero says. Additionally, Gero warns some hedge funds and others may be evening up positions into year-end, particularly due uncertainty about future U.S. tax policies. As of 9:05 a.m. EST, Comex December gold is $3.50 lower to $1,730.90 an ounce and December silver is down 14.4 cents to 33.045.

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

 

Market Nuggets: TDS: Long-Term Investors Moving Into Gold ETFs But Short-Term Specs 'On the Fence'

Tuesday November 20, 2012 8:50 AM

Investors worried about future inflation and U.S. dollar devaluation over the long term have beefed up their gold holdings lately, says TD Securities. Analysts say exchange-traded-product investors took these gold holdings to a record 84.15 million ounces last week, with silver investors hitting a record of some 612 million ounces. "In sharp contrast and despite last week's increases, specs continue to sit on the fence waiting for a clearer picture to emerge before they build on their already hefty long holdings—keeping an eye out for signals that the aforementioned catalysts are on the way and, for gold investors, signs of a break out of the current $1,700-$1,740/oz range," TDS says. Until a fresh catalyst emerges, gold and silver may behave as other risk assets, taking their cues from equities and the dollar, TDS says.

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

 

Market Nuggets: UBS: Gold Market In Range, Needs Breakout To Encourage More Participation

Tuesday November 20, 2012 8:30 AM

Gold needs to break out of its trading range to encourage more participation, says UBS. "A break to the upside would unlock those underlying positive gold views that still hold but haven't been initiated," the bank says. Technically, gold is trying to form a base after a recent sell-off, UBS says. Analysts put chart support at $1,705, then $1,684. Resistance rests at $1,739 and $1,775, with $1,796 the ultimate target. Gold's ongoing positive correlation with risk assets has made some participants more cautious about transforming their gold views into trades, UBS says. "Gold's 20-day rolling correlation with the S&P 500 Index has eased from the 0.79 high in early October, but levels are still quite elevated by historical standards." Gold also has a strong correlation with the euro, UBS adds. "At this point, a lot hinges on whether gold can break out of this recent range," the bank concludes. "A break through key resistance levels would likely be the next important trigger to get buyers to pull the trigger. Then momentum, technical and options traders will be incentivized to jump back into the market."

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

 

Market Nuggets: Gartman Sees More Central-Bank Buying Of Gold, Favors Gold/Yen

Tuesday November 20, 2012 8:13 AM

Investor and newsletter writer Dennis Gartman says he looks for central-bank buying of gold to continue and currently favors holding gold in Japanese yen terms. Central banks collectively sold between 400 and 750 metric tons of gold between 2002 and 2007, but the tide shifted and they have been "material net buyers" since 2010. "This is not a trend likely to be reversed in the next several months, or we think in the next several years," Gartman says. "Indeed, we look for the buying done in '11 to be surpassed this year, and for this year's buying to be surpassed again next year, with China likely leading the way." Gartman added to his long gold position last week by buying in Japanese yen terms. He says he favors holding gold against the yen since the party expected to win upcoming Japanese elections favors the Bank of Japan buying large sums of government debt securities. In early New York trade, gold was up 185.39 yen to 141,162.05 yen.

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