Gold Survey: ''Participants Look For Higher Gold Prices Next Week''

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Most participants in wsj News’ weekly gold survey said they look for prices to rise next week.
Analysts say that gold prices are likely to be helped in large part by continued buying to cover short positions, which speculators built up in early December.

In the wsj News Gold Survey, out of 34 participants, 17 responded this week. This was less than normal, with many still away from their desks for an extended Christmas holiday. Ten see prices up, while five see prices down and two see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical-chart analysts.

“The year-end long liquidation seems to have ended and mild short covering has taken over since the recent low on Dec. 19 as open interest declined 5% over the past four days,” said Ken Morrison, founder and editor of an online newsletter, Morrison on the Markets. “I expect a bit more short covering can carry gold a little higher into downtrend resistance at $1,230 in the week ahead.

“It's interesting to note the number of non-commercials reporting open futures positions to the CFTC (Commodity Futures Trading Commission) is the lowest level since December 2008, and down 35% y-o-y (year-on-year), while the number of commercials reporting a futures position is the highest level in at least six years. The takeaway here reinforces how specs are opting to avoid gold even as commercials feel more compelled to hedge price risk at $1,200 than at $1,600-$1,700.”


Participants each way cited technical-chart considerations. Darin Newsom, senior analyst with DTN, looks for higher prices, with Comex February gold able to hold the $1,186 low hit Dec. 19. “Weekly Stochastics are turning bullish,” he added.

Meanwhile, Ralph Preston, principal with Heritage West Financial, looks for more weakness based on the chart picture. “The highs of August and October mark a descending trend line that is clearly intact – only (a) break above this descending trend line marks a possibility back to trending bull market,” he said. “Otherwise, the risk of cascading down to $1,050 in the coming weeks remains a real possibility.”
Jim Wyckoff, chief analyst for Metals, looks for steady to weaker prices over the next week. “Technicals remain firmly in the bearish camp,” he said.


Last week, survey participants were mixed, with a slightly higher tally seeing prices down (11 down, eight up and four neutral). As of 11:30 a.m. EST, Comex February gold had gained $10.20 for the week.

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News Source: www.wsj.com

Gold Lifted By Short Covering, Softer Dollar, Improved Physical Gold Demand...

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U.S. gold futures bounced Friday on short covering helped by a weaker U.S. dollar, as well as a pickup in physical demand after recent price weakness, traders said.

As of 11:15 a.m. EST, gold for February delivery was $10.70, or 0.9%, higher to $1,204.30 per ounce on the Comex division of the New York Mercantile Exchange. March silver was up 24.4 cents, or 1.3%, to $19.43 an ounce.

Gold was on the defensive Thursday, falling to its lowest levels since June after the Federal Open Market Committee Wednesday announced the start of tapering of its program of quantitative easing. But the gold market held overnight slightly above the low from Thursday and has now reclaimed $1,200 an ounce.

Dollar strength previously contributed to the declines in gold, but the euro is now recovering, trading at $1.36735, up from $1.36609 late Thursday and a low of $1.36253 earlier Friday.

“We’ve seen the dollar fall back today. That’s caused a bit of short covering,” said Dave Meger, director of metals trading with Vision Financial Markets.

Short covering is when traders buy to offset or exit from short positions in which they previously sold on a bet for still-lower prices. The covering was helped along when the market was holding above $1,190, Meger added. This is just above the prior-day and overnight low.

“The other thing is the amount of physical Gold buying we have seen on recent dips has really picked up, particularly from China and overseas,” Meger said.

George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures, cited bargain hunting on the price pullback in addition to short covering to even out positions ahead of the weekend. Some indexing and re-balancing of positions is likely also occurring, he added.

February gold dipped to $1,186 Thursday, taking out the contract below its June low of $1,187.90. However, the more significant technical-chart support level traders have been citing is the area around $1,180. The June low for spot metal was $1,180.20, according to one price vendor. The low on a futures continuation chart was $1,179.40.

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News Source: www.reuters.com

Taper or no Taper, the Fed will never end QE: Marc Faber

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When the Federal Reserve announces its next move on Wednesday, some expect it to reduce its $85 billion monthly bond-buying program, targeting an eventual end to quantitative easing in late 2014. Others expect the Fed to begin to reduce the program in early 2014, or to finish it off by 2015. But Marc Faber has a different take altogether .

"The Fed will never end QE for good," the editor and publisher of the Gloom, Boom & Doom report said Tuesday on CNBC's "Futures Now." "They will continue because these programs, once they're introduced, usually keep on going."

The Fed will announce its decision at 12:30 p.m. EST on Wednesday, and Fed Chairman Ben Bernanke will follow that up with a 2:30 p.m. news conference. Expectations for the meeting are mixed, but more that 50 percent of Wall Streeters expect the Fed to taper its QE program in either December or January, according to the CNBC Fed Survey. As economic data have improved, many investors are guessing that the Fed no longer considers QE to be as vital as before.
(Read more: Fed taper expected sooner: CNBC survey)

But Faber said the good times cannot last.
"The economic recovery, or so-called recovery, by June of next year, will be in the fifth year of the recovery," Faber said. "So at some stage the economy will weaken again, and at that point, the Fed will argue, 'Well, we haven't done enough, we have to do more.'"

The noted bear has little admiration for the economists at the Federal Reserve.
"The Federal Reserve—all of them—could be sitting on a barrel of dynamite, and then pouring gasoline on top of it, and then light a cigar with matches, throw the match into the gasoline, and then not notice that there is any danger," Faber said. "That is the state of mind of the professors at the Fed, who never worked a single [day] in business."

And while Faber actually believes that a reduction in QE could happen, he wouldn't view it as a true tapering, as he says it will be a largely meaningless, one-time move that will eventually be reversed as the economy worsens.

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News Source: www.cnbc.com

Gold Sees Downside Correction From Recent Gains....

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Gold prices ended the U.S. day session modestly lower Wednesday, on a downside technical correction following gains scored Monday and Tuesday.  February gold was last down $3.90 at $1,257.20 an ounce. Spot gold was last quoted down $4.20 at $1258.25. March Comex silver last traded up $0.045 at $20.36 an ounce.

The market place showed little reaction Wednesday to a surprise move late Tuesday by U.S. government lawmakers to reach a bipartisan agreement on a budget deal that should avoid the debacle that occurred just a few months ago, which forced the U.S. government to shut down for two weeks. This one more unstable element taken away from a market place that has already been remarkably void of market-sensitive geopolitical uncertainty for weeks. Safe-haven gold usually benefits from geopolitical uncertainty and the trader anxiety that goes with it. Part of the reason gold has seen rough sailing the past few months is a lack of safe-haven demand.

In overnight news, reports said China’s banks increased their lending in November, which is a signal Chinese monetary officials want to continue to stimulate their economy even though the added liquidity in the financial system could be inflationary.

Traders and investors are looking forward to next week’s meeting (Dec. 17-18) of the U.S. Federal Reserve’s Open Market Committee (FOMC). Recent upbeat U.S. economic data, including a stronger-than-expected U.S. jobs report last Friday, suggest the Fed might move up its timeline for implementing a tapering of its monthly bond-buying program, also called quantitative easing, including a growing number who think the Fed will announce a tapering at next week’s FOMC meeting. The intense speculation on the precise timing of Fed tapering has done two things to the market place: It has numbed traders and investors to the actual event, which is likely to lessen its significance when it does actually occur. And the markets have already mostly factored into their price structures the Fed tapering, when it does occur.

The London P.M. gold fix is $1,260.75 versus the previous P.M. fixing of $1,266.25.
Technically, February gold futures prices closed near mid-range Wednesday and saw a corrective pullback from this week’s decent gains. While the gold market bears are in overall technical control, the bulls are making a move as the bears appear to be exhausted. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,210.10. First resistance is seen at this week’s high of $1,267.50 and then at $1,275.00. First support is seen at $1,250.00 and then at this week’s low of $1,237.40.

March silver futures prices closed near mid-range Wednesday and hit a fresh three-week high on mild short covering. Silver bears still have the overall near-term technical advantage. However, the bulls are making a move. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at $21.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $18.89. First resistance is seen at Wednesday’s high of $20.48 and then at $20.60. Next support is seen at Wednesday’s low of $20.21 and then at $20.00.


March copper closed up 265 points at 329.30 cents Wednesday. Prices closed near the session high and hit a fresh five-week high. Bulls have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 336.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 320.00 cents. First resistance is seen at 330.00 cents and then at 331.00 cents. First support is seen at 326.85 cents and then at 325.00 cents.

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News Source: www.wsj.com

Gold Ends Narrowly Mixed, as Bears Keeping Tight Grip on selling...

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Gold prices ended the U.S. day session mixed and not far from unchanged Tuesday and did hit another five-month low. Some mild short covering and a corrective bounce were offset by fresh chart-based selling as the session progressed. Traders and investors are awaiting the next data points to help drive market prices. February gold was last down $1.30 at $1,220.50 an ounce. Spot gold was last quoted up $2.00 at $1221.75. March Comex silver last traded down $0.194 at $19.09 an ounce.

Losses in the gold and silver markets were somewhat limited by the key outside markets being in a bullish daily posture for the precious metals—a lower U.S. dollar index and solidly higher crude oil prices.

This is a big week for economic data, highlighted by the European Central Bank’s monthly monetary policy meeting on Thursday and the U.S. jobs report on Friday. However, there are other key reports out this week, including Wednesday’s U.S. Federal Reserve’s beige book and Thursday’s U.S. GDP report. Traders and investors for many weeks have been obsessing about the precise timing of when the Fed will alter its monetary policy and back off from its monthly bond-buying program—called quantitative easing. Monday’s batch of generally upbeat U.S. data fell into the camp that reckons the Fed will act to taper sooner rather than later. This week’s data will provide at least some new insight on the timing of the Fed’s next move. Meantime, the ECB recently eased its monetary policy and the market place is wondering what central bank’s next move will be.

In overnight news, the OECD reported inflation in its 34 member economies fell for a third straight month in October—to 1.3% from 1.5% in September, on an annualized basis. The EU statistics agency said Tuesday the EU’s producer prices fell at the fastest rate in four years in October, at down 0.5% from September and down 1.4% from the previous year. This news is likely to keep the ECB in a very easy money policy mode, as the central bank does not want deflation to set in.

The London P.M. gold fix is $1,217.25 versus the previous P.M. fixing of $1,229.50.
Technically, February gold futures prices closed near mid-range and hit another five-month low Tuesday. Gold prices are in a five-week-old downtrend on the daily bar chart. The gold market bears have the solid overall near-term technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,258.20. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,200.00. First resistance is seen at Tuesday’s high of $1,225.80 and then at $1,234.10. First support is seen at Tuesday’s low of $1,214.60 and then at $1,200.00.

March silver futures prices closed nearer the session low and hit another fresh five-month low Tuesday. Silver bears have the solid overall near-term technical advantage. Prices are in a five-week-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $20.335 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at the June low of $18.60. First resistance is seen at Tuesday’s high of $19.335 and then at $19.62. Next support is seen at Tuesday’s low of $18.975 and then at $18.60.


March N.Y. copper closed down 200 points at 316.25 cents Tuesday. Prices closed nearer the session low. Bears have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at last week’s high of 326.85 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the November low of 313.50 cents. First resistance is seen at Tuesday’s high of 318.25 cents and then at 320.00 cents. First support is seen at Tuesday’s low of 315.80 cents and then at 313.50 cents.

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News Source: www.cnbc.com