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 And Silver Subject To The FOMC Minutes...

It’s the Fed and the Fed and the Fed again. With traders are holiday around the globe and data light, the Federal Reserve is the main event. Although the FOMC minutes are a top tier event and are usually on center stage, they will have more importance to traders today as trading volume is down, news is light with politicians and traders on summer vacation and little data scheduled on the global economics calendar. This puts the FOMC minutes in the center ring under the big top. Regardless of the reading of the minutes markets should be volatile. Traders are now positioning themselves ahead of the release. Gold prices pared the initial losses as a stronger dollar and easing bond yields supported prices. Uncertainty regarding the Fed’s bond buying program also swung gold prices between gains and losses.

 Demand for US gold coins has eased in recent weeks as buying from retail investors slowed down amid recovering gold prices. Russia increased its gold reserves to 32.2 million troy ounces in July from 32 million troy ounces in June. Gold prices internationally are expected to remain in range as investors would await the FOMC meeting minutes to get cues on the future course of Fed’s bond buying program.


A recent survey showed that a majority of economists expect the Fed to announce a tapering plan in September and suggest that the Fed will cut back their asset purchases by 10 billion US dollars. Gold is trading at 1367.70 down by $4.90 in the Asian session. Gold futures recovered yesterday to close higher on COMEX, as investors were encouraged by prospects for seasonal demand from Asia as the market awaited release of the latest US Federal Reserve policy-meeting minutes.

Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, increased to 914.12 tons, as on August 20. Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 10,555.7 tons, as on August 20. Silver has taken a major tumble as trader’s book profits. Silver is down by 81 pips this morning trading at 22.99 after holding this week above the $23 price level.

The dollar index, which measures the US unit against six rivals, edged down to 81.238 from 81.255 on late Monday, after swinging between losses and gains. The dollar nose dives late yesterday to trade in the upper 80 range and rebounded this morning to trade at 81.00 Copper futures traded steadily on Tuesday but eased this morning to trade at 3.323, with traders reluctant to place large bets ahead of the release of Chinese manufacturing data and details from the Federal Reserve’s most recent policy meeting. Copper prices rose on Tuesday as a weaker dollar supported prices. However, fears of bond tapering by Fed limited the upside in prices. The global nickel market was in surplus by 74,200 tonnes in the first six months of the year, according to the International Nickel Study Group. Base metals are likely to go down on caution ahead of FOMC meeting minutes and Chinese and Euro zone manufacturing numbers tomorrow.

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News Source: www.marketwatch.com

GOLD OUTLOOK : Gold To Watch The Dollar, Bernanke Influence on Market...

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U.S. dollar direction and comments from Federal Reserve Chairmen Ben Bernanke will influence the gold market next week.The U.S. dollar’s strength was a factor in gold-price weakness this week, as the dollar index rose to its highest level since August 2010. Whether the greenback continues to rise or pulls back will determine where gold goes next week, market participants said. The dollar’s trajectory itself will likely hinge on what Bernanke says about the U.S. economy in two appearances slated over the next week.

June gold futures fell Friday, settling at $1,364.70 an ounce on the Comex division of the New York Mercantile Exchange, down 5% on the week. July silver slipped Friday, settling at $22.352 an ounce, down 5.52% on the week.

In the wsj News Gold Survey, out of 36 participants, 28 responded this week. Of those 28 participants, nine see prices up, while 17 see prices down and two see prices moving sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts..

Participants in the survey are decidedly bearish. Several who see prices falling cited the short-term technical-chart based trend with the yellow metal possibly returning to the mid-April lows in the low $1,320s. Others, though, said sentiment in gold became too bearish and they see the market finding support not far from current lows.

The dollar saw some modest weakness on Thursday, but shook that off Friday. “The main reason for the gains in the U.S. dollar over the past week is the growing belief that the Federal Reserve will scale back their asset purchase program earlier than expected. (On Thursday) Federal Reserve Bank of San Francisco President John Williams said the central bank may reduce its $85 billion in monthly bond buying as early as this summer,” said Alan Bush, senior financial futures analyst at Archer Financial.
A key part of tapering off the Fed purchases is continued improvement in employment, Williams said at the time.

Given Williams’ comment, market watchers said they are going to look closely at other Fed speakers next week to see if they also echo Williams’ statement. Of critical importance will be two speeches by Bernanke, who will speak first on Saturday about the long-term economic prospects and then in front of Congress on Wednesday, where he will also address the economy.

“Any indication that (a) tapering remains far off and (b) growth is still below where the Fed would like would hurt” the U.S. dollar, said BNP Paribas, which has been skeptical of the dollar gains.
Yet there are many others who see the dollar in a long-term uptrend and that is bearish for commodities in general since they are dollar-denominated. They said any losses in the dollar are slim and noted Friday’s move was higher again.  

“We still think the other side of that equation (relative weakness in the rest of the world) remains in play. In May, we've seen rate cuts and dovish surprises from the ECB (European Central Bank), RBA (Reserve Bank of Australia), and the central banks of Israel, Poland, Korea, India, and Turkey. The economic outlook for the rest of the world is getting worse and the U.S., while disappointing a bit recently, remains on track for a modest recovery,” said Brown Brothers Harriman.

Bob Haberkorn, senior commodities broker, RJO Futures, said the short-term trend in gold is down, although longer term he still likes gold. He said because of the dollar strength, “the path of least resistance in gold is down. I wouldn’t be surprised to see it test the April lows” of $1,321.50 basis June Comex contract.

The comments from Bernanke will be the most important event for the week, especially if he talks about the current bond-buying program, known as quantitative easing, Haberkorn said. His comments will impact not only gold, but also other financial markets such as U.S. Treasury bonds and equity markets.

As many market watchers said in recent weeks, the record highs in equities have siphoned demand away from gold and other commodities. The rise in stocks has come without a significant correction, and that’s something that worries Haberkorn and others, who said the longer equities rise without a breaking, the greater the fall will be.

BEARISH SENTIMENT OVERDONE

Not everyone is so negative on gold. In fact, some say because sentiment in gold is so beat up, that it might be time to step back in, at least for a short time. Gold has closed lower for seven consecutive sessions. Open interest on the Comex rose about 4,300 contract since May 10 through Thursday, meaning that new short positions likely were established with the price decline.

Ken Morrison, founder and editor of online newsletter, Morrison on the Markets, said since 2009, gold prices have never closed down seven days in a row. He said it’s possible that gold might see some further weakness initially next week, but he sees the market regaining strength by the end of next week.

After being bearish on gold, this is “the first time we've been bullish gold for quite some time, of the opinion the large-volume decline has about run its course,” Morrison added.

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News Source: www.wsj.com

Gold down trend hits 3-Week Low On Surging U.S. $; Fresh Chart Damage Inflicted...

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Comex gold futures ended the U.S. day session sharply lower, hit a three-week low and closed below the key $1,400.00 level Wednesday. A stronger U.S. dollar index and the weaker crude oil prices combined with a weak technical posture to pressure gold and silver prices. June Comex gold last traded down $27.80 at $1,396.70 an ounce. Future gold last prices were quoted down $27.60 at $1,398.75.  July Comex silver last traded down $0.689 at $22.69 an ounce.

Gold and silver saw intensified the selling pressure in late-morning trading Wednesday, to extend earlier losses. Sell stop orders were triggered to push June gold futures prices below key technical and psychological support at the $1,400.00 level. June gold traded down to a low of $1,389.00 on the day. The close below $1,400.00 now opens the door to a challenge of major chart support at the April spike low of $1,321.50 in June futures.

The surging U.S. dollar on the foreign exchange market and the weak raw commodity sector, in general, continue to be a bearish weight on the gold and silver markets. The U.S. dollar index hit a 9.5-month high Wednesday. A news report Wednesday said a survey of investment fund managers showed the vast majority of those money managers are shunning the raw commodity sector as an investment asset.

Reports of disappointing demand for physical gold at the peak demand season in India are also bearish for the yellow metal. Spring wedding season and a holiday this week in India have seen gold demand in that nation increase somehow, but not as much as many analysts had expected.

In other overnight news, the Euro currency fell on news of a weaker-than-expected European Union gross domestic product figure. For the sixth quarter in a row, EU GDP came in at negative growth. First-quarter EU GDP came in at minus 0.2%, compared with the fourth-quarter of last year. The GDP data from the EU suggests the European Central Bank will keep its pedal to the metal on its aggressive easing of its monetary policy.

The London P.M. gold fixing is $1,410.00 versus the previous P.M. fixing of $1,433.75.
Technically, June gold futures prices closed nearer the session low and hit a fresh three-week low Wednesday. The gold down trend is in near-term technical control and gained some downside momentum with Wednesday’s close below the key psychological level of $1,400.00. Prices are in a seven-month-old downtrend on the daily bar chart.

 The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,450.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the April low of $1,321.50. First resistance is seen at $1,400.00 and then at $1,410.00. First support is seen at Wednesday’s low of $1,389.00 and then at $1,380.00. Wyckoff’s Market Rating: 2.0

July silver futures prices closed nearer the session low, hit a fresh three-week low and closed at a fresh 31-month low close Wednesday. Silver bears are in firm overall technical control. Prices are in a seven-month-old downtrend on the daily bar chart. Bulls’ next upside Silver price breakout objective is closing prices above solid technical resistance at this week’s high of $23.84 an ounce.

 The next downside price breakout objective for the bears is closing prices below solid technical support at the April low of $21.12. First resistance is seen at $23.00 and then at Wednesday’s high of $23.45. Next support is seen at Wednesday’s low of $22.455 and then at $22.00.

May N.Y. copper closed down 235 points at 326.70 cents Wednesday. Prices closed near mid-range. The key “outside markets” were bearish for copper again Wednesday as the U.S. dollar index was higher and crude oil prices were weaker. Copper bears have the near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the May high of 339.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 320.00 cents.

First resistance for the Copper is seen at today’s high of 328.65 cents and then at 330.00 cents. First support is seen at 325.00 cents and then at Wednesday’s low of 323.55 cents.

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News Source: www.reuters.com

Sharp Gains For Gold Amid Better China Economic Data, Bullish "Outside Markets"

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Comex gold futures ended the U.S. day session with sharp gains Wednesday, boosted by upbeat economic data coming out of China and by bullish “outside market” forces—a lower U.S. dollar index and firmer crude oil prices. June Comex gold last traded up $24.20 at $1,473.00 an ounce. Spot gold was last quoted up $21.50 at $1,474.50.  July Comex silver last traded up $0.079 at $23.885 an ounce.
China on Wednesday reported a trade surplus of $18.2 billion in April compared to expectations of a $15.6 billion surplus. Both imports and exports exceeded market expectations. Asian stock markets were supported on the China news. Also, better-than-expected German industrial production data for April was reported, at up 1.2% when a 0.2% decline was expected. The better China and German data gave a boost to the raw commodity sector, including the precious metals.

The London P.M. gold fixing is $1,468.00 versus the previous P.M. fixing of $1,454.00.
Technically, June gold futures prices closed nearer the session high Wednesday as trading has become choppy. The gold bulls continue to show resilience, which is suggestive of a market bottom being in place. However, gold prices are still in a seven-month-old downtrend on the daily bar chart and the bears have the overall technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,500.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,439.70. First resistance is seen at this week’s high of $1,478.40 and then at last week’s high of $1,487.20. First support is seen at $1,460.00 and then at $1,450.00.

July silver futures prices closed near mid-range Wednesday. Silver bears are still in overall technical control. Prices are in a seven-month-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $23.00. First resistance is seen at Wednesday’s high of $24.095 and then at this week’s high of $24.42. Next support is seen at Wednesday’s low of $23.64 and then at this week’s low of $23.40.

May N.Y. copper closed up 635 points at 336.40 cents Wednesday. Prices closed nearer the session high and hit a fresh three-week high. Upbeat Chinese economic data released Wednesday also helped to boost copper prices. Copper bulls have gained upside momentum and are now on a level near-term technical playing field with the bears. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the April high of 345.25 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 Wednesday’s high of 339.00 cents and then at 340.00 cents. First support is seen at 335.00 cents and then at 332.40 cents.

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News Source: www.bloomberg.com

Gold Modestly Up on Continued Good Physical Demand and Technical Buying...

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Comex gold futures prices ended the U.S. day session modestly higher Monday. The market found support from an improving near-term technical posture of the market. Recent good demand for physical gold continues to underpin the market. June Comex gold last traded up $4.20 at $1,468.40 an ounce. Spot gold was last quoted down $1.50 at $1,469.50.  July Comex silver last traded down $0.054 at $23.96 an ounce.

For the past couple weeks several analysts have been forecasting still-lower gold prices in the coming days and/or weeks based upon the past few months of outflows of investor money from exchange traded funds (ETFs). A report Monday said the largest gold ETF has now seen around a 20% loss in investor funds since the beginning of the year. While gold may or may not decline from present price levels, the price of gold will not decline in the coming weeks based upon an event that has already occurred. That’s not the way markets work. Markets very quickly digest and factor into their prices all known fundamental news.

 Now, if money continues to flow out of gold ETFs, that would be a bearish fundamental that could drive prices lower. However, the past few months of ETF’s money outflows have already been factored into the price of gold.

In overnight news, London was closed for a public holiday, which made for quieter dealings in the foreign exchange market. The European Union overall purchasing managers’ index declined in April, but by less than forecast by economists. However, the German economy, the largest in the EU, is showing weakness. The Market composite PMI for the EU came in at 46.9 in April from 46.5 in March. A reading below 50.0 shows contraction in business activity. Gold did receive a bit of supportive news from European Central Bank president Draghi, who Monday said the ECB could continue to ease its monetary policy if the EU economies show continued weakness.

Israeli missile strikes inside Syrian territory over the weekend have attracted the attention of the market place. Any escalation in that situation would likely prompt keener risk aversion in the world market place, and possibly fresh safe-haven demand for gold.

The U.S. dollar index was higher Monday, which did limit the upside in gold. The recent rebound in the greenback is a bearish underlying factor for the precious metals markets. Meantime, Nymex crude oil futures prices were slightly higher Monday. The crude oil bulls have regained upside near-term technical momentum as prices hit a four-week high overnight. That’s a bullish underlying factor for the precious metals.

Technically,  June gold futures prices closed near mid-range Monday. The bulls continue to show resilience, which suggests a near-term market bottom is in place. However, the bulls still have much work to do to suggest a near-term price uptrend can be sustained. Gold prices are still in a seven-month-old downtrend on the daily bar chart and the bears still have the overall technical advantage. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,500.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at last week’s low of $1,439.70. First resistance is seen at Monday’s high of $1,478.40 and then at last week’s high of $1,487.20. First support is seen at Monday’s low of $1,463.80 and then at Friday’s low of $1,455.40. Wyckoff’s Market Rating: 3.5
July silver futures prices closed nearer the session low Monday.

 Silver bears are still in overall technical control. Prices are in a seven-month-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $25.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $23.00. First resistance is seen at Monday’s high of $24.42 and then at last week’s high of $24.58. Next support is seen at Monday’s low of $23.82 and then at $23.62. Wyckoff's Market Rating: 3.5.

May N.Y. copper closed down 135 points at 330.00 cents Monday. Gold Price closed nearer the session low following Friday’s big gains that do suggest a market low is now in place. Copper bears still have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at the April high of 345.25 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at 315.00 cents. First resistance is seen at Monday’s high of 332.40 cents and then at 335.00 cents. First support is seen at 328.20 cents and then at 325.00 cents. Wyckoff's Market Rating: 3.0.

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News Source: www.marketwatch.com