Gold hits 1-month high as dollar falls on Fed stimulus-exit prospects...

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Gold prices climbed on Monday tailing a third consecutive gain day as reduced expectations that the U.S. Federal Reserve will soon taper the bullion-friendly stimulus program boosted the metal at the expense of the U.S. dollar.As of 03:16 ET, gold for immediate delivery climbed 1.81 percent, or 23.47 points, to $ 1,317.23 after opening at $1,296.19. Earlier in the session, it hit a high of $1,322.86 and a low of $1,296.00. 

Dollar-governed gold advanced after greenback fell against key rivals as Fed Chairman Ben Bernanke’s comments on stimulus lacked confirmation on when the central bank will start scaling back its stimulus.

Expectations the Fed will pare back its $85 billion-per-month bond purchase program took the toll on bullions. The Fed`s quantitative easing schemes have boosted gold’s appeal as a hedge against inflation.

The dollar index--a gauge measuring the strength of the greenback against a bundle of major currencies--was in a jumble in line with the recent sell-off that started with Ben Bernanke’s dovish comments last week. The USDIX fell on Monday to trade around 82.57 after opening at 82.69, hitting a high of 82.72 and a low of 82.48.

Other precious metals tracked gold higher where:

- Silver gained 2.44% to trade around $ 19.98

- Platinum went up 0.59% to $ 1,438.55

- Palladium inched 0.09% up to $ 750.70

In Japan, Japanese voters handed a landslide victory to the governing Liberal Democrats in parliamentary elections on Sunday. Prime Minister Shinzo Abe was given a solid platform to continue with his aggressive monetary stimulus push to boost the world`s third biggest economy.

By securing control of both houses of Parliament for up to three years, the win offers Prime Minister Shinzo Abe the chance to end their nation’s economic slump. A victory for Abe, whose "Abenomics" program aimed at sparking an economic revival, was widely expected.

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News Source: www.wsj.com 

US Stock Futures Point To Lower Open Ahead Of FOMC Minutes...

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It's a busy calendar on Wednesday as markets look to parse what was said at the FOMC meeting on June 18-19 to gauge the future of the U.S. Federal Reserve's bond-buying program. Investors will also have wholesale inventories data and corporate earnings figures to digest before Fed Chairman Ben Bernanke's speech, which is scheduled for later in the day.

Futures on the Dow Jones Industrial Average were down 0.09 percent, while futures on the Standard & Poor's 500 Index were down 0.15 percent and those on the Nasdaq 100 Index were down 0.14 percent.

Investors await the release, at 2:00 p.m. EDT, of the minutes of the FOMC meeting, and are likely to scour its contents for hints about the Fed's plans for its quantitative easing, or QE, program, and for insights into how much longer the current low interest-rate scenario would continue. Investors also eagerly await Bernanke's speech at the NBER Summer Institute in Boston at 4.10 p.m. EDT for direction on monetary policy decisions.

The U.S. Department of Commerce will release its wholesale inventories report, which measures the change in the total value of goods held in inventory by wholesalers, at 10.00 a.m. EDT. Inventories are expected to increase by 0.3 percent in May after a 0.2 percent growth in April.

Also, investors will continue to focus on earnings reports on Wednesday, with Fastenal Co.  and Family Dollar Stores Inc.Releasing their earnings reports before the market opens, and Yum Brands Inc. reporting its quarterly earnings after market hours.A record number of S&P 500 companies have issued negative earnings guidance for the second quarter. So far, S&P 500 companies have issued 97 negative earnings pre-announcements and only 15 positive ones, for a negative-to-positive ratio of 6.5, according to Thomson Reuters. The guidance has contributed to a downward slide in second-quarter growth estimates, with earnings per share, or EPS, currently estimated to grow 3.0 percent, down from the 8.4 percent estimated at the beginning of the year.

Elsewhere, European markets were trading down Wednesday after disappointing trade data from China reinforced signs of a slowdown in the world’s second-largest economy and investors chose to tread cautiously ahead of the release of the FOMC minutes and the Fed chairman’s speech.
The Stoxx Europe 600 index traded down 0.32 percent, London’s FTSE 100 was down 0.43 percent, Germany's DAX-30 was down 0.35 percent and France's CAC-40 was trading down 0.43 percent.
In Asia, markets ended mixed while Chinese markets ended higher, despite China's disappointing trade data, which missed analyst expectations by a wide margin and showed a steep decline in the country’s exports and imports for the month of June.

Data released by the Chinese government on Wednesday showed that exports were down 3.1 percent from a year earlier and imports were down 0.7 percent. In contrast, economists had expected exports to have grown 4.0 percent and imports to have risen 8.0 percent in June.

China's Shanghai Composite index rallied up 2.17 percent while Hong Kong’s Hang Seng Index gained 1.07 percent. Japan’s Nikkei ended down 0.4 percent, retreating from a six-week high registered in the previous session, while Australia’s S&P/ASX 200 ended up 0.4 percent. South Korea’s KOSPI Composite index lost 0.34 percent while India’s BSE Sensex ended the day down 0.79 percent.

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News Source: www.reuters.com      

If Bernanke really shakes the tree, half the world may fall out ...

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We no longer have a free market. The world’s financial asset prices have become a plaything of central banks and the sovereign wealth funds of a few emerging powers. Julian Callow from Barclays says they are buying $1.8 trillion worth of AAA or safe-haven bonds each year from an available pool of $2 trillion. Nothing like this has been seen before in modern times, if ever.

The Fed, the ECB, the Bank of England, the Bank of Japan, et al, own $10 trillion in bonds. China, the petro-powers, et al, own another $10 trillion. Between them they have locked up $20 trillion, equal to roughly 25pc of global GDP. They are the market. That is why Fed taper talk has become so neuralgic, and why we all watch Chinese regulators for every clue on policy.

We will find out tomorrow whether Ben Bernanke is ready to blink after the market ructions of the last three weeks, sobered by the cascading upsets across the Brics and mini-Brics; or whether he will stay the course with Fed tapering sooner rather than later.

Investors seem to think he will indeed blink, or at least blink enough to put off the day of reckoning for another three month investment cycle, which is what hedge funds care about, and that if he doesn’t blink it will be because the economy is picking up speed. They cling to the Bernanke Put, when the new reality may instead be the Bernanke Call.

Perhaps Bernanke will oblige one more time, knowing that the US economy has yet to absorb the full shock of fiscal tightening, the biggest squeeze for half a century. Besides, core PCE inflation is down to 1.1pc. Jim Leaviss from M&G says the Fed would normally be cutting rates by 1.5pc under the Taylor Rule in these circumstances, not tightening.

Yet what causes me to hesitate is the drip of reports and comments from key figures in – or near – the Fed seeming to suggest a loss of nerve, or who fear that QE has turned counterproductive.
First we had a paper co-written by Frederic Mishkin – Bernanke’s close friend and a former board member – warning that is becoming ever harder for the Fed to extricate itself safely from QE, and the door my shut altogether from 2014.

“Crunch Time: Fiscal Crises and the Role of Monetary Policy” said the Fed’s own capital base could be wiped out “several times” once borrowing costs spike. It said trouble could compound at an alarming pace, with yields spiking up to double-digit rates by the late 2020s. By then Fed will be forced to finance spending to avert the greater evil of default.

Then we had the minutes of the Federal Advisor Council arguing that it is “not clear” whether QE is really boosting the economy, while the toxic side-effects are all too clear. It warned of “unsustainable bubbles” in asset prices. It said zero rates are pushing pension funds underwater on their liabilities, and even claimed that QE may be causing firms to defer investment.

Since then the Bank for International Settlements has issued a full frontal attack on the credibility of QE, saying it “doesn’t work” and is doing more harm than good. Even the Boston Fed’s ultra-dove Eric Rosengren has talked of early tapering, a clear sign that the Fed’s centre of gravity has shifted.
So don’t be surprised if Bernanke talks tough tomorrow, and don’t underestimate the implications if he does. The point was put nicely by Jan Loeys from JP Morgan in a note last week:

In Fed hiking cycles over the past half century, 10-year US Treasury yields on average bottomed some 6 months before the first rate hike. In the current cycle, where rate cuts have been complemented by large-scale asset purchases, the end of the easy money period is harder to define. It is surely well before the first rate hike.

The end of the current easy money regime is set to have a bigger impact than previous ones as the current one will have lasted much longer and was much more extreme.We have learned from past regime changes that the longer they last, the more the market will have got used to them, and could even be said to become leveraged and addicted to the old regime.

In addition, after major regime changes, we find that the leverage to the old one was each time much larger and in different places than most of us had assumed. A regime change is like shaking a tree and having no idea who or what will fall out. Brazil, South Africa, and Turkey, are already falling out. Any other candidates?

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News Source: www.reuters.com                         

Fed Exit Strategy Will Be ''Treacherous''...

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As the Federal Reserve's Open Market Committee begins a two-day meeting, economist Nouriel Roubini and political scientist Ian Bremmer warned that the Fed's monetary easing exit strategy would be "treacherous" and would lead to financial instability.

"We know how the movie ended, and we may be poised for a sequel. The weak real economy and job market, together with high debt ratios, suggest the need to exit monetary stimulus slowly. But a slow exit risks creating a credit and asset bubble as large as the previous one, if not larger," they wrote in a report published in Institutional Investor magazine.

Roubini, better known as "Dr. Doom" for his pessimistic economic forecasts, and Bremmer, president of global political risk research and consulting Eurasia Group warned that the real underlying risks to the global economy were being ignored.

In the report, they warned that market complacency among politicians, investors and central banks was leading us into a "New Abnormal" era - a "period in which every market assumption must be questioned and the wise investor is prepared to be surprised."

"Unfortunately, the sense of crisis has lifted on all fronts, encouraging some to see in the changed landscape a sustainable 'new normal', a period of painfully slow but predictable economic progress," they said.

"Some believe that U.S. lawmakers can now afford to postpone tough choices, the Europeans will muddle through, China can smoothly rebalance its economy, and fires in the Middle East can simply burn themselves out. These are dangerous illusions," the authors said.

"The convulsions of the past five years arose from structural faults – financial, economic and political – that have not been fully resolved," despite the exuberance in financial markets.
There were more reasons why political and market turbulence had "plenty of room to run," the authors said, telling investors to expect more political and policy gridlock, market volatility and even another crisis as governments' monetary policies reached a crossroad.

Global markets had focused on the wrong risk triggers for the last five years, Bremmer told CNBC late on Monday."For the last five years our focus has been on the financial crisis - on the fiscal cliff, will the euro zone break down, will Japan crumble under its debt? And the reality is that those were not serious structural risks, those were much more stable places," Bremmer told CNBC's "Closing Bell."

"We have to start paying more attention to the real risks because they're growing every day, both the macro pieces that are truly in play and we've not seen anything like this in generations with global powers having very different perspectives on the market place and politics," he added.
The authors added that there were more, new worries posed by emerging markets as growth slowed there and governments were slow to implement reforms.

Bremmer warned that the relationship between China and the U.S. would be key.
"Whether we're talking about cyber, whether we're talking about market access, trade secrets of trade craft, the relationship between China and the U.S. is very difficult to manage and it's not been given priority by either the Chinese or U.S.," he said.

"A pragmatic, mutually profitable geopolitical partnership forged by the U.S. and China is our best hope if the New Abnormal is to end with a smooth landing," Bremmer and Roubini concluded.

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News Source: www.cnbc.com                           

Gold drops as traders await For FOMC...

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Gold futures fell Monday, with analysts anticipating choppy price action as traders position themselves ahead of a Federal Reserve policy meeting later this week that will be closely watched for clues to the central bank’s next monetary-policy step.

Gold for August delivery GCQ3 -0.28% fell $5.90, or 0.4%, to $1,381.70 an ounce on the New York Mercantile Exchange. Particular focus will be on the FOMC [Federal Open Market Committee] meeting, considering the recent rise in government bond yields. We think risks for gold remain to the downside as central banks are unlikely to announce more easing,” said Valérie Plagnol, strategist at Credit Suisse.

Higher bond yields can make gold less attractive because the metal carries no yield. Higher bond yields can also make for a stronger dollar, which is negative for commodities priced in the currency because it makes those goods more expensive for customers holding other currencies.

Fed Chairman Ben Bernanke in May said that policy makers could move as early as the “next few meetings” to begin paring back the monthly bond purchases at the heart of the Fed’s quantitative-easing strategy. U.S. Treasury yields have risen substantially in the weeks since those comments, sowing turmoil across asset classes as investors grappled with the prospect of a cut in the central-bank-provided liquidity credited with helping lift gold, equities and other assets in recent years.

Most analysts, however, don’t expect the Fed to announce any tapering of its bond-buying program when the policy-setting FOMC concludes its two-day meeting on Wednesday. Bernanke will hold a news conference after the conclusion of the meeting. Read: Bernanke will try to herd wild markets at meeting.    

 Some strategists contend worries over tapering are overblown. And a story last week in The Wall Street Journal indicated Bernanke wants to reassure investors that an eventual tapering of the Fed’s bond-buying program won’t be accompanied by any immediate hike in interest rates, which are expected to remain near zero.

Gold prices have suffered from concerns the Fed will scale back stimulus efforts. Gold over the past few years has benefited from fears the Fed’s aggressive stimulus efforts would debase the dollar and boost inflation.

Meanwhile, overall investor flows remain bearish, wrote analysts at Barclays. They noted that outflows from exchange-traded gold products have slowed, but that tactical investors have scaled back gold exposure during the week ended June 11. But data show gross short positions are less than one lot off the record high seen only two weeks ago, they noted, which means scope for another short-covering rally remains elevated.

“The Fed quitting its stimulus programs might be feasible if the economy were truly on a massive recovery and inflation were rising,” said Keith Springer, president of Springer Financial Advisors, in a note Friday. “However, tame inflation and lower global growth estimates from the International Monetary Fund indicate the world’s central banks won’t pull back anytime soon.”

But T. Rowe Price said it believes the Fed is on track to begin reducing the pace of asset purchases during the summer quarter.

“The labor-market outlook has improved since the program’s inception in September, downside risks in the economic outlook have diminished, and a revival in consumer-credit-card footings is among reasons to have greater confidence in forecasts of a gradually improving growth profile,” T. Rowe Price chief economist Alan Levenson said in a report late last week.

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News Source: www.marketwatch.com                             

ECB's Draghi was misunderstood on policy plan: Italy minister

FLORENCE - European Central Bank President Mario Draghi was "a little misunderstood" on Thursday and is not planning on tightening monetary policy, Italian Economy Minister Fabrizio Saccomanni said on Friday.Saccomanni's comments come after the ECB left interest rates unchanged on Thursday and said that he did not yet see the need for unconventional financing measures to lift growth."The markets interpreted some messages from the Federal Reserve to be that we are heading towards a phase of monetary tightening, and maybe the failure to reduce rates (by the ECB) was interpreted as a confirmation," Saccomanni said at a business conference in Florence."But I believe that in this case he was a bit misunderstood," said Saccomanni, who worked under Draghi at the Bank of Italy.Saccomanni said Draghi had indicated he was "willing to take more expansive measures".Short-term money market interest rates rose on Thursday after the ECB decision and Draghi's comments.Investors had been pricing in a deposit rate in negative territory, which would effectively charge banks for parking money at the ECB and help kick start lending to businesses and consumers."There is international consensus on the fact that we have yet to exit this crisis," Saccomanni said.Italy, the euro zone's third-biggest economy, is worse off than others. It is mired in its longest post-war recession, which began in mid-2011, and unemployment has hit record levels.Saccomanni said that the Italian government planned to revise, not abolish, the much-hated property tax (IMU) so that it weighed less on people with lower incomes, hopefully by the first half of August.Four-times Prime Minister Silvio Berlusconi has called for the tax to be scrapped or else his People of Freedom party will pull its support for the right-left coalition government.But Italy has promised to keep its budget deficit below 3 percent of output, and removing the tax as Berlusconi wants would cost an estimated 4 billion euros ($5.29 billion) per year.Funding of the tax reform will come from spending cuts and changes to tax breaks, Saccomanni said.($1 = 0.7564 euros. 

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China May Limit Gold to 2% of Foreign Reserves,

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China is likely to limit its gold holdings to 2 percent of its total foreign exchange reserves, said Yi Gang, a deputy Chinese central bank governor.

The People’s Bank of China last made known changes to its gold reserves in 2009, announcing that it held 1,054 metric tons. The bank hasn’t made any revisions since then. That’s about 1.8 percent of its total reserves, according to data from the World Gold Council.

“If the Chinese government were to buy too much gold, gold prices would surge, a scenario that will hurt Chinese consumers,” Yi said today in a press briefing in Beijing. “We can only invest about 1-2 percent of the foreign exchange reserves into gold because the market is too small.”
The nation’s reserves, which have surged more than 700 percent since 2004, surpassed the value of all official bullion holdings in January 2004 and rose to $3.3 trillion at the end of 2012, data compiled by Bloomberg show.

Gold has fallen about 4.7 percent this year as the U.S. stocks extended a record rally amid speculation that the FederalReserve may rein in stimulus as the recovery gains traction, curbing demand for safe-haven assets.

China was expected to displace India as the biggest gold consumer last year, according to forecast in November from the producer-funded World Gold Council. Chinese investors sought to protect their wealth by buying gold, after government measures to curb real estate prices and as China’s stock market has fallen in the past decade even though nominal gross domestic product rose fourfold.

Foreign Reserves

About two-thirds of China’s foreign reserves are dollar- denominated and another quarter is in euros, according to Yao Wei, a Hong Kong-based economist at Societe Generale SA. China is now encouraging companies and residents to keep more foreign currency in a strategy known as “hiding foreign currencies among people,” meaning that the government’s foreign reserves may “gradually fall,” Yang said.

Gold capped a 12th annual advance in 2012 and rose to a record of $1,921.15 an ounce in 2011. Gold for immediate delivery were little changed today at $1,591.95 at 6:29 p.m. Beijing time.
“We will always keep gold in mind as an option in reserve assets and investments,” Yi said. “We are able to import 500-600 tons a year, or more, but we will also take into consideration a stable gold market.”

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News Source: www.reuters.com

Gold Sharply Higher on Bargain Hunting, Short Covering, and Some Fresh Safe-Haven Demand

Gold prices are trading sharply higher and hit a two-week high in early U.S. dealings Tuesday. Heavy short covering, bargain hunting and even some fresh safe-haven demand are featured. The near-term technical posture in gold has also improved a bit Tuesday.

April Comex gold last traded up $18.00 at $1,596.00 an ounce. Spot gold was last quoted up $14.90 at $1,597.25.  May Comex silver last traded up $0.452 at $29.31 an ounce.

The stronger U.S. dollar index and U.S. Treasury prices Tuesday morning, along with weaker U.S. stock indexes, suggest investor risk appetite has pulled back a bit so far on the day. The solid jump in gold prices early Tuesday does hint that the “risk-off” day in the market place has attracted some fresh safe-haven investor demand for the yellow metal.

In overnight news, Spanish and Italian bond yields held steady following successful government debt auctions in both countries Tuesday. However, the Italian bond auction did see the government’s borrowing costs rise to a three-month high, reports said. The auctions came after the Fitch ratings agency last Friday downgraded Italy’s credit rating. Another Italian bond auction is slated for Wednesday.

The U.S. dollar hit a 3.5-year high against the Japanese yen overnight amid reports the Bank of Japan will continue on its aggressive monetary policy easing path. Asian stock markets were pressured again Tuesday following the recent spate of Chinese economic data that hints at slowing growth and rising inflationary pressures.

The U.S. dollar index is firmer Tuesday morning and hovering near a seven-month high scored last Friday. The U.S. dollar bulls have solid technical strength to suggest the dollar index can continue to trend higher in the near term. That continues to be a bearish underlying factor for gold and silver. Meantime, Nymex crude oil futures prices are near steady Tuesday. The crude oil bears still have the near-term technical advantage, and that’s also a negative for gold and silver prices.

U.S. economic data due for release Tuesday includes the Manpower quarterly U.S. employment survey, the NFIB small business optimism index, and the weekly Goldman Sachs and Johnson Redbook retail sales reports.

The London A.M. gold fixing is $1,582.50 versus the previous London P.M. fixing of $1,579.00.

Technically, April gold futures prices on Tuesday have seen a bullish upside “breakout” from the sideways trading range of the past two weeks. The bulls on Tuesday did gain some fresh upside near-term technical momentum even though the bears still have the 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 $1,619.70. Bears' next near-term downside breakout price objective is closing prices below solid technical support at the February low of $1,554.30. First resistance is seen at $1,600.00 and then at $1,610.00. First support is seen at $1,585.80 and then at the overnight low of $1,578.80.

May silver futures hit a fresh two-week high in early trading Tuesday. The bears have the overall near-term technical advantage, but the bulls are regaining a bit of upside momentum. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $29.495 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $27.925. First resistance is seen at $29.495 and then at $29.75. Next support is seen at $29.00 and then at the overnight low of $28.87.

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News Source: www.reuters.com

Wall Street rally pauses on global headwinds

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Wall Street was little changed on Monday as Italy's credit downgrade and disappointing Chinese economic data gave investors a reason to pause after last week's rally that took the Dow to record highs.
Even with the slight decline, the S&P 500 index .SPX was only about 1 percent away from its all-time closing high. U.S. stocks have seen a strong gain in the first three months of the year and pullbacks have been short lived as investors look for an opportunity to buy.
"There's a lot of pent-up demand and people seem to be buying on weakness," said Alan Lancz, president of Alan B. Lancz & Associates Inc in Toledo, Ohio.
"I don't see this as anything negative from the standpoint of what the market's done throughout 2013 so far."

The S&P is up 8.7 percent since the beginning of the year, while the Dow has climbed nearly 10 percent. Markets have been cheered by signs of improvement in the U.S. economic recovery, including recent unexpected strength in the labor market.

But a number of potential roadblocks are not far from investors' minds, including worries about the euro zone debt crisis after Fitch downgraded Italy due to the country's political stalemate.
Data over the weekend from China pointed to an uneven recovery for the world's second-largest economy as inflation rose to a 10-month high in February and factory output and consumer spending were weaker than forecast.

The Dow Jones industrial average .DJI edged down 1.95 points, or 0.01 percent, at 14,395.12. The Standard & Poor's 500 Index .SPX slipped 1.89 points, or 0.12 percent, to 1,549.29. The Nasdaq Composite Index .IXIC was off 9.56 points, or 0.29 percent, to 3,234.81.

Dell Inc (DELL.O) has agreed to give Carl Icahn a closer look at its books less than a week after the activist investor joined a growing chorus of opposition to founder Michael Dell's plan to take the world's No. 3 personal computer maker private. Dell shares were up 1.1 percent at $14.31, above the take-private offer price of $13.65.

Genworth Financial Inc (GNW.N) shares jumped 6.4 percent to $10.46 following a report by Barron's that the mortgage insurer's stock could almost double in the next year, boosted by gains in mortgage and healthcare pricing.

Dick's Sporting Goods Inc (DKS.N) slumped 7.9 percent to $46.61 after the retailer reported lower-than-expected fourth-quarter results and gave a disappointing forecast.

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GOLD OUTLOOK: Watch Retail Sales Data, Technical Chart Levels For Gold Next Week

After a much stronger-than-expected U.S. employment report, market analysts said they will keep an eye out for further proof of economic strength in the U.S., with the February retail sales seen as a harbinger. Market watchers have been looking for signs so see whether the higher taxes in the U.S. have pinched consumers’ spending habits.


Additionally, participants are keeping an eye on the $1,550 to $1,560s an ounce area for Comex April gold futures after the market held support in this region. April gold futures ended on firmer Friday, settling at $1,576.90 an ounce on the Comex division of the New York Mercantile Exchange, rising 0.293%, on the week. Most-active May silver ended higher on the day, settling at $28.948, up 1.61% on the week.

 In the  News Gold Survey, out of 33 participants, 25 responded this week. Of those 25 participants, six see prices up, while nine see prices down, and 10 see prices moving sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Gold initially fell after a much stronger-than-expected U.S. unemployment report for February. According to the Labor Department, 236,000 jobs were created last month and the unemployment rate fell two percentage points to 7.7%, a five year low.

Several analysts said that the data suggest the initial worries about tax hikes and spending cuts that went into effect in January might not have scared off employers. Also, others pointed out the increase in construction jobs matches the strength in housing data, which has also come in stronger than expected.

Gold found support just above last month’s low of $1,554 and rebounded when stocks sold off following a rise in wholesale inventories but held much of the session just above unchanged.
Rich DeFalco of 76 Partners said the jobs figure was a game-changer for him and his view on gold. “If you had asked me yesterday, I would have said up. Today, I’m totally bearish. There are too many things working against it. That unemployment number was shocking,” he said.
He said with U.S. Treasury yields and the U.S. dollar rising on the economic news, some of the market events that have been supportive for gold aren’t anymore. “It’s the opposite of the last three to four years,” he said.

After strong employment and jobs data, market watchers said next week the critical report will be retail sales as that will give a sense of how Americans are spending – or not – money in the face of higher taxes and gasoline prices. MarketWatch calls for a rise of 0.4% in retail sales.
DeFalco isn’t so sure, especially with higher gas prices. “With gas prices near $4 a gallon, it cuts into people’s disposable income…  People don’t have as much to spend on entertainment. (Winston) Churchill said ‘we drink in victory and we drink in defeat’ but we don’t drink as much when gas is $4 a gallon,” he said.

Gold analysts said they’re going to keep an eye on Asian buying, which traditionally has been a strong support for gold. Volumes on the Shanghai Gold Exchange are strong, although premiums have fallen. UBS said the fall in premiums may be the result of easing of some supply bottlenecks, rather than reduced demand.

“Should volumes remain strong in the days and weeks ahead, this would mean that this year China is forgoing the historical pattern of a slowdown in gold activity after the Lunar New Year. March is typically a strong month in terms of gold trading on the SGE,” UBS said.
Analysts said they’ll also watch the resumption of Indian wedding season in April to see what the appetite for gold is after recent strength in the rupee.
Frank Lesh, futures broker at FuturePath Trading, said it’s possible that gold could continue to hold in this range as it mulls its next direction.

“Gold has spent the past week in consolidation, unable to penetrate resistance of $1,590, but able to hold above the low of $1,554 from two weeks ago. The technical picture is still negative, but at least the liquidation pressure has subsided, for now. Dollar strength and the perception that QE (quantitative easing) could end sooner - due to the improving economic picture - rather than later remain limiting factors for gold. It was investment demand that took this market to contract highs and I continue to wonder what catalyst will bring that demand back. I expect a sideways market and further consolidation for next week,” he said.

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The opportunity to profit from the world’s largest market...

Gold Stages Impressive Rebound on Short Covering,

 

Gold Stages Impressive Rebound on Short Covering,

The gold market is posting an impressive price rebound in late-morning trading Friday. After hitting a fresh two-week low in the wake of a stronger-than-expected U.S. jobs report, a wave of short covering and bargain-hunting buying interest hit the gold market to drive prices well above unchanged. The fact that gold prices have been able to rally in the face of the bearish U.S. jobs report and amid a very strong U.S. dollar index Friday morning is very encouraging, from the bulls' point of view.

Also, gold prices dropped down to challenge strong technical support at the February low, but did not push below it, and then rebounded. That's another bullish clue that a market bottom is in place, or close at hand. A close above unchanged levels on Friday would give the bulls some confidence that a near-term market bottom is indeed in place. A  technically bullish weekly high close in gold prices on Friday would provide the bulls with better confidence the market has put in a near-term low. April Comex gold last traded up $5.00 an ounce at $1,580.00.

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George Soros's new stock picks.

The billionaire investor initiated a position of 4.1 million shares in Morgan Stanley MS -0.31% during the fourth quarter. Morgan Stanley has been struggling with profitability in recent quarters, and severely underperformed expectations at times. Fellow billionaire Dan Loeb's Third Point was also buying Morgan Stanley last quarter, reporting a position of 7.8 million shares after not owning any of the stock at the end of September (find more stocks Loeb was buying). Wall Street analysts insist that the investment bank is a good value, with their expectations implying a forward P/E of 9 and a five-year PEG ratio of 0.6.
 

Citrix Systems CTXS +0.52% , a $13 billion market cap business software and services company, was another of Soros's new stock picks. Lee Ainslie's Maverick Capital increased its own stake in Citrix in the fourth quarter of 2012, to a total of 3.8 million shares. Citrix experienced a 20% increase in revenue last quarter compared with the same period in the previous year, but slimmer margins resulted in net income only rising 5%. With the stock priced for growth at a trailing earnings multiple of 38, performance would have to improve in order for it to be a worthwhile growth stock.

Soros also liked Anadarko Petroleum APC -0.30% , buying up almost 760,000 shares of the oil and gas company. 62 filers in our database reported a position in Anadarko, which made it the most popular energy stock among hedge funds (see more energy stocks hedge funds loved). Anadarko's earnings multiples are in the teens- the trailing and forward P/Es are 17 and 15 respectively- but that represents a premium to the major oil companies and the company's revenue has actually been down. It might be worth looking at on the basis of its popularity but we aren't particularly excited about the stock.
 

The 13F disclosed a new position of about 950,000 shares in Plains Exploration & Production PXP -0.29% . The oil and gas company is an acquisition target as Freeport-McMoRan Copper & Gold FCX -0.88% plans to buy it and a related company. Many investors like to invest in merger arbitrage investments because the returns are uncorrelated with the stock market, though there are of course risks (read more about merger arbitrage strategies). Plains itself had expanded from natural gas to offshore oil assets earlier in 2012.

Ford F +0.63% rounded out the five largest new positions that Soros reported owning at 3.1 million shares. Ford's revenue edged up in the fourth quarter of 2012 versus a year earlier, and many value investors have been bullish on autos for several months. The market in general is quite pessimistic about Ford, as it trades at 9 times trailing earnings. The sell-side generally expects improvements on the bottom line with the result being that the five-year PEG ratio is a bit below 1. Appaloosa Management, managed by billionaire David Tepper, had over 11 million shares of Ford in its own portfolio at the beginning of January

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Stocks(Trade Levels)

27/02/2013

 

JPMorgan Chase& Co.  (Public, NYSE:JPM) 

Sell @48.50; Stop above@50, Target @46.50

Ford Motor Company  (Public, NYSE:F) 

Buy@ Market Price. Stop below@11.95, Target@13.20

First Solar, Inc.  (Public, NASDAQ:FSLR)

Buy@ 24.50. Stop below@22.25, Target@30.60

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