Oil falls in Asia after U.S. GDP report

             Crude Oil futures fell in the early part of Monday’s Asian session as traders digested a couple of slack U.S. data points that were delivered last Friday. 

On the New York Mercantile Exchange, light, sweet crude futures for June delivery fell 0.47% to USD92.56 per barrel in Asian trading Monday. Despite settling lower by 0.8% last Friday, Nymex oil futures rose 5% on the week, the biggest weekly advance since June.

U.S. data points helped force crude lower in Friday’s session. In U.S. economic news, the Commerce Department said U.S. GDP grew 2.5% in the first quarter, missing the consensus estimate of 3% growth. 

The Thomson Reuters/University of Michigan Survey of consumer confidence fell 2.8% to 76.4 in April. That reading is the same as April 2012. Economists expected a reading of 73.5. The U.S. is the world’s largest oil consumer and reports such as employment, GDP and consumer data are viewed by traders as pivotal to oil’s upside. 

Gold jumps up on technical demand, soft U.S. housing data

                     Gold prices shot up in U.S. trading on Monday amid technical demand after investors began to view the commodity as oversold and rebalanced support levels higher than those from recent weeks.

Softer-than-expected housing numbers in the U.S. also pushed up prices.

www.orangecommodities.com

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were up 1.94% at USD1,422.65 a troy ounce in U.S. trading on Monday, up from a session low of USD1,403.55 and down from a high of USD1,438.35 a troy ounce.

Gold futures were likely to test support USD1,403.55 a troy ounce, the earlier low, and resistance at USD1,590.05, the high from April 9.

Gold prices have dropped in recent months amid concerns that a more robust recovery in the U.S. will prompt the Federal Reserve to soon wind down stimulus tools, which weaken the dollar to spur investing and recovery.

Gold futures surge 2% to hit 1-week high on technical buying

            Gold futures were higher for the fourth consecutive day on Monday, moving further off last week’s two-year low as a bout of technical buying kicked in after prices broke above a key resistance level. 

Some bargain buying and indications of mounting physical demand in Asia and the U.S. also contributed to gains.

www.orangecommodities.com

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,424.15 a troy ounce during European morning hours, up 2.1% on the day.

Comex gold prices rose by as much as 2.3% earlier in the session to hit a daily high of USD1,427.15 a troy ounce, the strongest level since April 15. Comex gold fell to a 27-month low of USD1,322.25 an ounce on April 16.

Gold rises as hedge funds boost long bets

                    Gold futures are trading higher in the early part of Monday’s Asian session as some hedge funds and other speculators are seen increasing their long bets on the yellow metal despite last week’s dismal performance. 

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery advanced 0.66% to USD1,404.85 per troy ounce in Asian trading Monday. The good start to the week comes after bullion plunged in the first two trading days of last week and finished down 5.4% for the week, good for the fourth weekly slide in a row. 

www.orangecommodities.com

Gold prices were likely to find support at USD1,322.25 a troy ounce, the low from April 16 and a 27-month low and near-term resistance at USD1,425.55, Friday’s high. 

Fund managers and other traders raised their net long exposure to gold by 9.8% to 61,579 futures and options in the week ending April, according to data from the U.S. Commodities Futures Trading Commission. 

Your Gold & Silver Outlook: 2013

Your Gold & Silver Outlook: 2013

Silver prices have delivered the best gains since 2002, according to Lloyds TSB. But, of course, the key question for precious metals investors is whether gold and silver will continue to be a good performer for 2013.

What’s Happened So Far

The prices of gold and silver decreased slightly last week. This caused some notice from the media and investors. Even with the extremely concerning news coming out of Cyprus's, gold and silver didn't pull up from their downward price movement.

Gold has been trading at new lows for the year and Silver making multi-year lows. Some commentators are suggesting that the Gold/Silver bull market is over with.

The Real Deal

Although off to a rough start, we still believe Gold And Silver are paced to go higher.

Gold and silver investments may have shot up five years ago, but they have been extremely popular this year. 

In January, the United States Mint sold 7.5 Million American Silver Eagle Coins. Yet in all of 2007, the US Mint sold only sold 9.9 million American Silver Eagles. So in the first month of 2013, the US Mint sold 75% of what it did in 2007.

In fact, demand was so strong that the Mint temporarily ran out of stock and had to suspend sales for roughly 10 days. In addition, the premiums of American Gold Eagle Coins hit highs not seen since June 2010.

The US Mint is expecting to sell a record number of silver American Eagles in 2013. 

We know that to some investors, problems that surfaced during the recent recession, such as the collapse of the mortgage-backed securities market, prompted them to seek safety in tangible, versus "paper," assets. This is one of many factors boosting interest in owning physical gold and silver bullion.

Another trend that is surfacing is state legislation similar to the one passed in 2011 in Utah. This allowed Gold And Silver Bullion Coins issued by the US Mint to be used as legal tender. 

People place their gold and silver bullion coins in the Utah Gold & Silver Depository and receive a card that acts similar to a debit card which they can use to make purchases of up to 80 percent of the coins' current value. A dozen other states have been considering similar legislation.

The Outlook

Some commentators seem temped to call this gold and silver bull market dead and gone. We think differently.

The fundamentals of gold and silver have not changed. There are still Massive Amounts Of New Currency In Circulation. The United States Mint is selling record amounts of gold and silver. And most importantly, the role of gold and silver as monetary metal, not just another commodity, is beginning to resurface in states like Utah.

We haven’t seen nothin’ yet.  - Goldsilver.com

Speculators Continue To Sell Gold, Silver Futures, Options – CFTC

                            For the second week in a row, speculators shed bullish gold and silver futures and options contracts traded on the Comex division of the New York Mercantile Exchange, according to U.S. government data, with funds turning net-short silver in one of the reports.

For the week ended April 2, speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report chopped the net-long position in gold, returning to levels seen in early March. That essentially wiped out most of the newly established bullish positions built during late March.

For silver, large speculators turned net-short for the first time in the disaggregated report, which dates back to September 2009. These traders are still net-long in the legacy report, but it is the smallest position since at least early 2007.

In the platinum group metals, large speculators returned as buyers for both metals, in both reports; meanwhile, they added to the ever-growing net-short position in copper.

Prices for the metals were mixed during the week to April 2, which is the timeframe covered by the report. June Comex gold fell $21.40 to $1,575.90 an ounce as of April 2. May silver fell $1.431 to $27.248. Nymex July platinum gained $4.40 to $1,574.20, while June palladium rose $8 to $769.40. Comex May copper fell 6.4 cents to $3.3785 a pound.

Oil rises in Asia following U.S. inventory data

         Crude Oil futures are trading modestly higher during Thursday’s Asian session, rebounding from a small loss in Wednesday U.S. session at the hands of the weekly inventory data. 

On the New York Mercantile Exchange, light, sweet crude futures for May delivery are up 0.10% at USD96.67 per barrel in Asian trading Thursday after settling down 0.31% at USD96.04 a barrel on Wednesday in the U.S. 

The U.S. Energy Information Administration reported earlier that U.S. crude oil inventories rose by 3.256 million barrels last week after falling by 1.314 million barrels in the week before last. Analysts were expecting oil inventories to rise by only 705,000 last week.

Gasoline inventories, meanwhile, fell by 1.596 million barrels compared to a drop of 1.476 million barrels in the preceding week. Analysts were calling for gasoline inventories to fall by 1.020 million last week. 

In U.S. economic news, the National Association of Realtors said pending home sales fell 0.4% in February from January, but added the number increased 8.4% on a year-over-year basis. Despite trading lower today in Asia, gold is on track for gain of better than 1.5% this month. 

Also on Wednesday, Citigroup published a report saying it expects oil demand will peak before the current decade is over. The bank also slashed its price forecast on Brent crude to USD80 to USD90. 

Elsewhere, the Nigerian National Oil Spill Detection and Response Agency and the Nigerian Maritime Administration and Safety Agency are seeking a combined USD11.5 billion in fines from Royal Dutch Shell, Europe’s largest oil company, related to an oil spill at its offshore Bonga field in December 2011. Shell says there is no basis for the claims. 

Brazil’s Petrobras, that country’s state-run oil giant, said it will sell two offshore fields in Nigeria as part of its plan to sell USD9.9 billion worth of assets this year. 

Meanwhile Brent crude futures for May delivery rose 0.09% to USD109.84 per barrel on the ICE Futures Exchange. - Investing.com

Gold and Silver Show Little Reaction To Fed Decision

                                       Precious metals witnessed profit taking ahead of the US Federal Reserve Policy meet yesterday after gold traded as high at 1611.00. Gold prices registered marginal decline, however they held above the key level of US$1,600/ounce. US Federal Reserve stuck to its stance on bond buying and interest rates as well as its unemployment target. The FOMC stated that it would keep interest rates unchanged as long as the jobless rate was above 6.5%. It further elaborated that it does not expect the unemployment rate to fall below the specified levels until 2015 indicated that stimlus could remain ongoing for that period of time. The Fed did not mention any sort of roll back or exit strategy. On growth front, Bernanke stated that he expects moderate recovery, although downside risks to the economic outlook persists. The Fed reduced its growth expectations. During his press conference Mr. Bernanke noted the Cyprus situation but said that he does not see any effects on the US economy or recovery.

The uncertainty regarding Cyprus situation continue to linger, which is effectively providing some support to the gold prices. Cyprus has extended a bank shutdown to next week and considered nationalizing pension funds. Meanwhile, Cypriot leadership is seeking aid from Russia after rejecting European proposals. Cyprus’s finance minister met Russian counterparts and the meeting is reported to have made some progress. Gold prices were down as fears eased that the crisis in Cyprus may not spread further in the euro zone. EU Ministers are now downplaying the one time bank tax saying that Cyprus was a unique case, but commentators and analysts say that the EU leadership has permanently changed trust in banks. Savers may slowly look for more secure places to store their saving out of the control of governmental taxes and levies, especially in countries that might need bailout.

Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, increased to 1,222.16 tons, as on March 20. Silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 10,583.36 tons, as on March 20. The dollar index traded at 82.827 in recent action, little moved from 82.893 in late trading on Tuesday. TheUS dollar rallied against the yen on Wednesday, after a decision by the Federal Reserve to continue its aggressive monetary easing fueled optimism about the US economic recovery. The euro rebounded from a 4-month low against the dollar as fears about a financial meltdown in Cyprus eased, with the small island country pleading for a new loan from Russia.

Base metals managed moderate recovery, aided by US Federal Reserve persistence with bond buying program. The complex is expected to trade firm today, deriving cues from positive manufacturing numbers from China. The HSBC has reported that China Flash PMI for March has advanced to 51.7, as compared with a final reading of 50.4 in February. Silver advanced 36 points to trade at 28.853 while copper is trading in the green at 3.459. -FxEmpire

U.S. investment-manager guru says silver a good bet

                       Every few months, star U.S. investment manager Jeffrey Gundlach gives a webcast outlining where in the world he sees the best money-making opportunities.

In his latest webcast, Mr. Gundlach made three simple calls. Buy silver. Pick up 30-year U.S. Treasury bonds. And for stock investors, go to Japan. That Asian market, even though it's surging, could rise more than 20 per cent in U.S. dollar terms this year.

You could do worse than paying attention to Mr. Gundlach, who was once dubbed the King of Bonds for his winning ways in fixed-income markets, although he's been branching out quite a bit from his credit-market specialty.I listen to a lot of forecasts by investment gurus, and some are so dull and equivocating I often fear I'll need a trip to the office defibrillator to jolt myself back to consciousness afterwards.

Not so with Mr. Gundlach, who is always bright. He's founder of his own Los Angeles money management firm, DoubleLine Capital, which he set up after being abruptly fired in 2009 from Trust Company of the West. His main fund at TCW regularly ranked in the top 1 or 2 per cent in the performance sweepstakes and he's continued to outperform at DoubleLine.

Mr. Gundlach is going against the hedge-fund herd on his silver call, which is based on his bullish view on gold. In recent months, gold ETFs have experienced some of their largest outflows in years, and some noted hedge-fund operators, such as George Soros, have cut their positions in the yellow metal. By going on the other side of this trade, Mr. Gundlach is sticking his neck out in a high-profile way.

Copper Advances on China Autos, U.S. Jobs: Commodities at Close

The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 0.1 percent to settle at 649.62 at 3:59 p.m. New York time, led by industrial metals.

The UBS Bloomberg CMCI gauge of 26 prices advanced 0.3 percent to 1,551.55.

BASE METALS

Copper rose to the highest in more than a week as signs of strength in Chinese auto sales and gains in the U.S. labor market brightened demand prospects for industrial metals.

Wholesale deliveries of cars, multipurpose and sport- utility vehicles rose 20 percent in the two months ended Feb. 28 in the strongest start since 2010, according to a Chinese industry group. U.S. job openings climbed in January, and confidence among small businesses rose in February for a third month, reports showed.

On the Comex in New York, copper futures for May delivery advanced 1.1 percent to $3.5545 a pound. Earlier, the price reached $3.576, the highest for a most-active contract since Feb. 28.

On the London Metal Exchange, copper for delivery in three months gained 0.9 percent to $7,830 a metric ton ($3.55 a pound). Zinc, nickel, tin, aluminum and lead also rose.

PRECIOUS METALS

Gold rose, capping the longest rally in six months, as Europe’s slumping economy increased speculation that central banks will expand stimulus measures, boosting demand for the metal as a store of value.

On the Comex, gold futures for April delivery climbed 0.9 percent to $1,591.70 an ounce. The price climbed for the fourth straight session, the longest rally since Aug 21.

Silver futures for May delivery rose 1.1 percent to $29.171 an ounce.

On the New York Mercantile Exchange, platinum futures for April delivery fell 0.4 percent to $1,595 an ounce.

Palladium futures for June delivery dropped 0.5 percent to $775.50 an ounce.

CRUDE OIL

Crude oil advanced as the euro trimmed losses against the dollar and the Organization of Petroleum Exporting Countries increased production.

On the Nymex, oil futures for April delivery rose 0.5 percent to $92.54 a barrel.

Brent oil for April settlement dropped 0.5 percent to $109.65 a barrel on the London-based ICE Futures Europe exchange.

OAO Lukoil’s Litasco bought a cargo of Forties crude at the lowest differential in almost 11 months. Statoil ASA bid for Russian Urals blend at the highest spread in almost a month.

Daily exports of the 12 main grades of North Sea crude for loading in April will increase 8 percent to the highest in 10 months, programs obtained by Bloomberg News showed.

OIL PRODUCTS

Gasoline was little changed following wide price swings linked to volatile biofuel-credit prices.

On the Nymex, gasoline futures for April delivery slid 0.1 percent to $3.1502 a gallon. The price rose as much as 1.2 percent and dropped as much as 1.6 percent.

Heating-oil futures for April delivery fell 0.7 percent to $2.9484 a gallon.

Gold Gains But Lacks Conviction

Gold is trading completely flat on Wednesday morning at 1591.70 as the gains yesterday had no conviction; markets remain without a direction while they begin to speculate about next week’s FOMC meeting decision. Gold rose nearly 1%, after a top European Central Bank official said the euro zone crisis was not over; however prices again came under pressure as redemptions in gold-backed exchange-traded funds continued. Gold holdings of SPDR gold trust declined to 1,236.31 tons

Bundesbank’s chief Jens Weidmann, also a member of the ECB Governing Council, said the German central bank had set aside billions more Euros against what it deemed risky ECB moves. Weidmann is very outspoken and very conservative with a negative outlook so much of thoughts and statements are colored by his overall bias.

The dollar index closed a seesaw session with a marginal loss which allowed precious metals an opportunity to buy gold on dips in the US dollar. The dollar index which tracks greenback against major currencies moved to 82.585.

Gold prices were also supported on expectations of aggressive monetary easing by Japan after the new BOJ governor steps in on March 19. Mr. Kuroda received the support of the parties controlling the legislature this morning assuring his swift and positive approval on Thursday.

April Gold Futures Spike Higher

Bargain hunters helped drive April gold prices higher on Tuesday. The weaker U.S. Dollar also helped underpin the market. Technically, several days of narrow trading and consolidation gave one the feeling that something was up, but the direction wasn’t clear. On one hand we had the downtrend on the daily chart, but we also had a new higher bottom at $1560.40 from March 8 which was indicative of new buying.

Technically, April gold is trading on the bullish side of a retracement zone at $1587.00 to $1579.28. Uptrending support is at $1580.30. Downtrending resistance is at $1599.70. This has created a triangle chart pattern on the daily chart which is indicative of more short-term volatility.

 Short-covering and a weaker U.S. Dollar continued to drive April crude oil prices higher amid bearish supply and demand fundamentals. Technically, crude oil has been moving up at a rate of .50 since reaching a bottom at $89.33 on March 4. The angle it has been straddling during the rise is at $92.33 today. Based on the short-term range of $98.65 to $89.33, the major upside target is $93.99 to $95.09. A downtrending Gann angle at $94.15 could provide additional resistance.

Gold drops after hitting $1,600 overnight

Gold edged down in Asian trade Wednesday after crossing the $1600 mark for a brief period overnight.

Gold for immediate delivery was seen trading at $1593.01 an ounce at 12.00 noon S9ingapore time while US gold was at $1592.22 an ounce on the comex division of nymex.

Analysts said the precious yellow metal is likely to extend gains on remarks by Germany's central bank about the euro zone crisis and the European Central Bank's moves to stem it.

Germany's Bundesbank said the euro zone crisis, which has eased as a result of the ECB's funding promises, was not over,and that it had set aside billions more euros against what it deems risky ECB moves.

Shanghai Futures Exchange To Begin Gold After Hours Trade

As it seeks to win new foreign business, China's largest commodities market, The Shanghai Futures Exchange is looking to launch after hours trading before the end of 2013. The Exchange has 10 trading categories, including gold, silver, copper and aluminum.

The extended trading hours are set to make a big difference for institutional investors trading in precious metals, since they are highly sensitive to international news.

The Exchange is of the opinion that after hours trading could help attract more European and US investors to the market, and would also help market participants hedge or adjust their positions in response to market news during the European and US business day.

For instance, precious metal futures contracts usually react strongly to US nonfarm payroll data. The information comes in around 8.30 pm local time, when the markets are technically closed. Given the after hours trade, investors could cut their holdings in a more timely manner.

The exchange now trades from 9 am to 11.30 am and from 1.30 pm to 3 pm Beijing time. After hours trading refers to the buying and selling of securities on major exchanges outside of specified regular trading hours. 

India's two premium stock exchanges, the Bombay Stock Exchange, which is Asia's oldest bourse, and the National Stock Exchange too decided to advance their trading hours by opening an hour early way back in 2009, to align the timings with those in major Asian markets. Both the exchanges have after hour trades.

In February 2013, the world’s largest exchange company, the Hong Kong Exchanges and Clearing won regulatory approval to start after hours futures trading. The idea was to move into globally traded asset classes. 

The HK Exchange is also considering instituting after hours trading in gold futures at a later date. The Exchange, which carried out a $2.2 billion takeover of the London Metals Exchange in December last year, has noted that its implementation of after hours futures trading is a mandatory step toward moving into trading of foreign exchange and other classes of assets traded on a global basis.

Source : GlodSilver.com

Silver’s Industrial Demand: The Best Is Yet to Come(financialsense)

                                        As the price of silver searches for a bottom, and as many wonder if the precious metals’ bull is over, it is worth re-examining the other source of demand for silver: namely, from industry. This is also important if in fact the world is moving toward some kind of recovery, where you would think the price of silver would catch a bid from industrial users.

In recent years, the rise of the silver price has come almost exclusively from investment, or monetary demand (an important reminder for anyone who claims silver isn’t money, by the way.) But there have been periods of time when silver’s industrial demand drove the price of the white metal higher. In the period between roughly 1900 and 1970, industrial demand for silver increased over 4 times- from 100 million to 400 million ounces. The industrial revolution in silver was due largely to the urbanization and technological revolutions taking place in twentieth century life. Whether we are talking about indoor plumbing, electricity, cars, or aerospace technology, silver proved to be an indispensable metal. One of the largest industrial uses for silver came from photography, invented by Frenchmen Nicephore Niecpe in 1822, and made more popular by Daguerre in the 1840s. By the twentieth century millions of ounces of silver were needed just for photography. But in terms of silver demand, this was just the tip of the iceberg.

Contrary Gold Futures 2 - (www.zealLLC.com)

                            Gold’s technical breakdown suffered in its recent capitulation selloff naturally unleashed a flood of bearish sentiment.  Traders are totally convinced gold’s woes are just starting, that the worst is yet to come.  This pessimistic worldview is largely universal, even among futures traders.  But their collective bets are actually a strong contrarian indicator.  Their bearishness peaks right before major rallies erupt.

Futures speculators are generally considered the most sophisticated of traders.  With futures’ inherent high leverage, margin requirements, limited lifespans, and zero-sum nature, they are far more risky and challenging to trade than stocks.  Thus the average futures trader is much better informed and better capitalized than the average stock trader.  Unforgiving futures trading soon weeds out mediocre traders.

But nevertheless the surviving futures traders are still human.  They struggle with the same dangerous emotions of greed and fear that plague stock traders.  As a herd, futures traders grow too euphoric and greedy after a price has surged too far too fast.  So they flood into longs near highs.  And they get too despondent and fearful after a price has plunged too far too fast.  So they pile into shorts near lows.

And the latter has certainly happened recently thanks to gold’s capitulation.  As an unfortunate chain of news and sentiment fed on itself as analyzed in depth in our latest monthly newsletter, futures traders grewexceptionally bearish.  So they made big bets that gold’s price would keep on falling, which in the futures world means taking the short side of contracts.  And these shorts reached incredible extremes.

US futures trading is regulated by the Commodity Futures Trading Commission, an arm of the US government.  While the CFTC can be a real pain sometimes like all regulators, one good thing it does is publish a weekly report called the Commitments of Traders.  Released late Friday afternoons, it shows what positions several classes of futures traders happened to be holding as of the preceding Tuesday.

Futures are a zero-sum game, every contract has one trader betting a price will move one way against an opposing trader betting that price will move the other way.  So every dollar won in futures is a direct dollar loss from the counterparty on the other side of the contract.  Thus the total number of longs and shorts in any commodity, including gold, are always perfectly equal.  Shorts can’t exist without offsetting longs.

While total gold shorts always equal longs, the CFTC divides futures traders into three different classes.  These are commercial traders, non-commercial traders, and nonreportable traders.  These are generally translated as hedgers directly using a physical underlying commodity for business purposes, large speculators, and small speculators.  The aggregate positions held by each class can vary considerably.

The way it nearly always works in the gold world is commercial hedgers mostly take the short side of gold contracts.  They are dominated by miners locking in future selling prices.  And then speculators, both large and small, take the offsetting long side of these trades.  When the total longs and total shorts for each class are added up, the result is a net-long or net-short position.  This effectively reveals sentiment.

The more net-long the speculators are, the more bullish they are on gold.  They won’t make these risky leveraged bets on this metal unless they are convinced it is likely to continue surging.  This tends to happen near major toppings after big uplegs.  The less net-long speculators are, the more bearish they are on gold.  They won’t bet heavily on gold upside after this metal has long languished in corrections.

This first chart looks at these aggregate class positions in gold futures over time.  The always net-short commercial hedgers’ positions are shown in yellow.  Without them, gold futures trading wouldn’t exist.  The offsetting net-long large and small speculators are rendered in orange and red.  When the gold price is overlaid on these collective positions, it becomes readily apparent they are a strong contrarian indicator.

Even though commercials are always net-short and speculators always net-long during a secular bull, the degree of these bets is very revealing.  As speculators get exceptionally bullish or bearish on gold, their net-long exposure rises and falls accordingly.  And amazingly given futures’ traders well-deserved reputation as sophisticated players, they nearly always make the wrong bets near gold-price extremes!

Gold Falls on Signs of Economic Recovery: Commodities at Close

The Standard & Poor’s GSCI Spot Index of 24 raw materials fell 0.3 percent to settle at 648.21 at 4 p.m. New York time, led by metals.

The UBS Bloomberg CMCI gauge of 26 prices slid 0.2 percent to 1,547.62.

PRECIOUS METALS

Gold fell, capping the longest run of monthly declines in 16 years, as signs of economic optimism curbed demand for the metal as a haven.

Jobless claims in the U.S. dropped in the week that ended Feb. 23, the government said today. German unemployment unexpectedly fell in February amid signs that Europe’s biggest economy is recovering, and Japan’s industrial production in January rose for the second straight month.

On the Comex in New York, gold futures for April delivery dropped 1.1 percent to $1,578.10 an ounce. This month, the metal tumbled 5 percent, the fifth straight decline and the longest slump January 1997.

Fed Director Bernanke Sends Gold Skywards

                            Gold’s biggest rally in months edged into day three to trade above the 1615.00 level after being stuck under the resistance level of 1600, when the U.S. Federal Reserve chief defended the stimulus program that has stoked gold buying on inflation worries. Mr. Bernanke’s testimony seemed to indicate that the FOMC would continue its ongoing asset purchase programs, which helped bump gold skywards. Bernanke said that the current programs were not causing inflation or an asset bubble.

                                                         www.orangecommodities.com

This morning gold is giving back a few dollars after the US dollar rebounded late in trading on yesterday on positive eco data and as traders took advantage to the rally to sell and book profits as the month comes to a close. Gold rose 1.3 percent on yesterday, its biggest one-day gain in three months, as Federal Reserve Chairman Ben Bernanke’s defense of U.S. bond-buying stimulus boosted bullion’s inflation-hedge appeal. The metal broke above $1,600 an ounce, extending its rally to a fourth straight day, after Bernanke said Fed policymakers are cognizant of potential risks from its loose monetary policy, but the risks did not seem material now. In his testimony on the central bank’s semiannual report on monetary policy,

Gold Hammered to 7.5-Mo. Low on Technical Selling, Bearish FOMC Minutes

 www.orangecommodities.com

Gold prices ended the U.S. day session sharply lower Wednesday, and then extended those losses in the afternoon following a bearish FOMC minutes report. Prices hit a fresh
7.5-month low as the precious yellow metals bulls are presently reeling. April gold last traded down $43.50 at $1,560.90 an ounce. Spot gold was last quoted down $44.90 at $1,560.50.  March Comex silver last traded down $1.017 at $28.405 an ounce.

The Federal Reserve’s Open Market Committee in early January said U.S. economic conditions are improving to the point that its massive asset purchasing program (quantitative easing) may have to be changed. The FOMC will further address the issue at its next meeting in March. Worries the FOMC minutes would indeed be bearish added to the technical selling pressure Wednesday morning. These minutes in the past few months have been market-movers, just like Wednesday’s. The U.S. Treasury markets, with their recent rising bond yields, are also hinting that the Fed’s very accommodative monetary policy of the past few years will start to wind down in the not-too-distant future. That’s yet another underlying bearish factor for the raw commodity sector, including gold and silver.

Wednesday’s price action on the daily chart for April Comex gold futures saw the 50-day moving average cross below the 200-day moving average, to produce what is called a “death cross.” This term has become somewhat popular in recent years, partly because it sounds so ominous. However, the technical significance of this particular moving average crossover signal is not major. In fact, a Dow Jones report Wednesday said that Schaeffer’s Investment Research analyst Ryan Detrick did a historical analysis of the death cross on gold, and he found that on average gold prices actually rebounded somewhat in the weeks and months following the death cross.

Another major bearish factor for the gold and silver markets in recent weeks has been rallying stock markets worldwide, which shows investor risk appetite is on the upswing—at the expense of demand for safe-haven assets like gold and to a lesser degree silver. The recent strength of the U.S. dollar index is also an underlying bearish factor for the precious metals markets. Recent developments coming out of the European Union paint a picture of improving financial and economic conditions, to suggest the EU has turned the corner toward recovery from its sovereign debt crisis. That’s also a bearish underlying factor for the safe-haven gold market.

METALS OUTLOOK: Sentiment In Gold Changes; Watch Asian Activity

The short-term sentiment in gold changed this week, particularly as the market took out an important technical-chart level, but whether the metal extends its losses might depend on what Asian buyers do next week when they return from their Lunar New Year festival.

Prices were lower on the day and the week. Most-active April gold on the Comex division of the Nymex settled at $1,609.50, down 3.4% on the week. March silver settled at $29.869, down 5% on the week.  
In the U.S., markets are closed Monday for the Presidents Day holiday. Trade resumes Tuesday.

In the Kitco News Gold Survey, out of 33 participants, 25 responded this week. Of those 25 participants, nine see prices up, while 12 see prices down, and four see prices moving sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Market participants said attitudes in gold for now have changed, pointing to an increase in open interest in Comex futures market as prices fall. Open interest is a