Gold to rise sharply in second half of 2012: Commerzbank
NEW YORK (Commodity Online): Gold to rise sharply in the second half of this year and platinum group metals also looks positive, said Commerzbank, the second-largest bank in Germany, after Deutsche Bank.
The bullion is still down more than 6 percent in the second quarter, its steepest quarterly loss since 2004. Gold has fallen more than 12 percent from the 2012 peak of around $1,790, and 18 percent from an all-time high above $1,920 reached in September 2011.
According to the German bank, all metals are rallying sharply from Thursday’s sell-off as the dollar weakens after some progress was reported at the European Union summit.
The previous slide in gold as puzzling, since the high risk aversion among market participants during the European debt crisis should be supporting rising gold prices, they added.
“Gold is thus behaving less like a safe haven at present and more like a risky asset class,” the bank continued.
“In any case, we are confident that bargain-hunters will support gold at the current prices, and expect to see a sharp rise in price in the second half of the year. Fundamentals also strongly suggest increased platinum and palladium prices.” Commerzbank concluded.
At 9:22 a.m. EDT, August gold futures at the Comex division of the New York Mercantile Exchange is up $44.80 an ounce to $1,595.20.
Source: Commodity Online
Silver’s split personality feeds steep price drop
Silver’s split personality as an industrial and precious metal contributed to a steep drop for the second quarter, as the metal’s economic demand prospects and safe-haven appeal duel for investors’ attention.
“Silver had more froth in the price to work off versus other commodities,” after its “’bubble-esk’ run up in 2011, where it almost doubled over the course of three months,” said Elliott Orsillo, co-founder and portfolio manager at Season Investments LLC.
But Julian Phillips, a South Africa-based editor at SilverForecaster.com, believes that silver is “moving with gold as a monetary asset, despite not being recognized as such.” Industrial demand for the metal is “strong because its uses fall into the ‘need’ category,” where it’s used in electronics, solar panels and the medical field, Phillips said.
“With the monetary stresses now and for the next few years at current levels, there is little reason why prices should fall,” he said. “Gold will react more and more as a monetary metal and the silver prices will move with it, not with economic conditions.”
In fact, silver’s industrial component may not have any influence at all on the metal’s price at these levels, said Brien Lundin, author of the Silver Bullet Strategy report, published by Gold Newsletter.
Gold jumps over 3 percent on EU deal, logs monthly gain
NEW YORK (Reuters) – Gold surged 3 percent to above $1,600 an ounce on Friday, ending June with its first monthly gain in five months, as a European deal to shore up banks and cut borrowing costs lifted bullion’s investment appeal.
Silver and platinum group metals also soared after EU leaders agreed to let their rescue fund inject aid directly into stricken banks from next year and intervene on bond markets to support troubled member states.
Monetary stimulus by central banks and governments is bullish for gold, which has been a favorite among hedge fund managers and institutional investors to hedge against the loss of purchasing power due to currency depreciation and inflation.
The metal, which has for the most part of this year moved in tandem with riskier assets, received a boost from heavy short-covering after losses earlier this week sent the metal close to being oversold.
A 9 percent jump in U.S. crude futures also helped gold, with sharp gains in grains, other commodities, the euro and U.S. equities amid a better economic outlook after the EU deal.
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2012 American Eagle One Ounce Gold Uncirculated Coin Goes on Sale June 28
WASHINGTON – The United States Mint will open sales for the 2012 American Eagle One Ounce Gold Uncirculated Coin on June 28 at noon Eastern Time (ET). There are no household order or mintage limits in effect for this product. Customer demand will determine the number of coins produced. The coin’s sales price will be based on the bureau’s pricing structure for precious metals products.
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Silver: Time To Fish Or Cut Bait?
Silver remains on the run. After what has been a robust performance since the beginning of the financial crisis in 2008, the white metal has been struggling for much of the last year. And as we move into the summer, Silver has reached a most critical juncture. Thus, it is worthwhile to explore potential outcomes and investment strategies going forward. In other words, is it time to fish or cut bait with the Silver trade?
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Weak economic data from the US and China has encouraged selling of stocks and commodities over the last 24 hours. Americans’ claims for unemployment benefits remained at essentially the same level as last month, while a Philly Fed regional manufacturing survey showed yet another contraction. Brent crude futures fell 3.7% to settle at $89.23 a barrel – their lowest close since December 2010, while WTI lost 4% on the day to settle at $78.20, the lowest since October. Coming just a day after the Fed disappointed investors with its “no QE3 yet” message, it’s little surprise that we’re seeing the same old dash to the US dollar and Treasuries, as deflation expectations rise. The Dollar Index (USDX) is back above 82.00, while the yield on the 10-Year Treasury Note has fallen to 1.62%.
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Platinum futures for July delivery rose 1.4 percent to $1,487.60 an ounce. The price climbed for the fourth straight day, the longest rally in a month.
Palladium futures for September delivery gained 1.9 percent to $634.90 an ounce.
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Physical silver demand heading higher
The silver price is depressed compared with its historical relationship to gold, one ounce being worth about 55 of silver, against the historical rate of 15 or 16. The reason, perhaps, has to do with silver’s demonstration and its role as an industrial metal. However, with global supply from mines and recycling running at about one billion ounces and demand at only a hundred million less, it does not take much investment demand to create a severe shortage. For now, pricing is managed for industrial use, and industry has a vested interest in keeping the price low. For clues of future prices, we need to look at market data, and the graph below shows the aggregate positions of two groups of users extracted from disaggregated futures’ data going back to September 2009.
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Supplies of platinum likely to decline this year
Global supplies of platinum are likely to decline this year Johnson Matthey, in its latest publication ‘Platinum 2012’, has concluded. Recent developments in the South African platinum mining industry have begun to challenge the ability of the sector to increase supplies year-on-year. So far this year, strikes and safety stoppages in South Africa have continued to interrupt output, with a six-week strike at Impala platinum costing the company an estimated 120,000 oz. Although it remains possible that overall mine production could increase if safety stoppages and strikes moderate, the low levels of inventory after a draw down last year means that there is less flexibility for producers to supplement supplies from stocks. Following a ramping up to full production in North America and expansion in Zimbabwe last year there is little potential for growth from these regions in 2012. Russian output is likely to be flat or declining this year as mines increasingly rely on the extraction of relatively lower grade disseminated ore. Supplies, together with investment, are likely to be a key swing factor in determining the balance of the platinum market this year.
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Gold Will Be Top Performer in 2012 – UBS Poll Of 8 Trillion USD Official Sector
Today’s AM fix was USD 1,622.25, EUR 1,284.44, and GBP1,043.58 per ounce.
Yesterday’s AM fix was USD 1,619.00, EUR 1,289.83, and GBP 1,044.65 per ounce.
Silver is trading at $28.80/oz, €22.92/oz and £18.59/oz. Platinum is trading at $1,498.70/oz, palladium at $633.52/oz and rhodium at $1,215/oz.
Gold edged up $5.50 or 0.34% yesterday in New York and closed at $1,624.30/oz. Gold traded sideways in Asia and is remaining in a narrow range holding above $1,620/oz in European trading.
Gold climbed for its 6th session, its longest rally since October, on news that the US recovery shows signs of faltering. Gold has crept gradually higher again this week and appears to be consolidating on the sharp gains seen on June 1st when gold surged after the poor jobs number (see chart below).
Gold has rallied to a one week high as US jobless insurance benefits surprised and rose by 6,000, consumer prices fell in May and the current US account deficit grew in Q1 by its largest number in three years. Gold is being aided by suggestions that the Fed will employ more QE thereby further debasing the US dollar.
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Gold Will Be Top Performer in 2012 – UBS Poll Of 8 Trillion USD Official Sector