New York gold futures pulled back from two days of record highs on Thursday, pressured by a bout of profit-taking and a rising dollar. The yellow metal fell 1.1 percent, but most reports opined support with continued safe-having buying expected.
Other metals retreated as well, with silver and palladium both declining 0.8 percent and platinum falling the least at 0.5 percent.
In other markets, crude oil slipped to its lowest level in nearly three months while U.S. stocks ended lower with the major indexes sliding between 1.1 percent and 1.3 percent.
New York precious metal figures follow:
-
Gold for June delivery declined $13.90 to $1,229.20 an ounce. It ranged from $1227.50 to $1243.70.
-
Silver for July delivery fell 16.4 cents to $19.499 an ounce. It ranged from $19.350 to $19.845.
- July platinum retreated $7.90 to $1,739.40 an ounce. It ranged from $1,717.60 to $1,746.70.
- June palladium lost $4.15 to $543.30 an ounce. It ranged from $536.55 to $550.00.
In notable bullion quotes of the day:
"Gold is due for a breather," Matt Zeman, a metals trader at LaSalle Futures Group in Chicago, was quoted on Bloomberg. "People are taking profit, but it’s still a buy-the-dips market."
"The bullish overtone in the market has reached an all-time high," Scott Meyers, senior futures analyst with Pioneer Futures in New York, said on Reuters. "There doesn’t seem to be any limit to where this market can go. There are a plethora of things from geopolitical tensions to uncertain market conditions for investors to point to hard tangible assets like gold."
"Amid declarations that virtually ‘unlimited’ demand for gold is possibly in the cards, amid a 97% level of bullishness, amid visions of $15,000 (not a misprint) per ounce gold, and amid written guarantees of a ‘new paradigm’ having arrived, gold (and its current price) continued to receive a sufficiently high level of media attention to generate some 14,000 headlines over the past week," wrote Jon Nadler, senior analyst at Kitco Metals, Inc. [Read Nadler’s full morning commentary.]
In PM London bullion, the benchmark gold price was fixed earlier in the North American day to $1,237.50 an ounce, the same price as Wednesday. Silver fell 16 cents to $19.430 an ounce. Platinum settled at $1,728.00 an ounce, gaining $25.00. Palladium ended up $6.00 to $543.00 an ounce.
Oil and gasoline prices
Crude oil slid, "finishing in the red for the sixth out of the past seven sessions and hitting their lowest level in nearly three months as concerns over European economic stability weighed on the euro and helped lift the dollar," wrote Claudia Assis and Kate Gibson of MarketWatch.
"The key driver for sentiment is uncertainty regarding growth in Europe and possible implications for world growth," Christophe Barret, an analyst with Credit Agricole CIB in London, was quoted on Bloomberg. "Crude stocks are pretty high. A range around $70 would be reasonable, given the economic outlook."
New York crude oil for June delivery dropped $1.25, or 1.7 percent, to $74.40 a barrel.
The national average for regular unleaded gasoline declined six-tenths of a cent to $2.890 a gallon, according to AAA fuel data. The current average is 3.9 cents lower than last week, 3.2 cents more than a month back, and 62.3 cents higher than the average from a year ago.
U.S. Stocks
U.S. stocks ended down "as probes of banks’ mortgage-bond deals widened and profit forecasts disappointed investors at Cisco Systems Inc. and Kohl’s Corp., while the euro slid on concern governments won’t cut deficits fast enough to halt the debt crisis," wrote Rita Nazareth and David Merritt of Bloomberg.
"The last few days we’ve seen a tug of war between the concerns investors have about the financial system and the lack of alternatives in terms of where they can put money," Larry Glazer, managing director at Mayflower Advisors, was quoted on CNNMoney.com.
The Dow Jones industrial average lost 113.96 points, or 1.05 percent, to 10,782.95. The S&P 500 Index declined 14.23 points, or 1.21 percent, to 1,157.44. The Nasdaq Composite Index fell 0.66 points, or 1.26 percent, to 2,394.36.
Gold, Silver, and Metals: Prices and Commentary – May 13, 2010
by Jon Nadler, Kitco Metals Inc.
Trading Places: Coins for Condos
Good Morning,
Amid declarations that virtually ‘unlimited’ demand for gold is possibly in the cards, amid a 97% level of bullishness, amid visions of $15,000 (not a misprint) per ounce gold, and amid written guarantees of a ‘new paradigm’ having arrived, gold (and its current price) continued to receive a sufficiently high level of media attention to generate some 14,000 headlines over the past week.
A simple Google News search will confirm as much. Not to mention the uber-ominous news item about a gold ATM making its debut at the Emirates Palace Hotel in Abu Dhabi (the perfect place to make a quick ‘withdrawal’ in gold while the world around you flames out). Then again, if you just spent $10K on a night’s lodging, perhaps the world flaming out is the least of your concerns (for now).
Overnight markets, albeit a tad quiet-to-lower, showed little in the way of a major directional change being in the making. The euro did not manage to make any headway to the upside and sellers thus pushed it to just under $1.26 once again. The US dollar continued to bask in its safe-haven glow near the 85 level on the index, and gold meandered within the $1230-$1240 channel after having put it another full week’s worth of work on Wednesday, with a $1243.10 print for June gold.
The major focus among traders remains the temperature level of the European ‘situation’ and the degree to which the testing of the political will by speculators shows any indications of running into a wall of resistance. Continuing on yesterday’s emerging trend, another one of the PIIGS jumped aboard the eurozone austerity bandwagon this morning.
The P in the porcine acronym, Portugal, offered to take a 2 billion euro prime cut of budget bacon off its national spreadsheet. Half of that figure will come from tax hikes, the other half from spending cuts. Staying out of this conga line of budget cuts might prove hazardous to one’s national image, it now appears. As to when the other countries on the hit parade list will report that they are doing their share to share the pain, could that be more than just days away?
Bullion markets opened with some minor (gold, silver) and other not-so-minor (platinum, palladium) losses this morning. Spot gold showed only a $1.20 drop at the open, quoted at $1235.90 on the bid side. Silver fell 4 cents to start at $19.48 the ounce. Gold spot turned positive shortly after the open, albeit the June contract was still off by some $6 per ounce.
Physical demand in India was once again near invisible as the "G" day approaches — May 16 is Akshaya Tritiya- and global bullion prices remain higher than the Himalayas. At 18,400 rupees per ten grams, the ‘auspicious’ aspect of buying gold for this day that brings good luck and success may yet come into question this year among the locals.
Platinum gave back $16 to ease to $1721.00 but palladium lost only $2 to open at $539.00 the troy ounce. Once again, rhodium prices showed no change, at $2780.00 on the bid. Gold shadowed the euro inversely as it has for days and as the latter struggled to regain the $1.26 level. Only a minor change was reported in crude oil which fell to $75.05 per barrel.
Unemployment claims in the US fell for a fourth straight week –albeit by only 4,000 filings (to 444,000 in the week ending on the 8th of this month). The dollar and Treasurys gained in the wake of the statistical release. So did an apparently tireless gold (spot) trade (rising to $1238.50) that is once again taking on the most of the attributes of a Tokyo subway car at circa 6:00 PM on any given workday.
For further proof of the above, look no further than the news bit about China’s Wenzhou denizens who ‘used to be keen’ on real estate ‘investing’ –they are now flocking to…you-know-what. News travels fast. Several groups of profit-hungry locals have recently plunked ten million Yuan each on bullion. While a local investment firm’s representative was unable to provide exact figures for how much money has flowed from buildings into bars of late, the number remains relatively small as ‘gold prices are high.’
The lure of land and the captivation offered by condos still rules in China. However, the trend –if it has legs- should give some food for thought about the degree to which gold might either become the next bubble, or already is. Gold for ‘profit/return’ is not exactly what the classic mantra of buying it has been all about.
Gold as a savings and insurance vehicle is what it used to be all about (and, in that sense, we will stick with the sentiment in India where folks are sitting on millions of ounces of the stuff but have been letting go of some of it while other parts of the world feel the urge to pile in). Go tell that to the spec funds crowding this market. Fear them leaving it for greener pastures.
One more plane to catch now. Until tomorrow,
Happy Trading.
Jon Nadler
Senior Analyst
Kitco Metals Inc.
North America
Blog: http://www.kitco.com/ind/index.html#nadler
In addition to bullion American Silver Eagles that are already available, the United States Mint this year will also issue 5 oz. bullion America the Beautiful Silver Coins that are duplicates of the America the Beautiful Quarters. The first of five coins will be released this summer, with the remaining four to follow in short intervals. Check the above link to visit a sister site to CoinNews for more information on the series.
