Fed Superstar Bernanke Sends Gold Crashing

Fed Superstar Bernanke Sends Gold Crashing
Fed Superstar Bernanke Sends Gold Crashing
Gold prices began declining yesterday after Fed Chairman Ben Bernanke said that decision to scale back or taper bond buying can come in one of Fed’s next few meetings if the economy looked set to maintain the pace and labor market looks improving. Gold had been trading close to the 1405 price but ended the day at 1367 giving back the day’s gains to end the day in the red. This sentiment has edged into this morning’s session with gold down another 1.65.

This week, has had very little data but a lot of Fed Presidents were scheduled to speak and they all made the headlines, putting the greenback and gold on a roller coaster. Late in the day, the FOMC minutes were released from the May 1st meeting. The minutes showed that the members were leaning towards a tapering of the monthly stimulus as it will be a very long project for the Fed to unwind their purchases and their monthly commitment. Mr. Bernanke sent the US dollar climbing. The dollar had been around 83.95 mid-day yesterday but was able to climb to trade at 84.44.

Gold futures fell sharply, following US Federal Reserve Chairman Ben Bernanke’s testimony before Congress as investors considered the likelihood that the central bank will soon begin to tighten monetary policy. Gold prices added to gains as Bernanke’s comments implied that premature tightening of Fed policy could end growth, then prices fell after he indicated that the central bank could slow asset purchases in the next few meetings.

Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,020.07 tons, as on May 22. Silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 10,022.95 tons, as on May 22.

US Federal Reserve Chairman Ben Bernanke at testimony to Congress on Wednesday said that the Fed’s massive bond-buying program would remain in place for now. But a decision to scale back the $85 billion in bonds the Fed buys each month could be taken at one of the central bank’s “next few meetings” if the economy looked set to maintain momentum, he added. Talk about Fed speak, what Mr. Bernanke said was a bunch of would haves, could haves, might and might not’s, but he did clearly indicate that there would be no change at the June meeting.

Silver followed cues from gold as there was very little data to help give any guidance to the metals pack that is until this morning when HSBC released its monthly Chinese manufacturing PMI report, this much followed report turned markets upside down. Not only did the report miss expectations, it showed a contraction rather than an expansion in the manufacturing sector. Markets are just now reacting to the data with silver falling over 37 cents this morning to trade at 22.108 and copper is following close on its heels at 3.319 after hitting a 6 week high yesterday. Metal traders will closely watch eurozone PMI data due later, which is expected to miss expectations and might send metals further down.

OECD Report Shows Spotty Growth For Developed Nations

OECD Report Shows Spotty Growth For Developed Nations
OECD Report Shows Spotty Growth For Developed Nations
Lately the International Monetary Fund and the World Bank have moved from bankers and lenders and supporters of developing economies to enforcers of economic policy, as seen in the recent eurozone bailouts and the troika. As bailouts seem to over for the present and the disbanding of the troika, these bankers seem to be moving to not only economic enforcers but also lobbyists. Recently the IMF urged the Bank of England to move from austerity to growth and tried to push the Bank of England into action. The IMF and the World Bank have changed their stance and program of economic reform and  are now pushing global economies to adopt the US and Japanese growth scenario. With the failure of austerity measures and Portugal, Spain, and Greece deep in recession with record high unemployment their GDP continues to contract making it impossible for these countries to reach budget levels demanded for continued economic support. The UK which voluntarily adopted a program of austerity continues on their own accord. Ireland is the only one of the bailout nations that seems to be recovering. Cyprus has just received their financial support and already find they will need more assistance.

The OECD released their most recent global outlook, which now shows the developed nations economies returning to growth in the first quarter of 2013 though the euro zone continued to lag behind the U.S. and Japan, according to figures released by the Organization for Economic Cooperation and Development.

The OECD said the combined gross domestic product of its 34 developed-country members grew 0.4% from the final three months of 2012, when output was flat. The OECD said there were “diverging patterns” across its membership, but that largely involved a contrast between contractions in France, Italy and the euro zone as a whole, and a pickup in growth in Japan, the U.S. and the U.K.

With growth so unbalanced and business and consumer confidence weak in the face of uncertainties surrounding the euro zone’s fiscal crisis and fiscal difficulties in the U.S., economists don’t expect a strong pickup in global growth in the near term.

The German economy is likely to grow at a stronger rate in the current quarter than in the first three months of the year, but the euro-zone crisis remains a significant risk, Germany’s central bank said yesterday. An expected recovery in construction after weather delays in the winter and encouraging signs from the industrial sector support the improved outlook, the Bundesbank said. Data released last week showed that Germany was the only major euro-zone economy to grow in the first quarter, eking out an expansion of 0.1% from the previous quarter. The 17-nation currency bloc’s economic output declined by 0.2%, marking its sixth straight quarter of contraction. Germany is expected to be the locomotive to pull the eurozone out of its crisis, but with the drop of the Japanese yen and exports shifting to Japan, exports from the eurozone continue to decline.

 

Gold Continues To Tumble As US Data Gives Sentiment A Boost

Gold Continues To Tumble As US Data Gives Sentiment A Boost
Gold Continues To Tumble As US Data Gives Sentiment A Boost
Gold tumbled once again on Monday morning down by over $20.00 to trade at $1343.85 responding to positive eco data and sentiment in the US. Gold futures declined for the seventh consecutive session on Friday, as the dollar index jumped to near 3-year highs and US data raised optimism about the economic recovery. The longest decline in Treasuries this year has left

U.S. govt debt the cheapest since Mar 2011 when measured by real yields and the best relative value compared with German bunds in more than two decades. After inflation, 10-year U.S. notes yielded 0.91% last week or 1.77% points more than real yields on U.K. gilts, the widest spread in 25 months.

Americans’ confidence in the economy climbed in May to the highest level in almost six years as rising real estate values and record stock prices boosted household wealth. The preliminary index of consumer sentiment increased to 83.7, the highest since July 2007, from 76.4 in April. Separately, the Conference Board’s gauge of the economic outlook for the next three to six months climbed 0.6% in April, more than forecast.

Home sales probably rose in April to the highest level in more than three years, extending gains in residential real estate that are giving the U.S. expansion a lift, economists said before reports this week. Combined purchases of new and existing residences climbed to a 5.41 mn annualized rate last month.

The beginning of the end of the Fed Reserve’s massive bond buying program might come sooner than many investors think if recent gains in the U.S. labor market do not prove fleeting. Reports on job growth in particular will go a long way in helping Fed officials determine whether the time is right to trim the pace of their $85 bn in monthly purchases.

Wall Street rose, giving the S&P’s 500 Index its fourth straight week of gains, as gauges for leading indicators and consumer sentiment advanced more than estimated. As traders looked for more risk and higher profits, gold continued its decline supported by constant outflows from gold-backed exchange-traded funds. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,038.41 tons, as on May 17.

The strength of the US dollar and the lack of demand for precious metals weighed on silver also. Silver fell this morning over $1.00 to trade at 21.26. . Silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 10,252.69 tons, as on May 17. The recovery in the US does not seem to have sparked an increase in demand for industrial metals, with the exception of copper which is facing a declining inventory helping to support prices. Copper is trading at 3.2975 this morning flat to Friday’s close. LME copper stocks, which rose again on Friday, have climbed 10% since early April. Metal market will look out for currency moves and economic data to chart its move forward. LME Copper warehouse stocks have shown a significant amount of volatility in recent weeks, with large swings in inventory levels evident in stockpile data. The fact that one of the world’s largest copper mines, PT Freeport Indonesia’s Grasberg operation, remained shut following a fatal accident also highlighted supply risks to the copper market and was also a price-support, although analysts said this interruption was having a limited effect on prices so far.

Bitcoin In My Opinion

Bitcoin In My Opinion
Bitcoin In My Opinion

It was about time that I looked into this headline sensation called “Bitcoin” and to be truly honest, I am still not sure what to make of it all. My first response when beginning my research was there is an awful lot of press about “Bitcoin”, but upon deeper investigation, I found that most of the press and publicity just seemed to repeat itself. Bloggers and online news services were simply rewriting the same topics over and over again.

My first step was to get a better understanding of exactly what Bitcoin was supposed to be, the explanation I found was more confusing than educational. Bitcoin, for those not aware, is a completely digital currency — one where exchanges between individuals are largely anonymous and secured through cryptography, and one that has seen its hype-meter go off the charts in recent months.

I am a bit old fashion and I was under the impression that currencies were issued by governments, who stood behind the value of the money. There have been other currencies, but these have been gold coins that had a value based on the gold content or those back up by gold in vaults. Bitcoin seems to have no value, no base and no exchangeable value outside that given by the buyers and sellers or investors at that particular time.

I wanted to learn how a buyer can invest in bitcoins, so I downloaded their software called “wallets” and thought I would purchase some bitcoins to better understand the process. Once the software was downloaded I looked for a button to purchase or invest in this digital currency. There was none, there were ways to transfer bitcoins to other users or to pay for some purchases but not a way to easily buy and sell bitcoins through the company. I know learned that I had to go online and locate bitcoin exchanges or dealers. I was able to find a few of these, but none that seemed to have any regulation or controls or approval. I decided to try to purchase some bitcoins using my PayPal account to find that was very difficult as most of these dealers did not accept PayPal for one reason or another. I found a list of sellers, offering an array of selections of bitcoins for different values. Now I was confused, if bitcoin has a value at a set day and time, why can I not purchase or invest in bitcoins at that time at that price.

Now a question started for form in my mind, how do I turn my bitcoins back into easily accessible cash money? I am still not sure of the answer to this, it seems that regardless of the value at that day and time, I have to post these for sales and wait for someone to purchase them.

As I continued my investigation, I came upon a recent news story actually several involving government actions and investigations. The US government took its first action against the bitcoin exchange freezing the US accounts of Mt. Gox, which is the largest bitcoin exchange in the world, processing 75 percent of all transactions in the last 30 days. Ok this is bad. The explanation I found read “Under the law, Administrators are defined as “a person engaged as a business in issuing (putting into circulation) a virtual currency, and who has the authority to redeem (to withdraw from circulation) such virtual currency.” Because bitcoin cannot be redeemed, under this definition, there are no Administrators in the bitcoin ecosystem. An Exchanger, on the other hand, is “a person engaged as a business in the exchange of virtual currency for real currency, funds, or other virtual currency.” Mt. Gox, fits under this designation, as do all other exchanges operating in the US”

At this time I reserve my judgment and my decision to invest in bitcoins. A digital currency is only as strong as the corporation standing behind it and the users’ confidence. Right now I do not feel so confident, but I will continue my research. I will keep you updated. Please remember that these are my opinions and I am just starting to dig deep in the “bitcoin” world watch for my future articles over the next few weeks, my opinion is subject to change.

As Stocks Fall Crude Oil Climbs

As Stocks Fall Crude Oil Climbs
As Stocks Fall Crude Oil Climbs
Stocks skidded on Thursday, as a series of mixed economic reports offered little inspiration to buy stocks. After hitting new all-time highs on Wednesday, Dow Jones and S&P 500 closed down 0.3% and 0.5%. NASDAQ dropped 0.2%.

The government reported that jobless claims were up from a week ago. Additionally, housing starts for April fell and were below forecasts.  Wall Street was dragged down, after signs that the Federal Reserve may start winding back its bond-buying program as early as June or July. That has fuelled some fear in the markets, because investors are concerned about how the US economy will perform, without the support of the Fed’s fiscal stimulus measures.

Data in Japan earlier in the day, showed a jump in GDP numbers starting to show some support for Prime Minister Abe’s aggressive economic plans.

The question begs to be asked, what is driving the price of crude oil to trade this morning at 95.12 giving back 4 cents after the US dollar recovered a bit this morning. Yesterday crude oil moved from the 94.00 range to trade over 95.00. Crude oil futures recovered from early losses to close in positive above $95 a barrel, as traders considered prospects for energy demand amid weak US economic data.

Crude prices were supported over tensions in the Middle East over Syria’s civil war and Iran’s nuclear program which stoked supply concerns and supported prices. A weaker dollar after poor housing data from US also helped push crude prices higher.

Domestic crude oil futures were trading slightly higher today tracking mild upward recovery in benchmark contracts on the New York Mercantile Exchange, where prices gained as the US dollar weakened against the euro. The greenback lost ground against the euro after the release of discouraging US data. Data from the US Labor Department showed that the country’s jobless claims rose 32,000 to 360,000 in the week ended May 11. However, the gains were limited as weak US data could also hurt oil demand from the world largest oil consuming nation. Besides, decline in the US crude oil stocks in the week ended May 10 lent some support to oil futures.

Oil prices eased in Asia today as poor housing and employment data from the United States sparked concerns of weaker crude demand in the world’s biggest economy, analysts said. New York’s main contract, light sweet crude for delivery in June, dropped 14 cents to $95.02 a barrel and Brent North Sea crude for July delivery shed 15 cents to $103.63 in mid-morning trade. The market has taken fright at those worse-than-expected numbers.

Natural gas fell below the 4.00 price level on Thursday and remains weak on Friday morning as the US dollar strengthened. Natural gas prices fell sharply, after the US Energy Information Administration reported a 99bn cubic feet rise to 1.964 trillion cubic feet in US inventories for the week ended May 10.

Federal Reserve Speeches Lower The Boom On Gold & Silver

Federal Reserve Speeches Lower The Boom On Gold & Silver
Federal Reserve Speeches Lower The Boom On Gold & Silver
Gold continued to tumble this morning in Asian trading giving up $7.55 to trade at 1379.35 at this writing. Traders seemed to ignore lackluster US data and paid closer attention to several FOMC members’ speeches yesterday. Reserve Bank of San Francisco President John Williams said on Thursday that the Fed within months may begin slowing the pace of its $85 billion in monthly bond-buying amid signs the economy is gradually gaining strength. The program could be ended late this year if all goes as hoped.

Gold has lost nearly 6 percent of its value in the six sessions through Thursday as stocks gained on the back of strong U.S. economic data, and on fears the Federal Reserve could end its bullion-friendly bond buying program. Spot gold was down 0.53 percent at $1,378.41 having fallen to a four-week low of $1,369.29 on Thursday as renewed liquidation in gold ETFs and a recent drop below the $1,400-per-ounce level spooked investors.

The shiny stuff is down 17 percent for the year and is on track for its worst weekly decline in a month.    Physical demand was also quiet on Friday as consumers in the biggest gold buyers, India and China, wait for prices to stabilize or drop further, traders and dealers said.

Gold demand fell 13 percent to a three-year low of 963 tons in the first quarter, as rising jewelry demand and strong appetite for coins and bars failed to offset a sharp drop in investment, the World Gold Council says.  Gold is headed towards a low last seen in April, when fears of European countries liquidating gold reserves sent gold prices tumbling.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said holdings fell 0.55 percent to 1041.42 tons on Thursday, the lowest in four years.  Gold has retreated 18 percent this year, falling into a bear market last month, as the dollar rallied 5.2 percent against a six-currency basket amid prospects for a U.S. recovery and reduced stimulus from the Fed. Holdings in ETPs have lost 16 percent in 2013

Silver dropped 0.5 percent to $22.5875 an ounce, set for a second weekly decline. Platinum lost 0.2 percent to $1,476.35 an ounce, also heading for a second week of losses. Palladium declined 0.2 percent to $737.80 an ounce, paring a fourth week of gains that’s the best run since February. With disappointing US data the metals pack traded in the red. US data showed a drop in housing starts along with higher than expected unemployment claims and weak manufacturing data the dollar still traded on a high note weighing on all metals.

 

Gold Takes A Major Tumble

Gold Takes A Major Tumble
Gold Takes A Major Tumble
Gold continues its tumble this morning trading at 1393.35 down by 2.85 after nose diving on Wednesday. With equity markets trading at or near record highs, traders are continually moving away from precious metals and to higher performing equities.  Most Asian exchanges rose this morning after key U.S. indexes clinched another record finish although Japanese stocks skidded as a firmer yen led investors to lock in recent gains despite strong economic growth data and upbeat results from banks. Japanese GDP printed higher than expected giving a bit of a bounce to the JPY.

A stronger dollar internationally and falling crude prices which lowered inflation concerns also weighed on gold. SPDR Gold Trust, the world’s largest gold-backed exchange traded fund’s holdings fell 0.43 percent to 1047.14 tons on Wednesday from 1051.65 tons on Tuesday. Gold prices internationally are likely to move down as easing physical demand and improved risk appetite globally can continue to hurt gold’s appeal as a safe haven. A drop in ETF holdings indicates that investors are shifting to equities from gold.

Eurozone economy extended its recession for sixth quarter. The GDP in the euro area contracted 0.2% last quarter against a consensus estimate of 0.1% decline, raising expectation of more monetary easing by the ECB. The Germany economy grew 0.1% below the 0.3% economists forecast.

Gold fell below $1,400 an ounce yesterday as investor’s desert bullion in the face of record-high stock markets and growing economic confidence. The price of the metal closed down two per cent at $1,396.20, as US data suggested consumer prices are set to stay relatively flat undermining its safe-haven appeal. In October gold hit a peak of $1,794 an ounce before entering a period of decline. It eventually crashed in April.

Gold remained under pressure as holdings in exchange-traded funds tumbled to their lowest in four years.  Rallying stocks also hurt bullion’s appeal as an alternative investment, although tight physical supply in the world’s largest consumer India could offer some support. 

Financial markets are buzzing with speculation that the US Federal Reserve will begin winding down its asset-purchasing programme, which is tantamount to printing money. Bullion hit an 11-month high in October last year after the Fed announced its third round of aggressive economic stimulus, raising fears the central bank’s money-printing to buy assets would stoke inflation. 

Silver is trading at 22.700 weighed down by the drop in demand for precious metals. Industrial metals are expected to move down as a slew of weak economic data from China and rising supplies are likely to put pressure on base metals. US housing data expected slightly positive today could limit the downside.

Copper prices were down as a slowdown in euro zone economy and poor US industrial production hurt prices. A build up in copper inventories at LME warehouses and a stronger dollar pushed prices further down. Copper is trading at 3.279

Gold Trading A Bit Confusing

Gold Trading A Bit Confusing
Gold Trading A Bit Confusing
Gold prices were down this morning as optimism over economic recovery in strong US equity markets hurt gold’s safe haven appeal. U.S. stocks rose, sending the S&P’s 500 Index to its eighth record high in the past nine sessions, on increased optimism over growth in the world’s largest economy. It seems that the primary conversation these days is focused on the US Fed and their asset purchases. As the strength of the US dollar trampled over its crosses, the JPY soared well above the 102 price level. Asian stocks rose as Nikkei climbed above 15,000 for the first time since Jan 2008 after the yen touched a 4 1/2-year low against the dollar, boosting the earnings outlook for exporters.

Gold on Tuesday fell to close at 1424.00 and remains weak this morning. Over the past months gold has developed a habit of climbing in the Asian session to give back gains throughout the day, but this morning gold is trading on a negative bias in the Asian markets.

Greece’s credit rating upgrade by Fitch and positive eurozone economic data also eased uncertainty in the region and hurt the investment demand for gold. SPDR Gold Trust, the world’s largest gold-backed exchange traded fund’s holdings remained unchanged on Tuesday. Hedge fund managers and money managers remain sidelined. Gold prices internationally are likely to move down as easing physical demand and improved risk appetite globally are likely to hurt gold’s appeal as a safe haven. Asian countries are seeing unprecedented demand for the yellow metal after the dip in prices in April. India imported $7.5 billion of gold bullion in the last month up from $3.1 billion a year earlier. The country’s trade deficit widened 70% with the increase in gold and silver imports.

The U.S. dollar eased and outflows from exchange-traded funds halted, but firm equities could lure away investors seeking better returns and keep a lid on bullion’s gains.  While gold has recovered around 8 percent from a two-year trough hit in April, its safe-haven appeal has been battered by record high U.S. equities, signs of an improving U.S. economy, and fears of a slowdown in demand by top consumer India. 

Bullion has slumped more than 14 percent so far this year, after gaining in the past 12 consecutive years as easy monetary policy burnished bullion’s appeal as a hedge against inflation.  Holdings at SPDR Gold Trust, the largest gold-backed ETF, were unchanged at 33.8 million ounces on Monday after falling almost daily. But the holdings were still within sight of their lowest since March 2009 that was hit after funds cut their exposure to bullion, whose historic fall in April took ardent gold investors and bulls by surprise. 

Silver followed the cues from gold falling to trade at 23.252 down by almost 13 cents. Precious metals remain weak along with industrial metals as lackluster data from China over the past weeks show a recovery but not as strong as expected.

Precious Metals Decline At The Of Start The Week

Precious Metals Decline At The Of Start The Week
Precious Metals Decline At The Of Start The Week
Precious metals declined on Monday, as strength in the dollar and worries that the US Federal Reserve will ease back on its easy monetary policy, pushed precious metals prices down for the third straight session.  Gold ended the day trading at 1434 and this morning has been able to edge up almost 5.00 to trade at 1439.25. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,051.65 tons, as on May 10. ETF investors have been pulling out of funds ever since gold plunged the week of April 19th declining by almost 200 in a 24 hour period. Gold was supported by physical buying which is just about petered out. India’s gold and silver imports in the month of April 2013 jumped by 138% to $7.5bn against $ 3.1bn in the same period last year. Due to high gold imports, the country’s trade deficit in April widened to $17.8bn y-o-y basis. India is entering its wedding season and with prices declining unexpected in April stockist, jewelers and coin dealers reported record retail sales.

Monday’s session was very quiet with low volumes. There was very little in the way of global news or eco data to shift markets. Traders seemed to be exhausted from last week’s round of fundamental reports and central bank meetings.

Yesterday hardly reacted to the data flow this included:

News that the Eurozone this week will probably reveal economic scars of the sovereign debt crisis confirming that the region is now suffering the longest recession since the single currency’s creation.

Ten-year Treasury yields reached the highest level since March as retail sales unexpectedly rose, while the Standard & Poor’s 500 Index was little changed at a record level. The dollar rallied and oil fell for a third day.

Sales at U.S. retailers unexpectedly advanced in April, helping ease concern of a sustained pullback in consumer spending that would stifle the economy. The 0.1 percent gain followed a 0.5 percent decrease in March.

Cyprus received its first emergency aid payment and Greece won approval of 7.5 billion euros ($9.7 billion) of rescue loans. Cyprus received 2 billion euros and will get as much as 1 billion euros more in June as the Mediterranean island’s 10 billion-euro aid package was activated.

China’s fixed-asset investment unexpectedly decelerated last month while industrial output trailed estimates, adding to concerns that the economy will fail to show much of a recovery this quarter.

Silver was little changed trading at 23.88 at the close and tumbled by 21 points this morning to trade at 23.675 as the metal pack was weak due to lackluster Chinese data. Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 10,440.4 tons, as on May 8.

Oil Weighed Down By OPEC Reports & Strong US Dollar

 

Oil Weighed Down By OPEC Reports & Strong US Dollar
Oil Weighed Down By OPEC Reports & Strong US Dollar
Wall Street exchanges closed higher on Friday as the momentum in the markets continued. Absence of major data releases aided the trend sustaining unabated. Major indices like the Dow and S&P reached record highs while the Nasdaq reached its 12-year highest level. News that the FOMC is developing a plan to wind down asset purchases in view of strong jobs data, turn on the markets.  The US dollar climbing to a 2008 high of 83.33. This morning crude oil is trading at 95.30 giving back 74 cents in early trading. The strength of the US dollar weighs heavily on dollar denominated commodities. Traders are also looking for higher risk and profit and are turning to equities.

On Friday, crude oil fell 35 cents on the Wall Street Journal news. The moves came as the U.S. Federal Reserve had reportedly sketched out a plan for winding down its stimulus program of buying $85 billion in bonds each month. Officials were trying to clarify the strategy so markets don’t overreact about their next moves, according to the report. The end of the Fed’s bond-buying program would make the U.S. dollar more attractive in terms of yield, analysts have said. But a stronger greenback tends to push down prices of dollar-denominated commodities such as oil, as it makes them more expensive to holders of other currencies.

West Texas Intermediate crude fell for a third day, the longest run of declines in four weeks, as OPEC boosted output to the highest level in five months. The Organization of the Petroleum Exporting Countries said demand grew less than expected in the first quarter of 2013, but it left its overall forecast unchanged at a rise of 800,000 barrels a day. OPEC, in a monthly report ahead of its May 31 summit, still expects consumption will increase in the second half of this year.

Crude oil prices slipped on renewed global demand worries after OPEC left its 2013 estimate unchanged and reported increased output in April. The Organization of Petroleum Exporting Countries, in its April report, forecast total average oil demand of 89.7 million barrels per day, up 0.8 million bpd from 2012, unchanged from its March projection.

OPEC claimed that demand growth has fallen short of expectations in the early months of the year, and while it is sticking to its current forecasts it warned those forecasts may be downgraded in future. OPEC said, however, that it expects demand to increase in the second half of 2013. And it currently forecasts demand growth in the order of 800,000 barrels per day over the course of the year.

Last week’s EIA inventory reported slightly higher than expected but had little effect on market demand, traders will closely watch Wednesday data release hoping to see a drop in inventory levels.

Natural gas continues to tumble as residential demand eases after the passing of winter weather. Gas is trading at 3.89 down by 11 points tumbling steadily since its high of 4.40 just a few weeks ago.

 

 

 

 

Gold, Silver and Copper Remain Negative

Gold, Silver and Copper Remain Negative
Gold, Silver and Copper Remain Negative
As the Indian wedding season is upon us, physical gold purchases have leveled off. Annually, the wedding season marks a huge rise in purchase but this year the pent up demand broke down the doors a few weeks ago when gold took a 200 point tumbled to end up trading in the low 1320 price range. Although prices quickly recovered to trade in the mid-1450 range, the flood gates had opened and could not be halted. For two weeks, stockists, jewelers and coin dealer could not keep inventory on the shelves. The US mint ran out of certain popular gold coins. Now that Akshaya Trithiya has arrived consumers are rushing to buy gold after prices of the yellow metal crashed nearly 17 per cent from its November 2012 peak. Traders are hoping that the consumer demand will remain high after the buying over the two weeks heading to the holiday.

This morning gold continues easing trading at 128.55 down by 8.05 on news that the US Fed are considering winding down their asset purchases. Gold fell more than 1 per cent today, holding near its weakest level in two weeks, as the dollar firmed against other currencies on signs of an improving US job market and as holdings in exchange-traded funds slipped again.  US labor market data has pointed to a steady recovery trend in the world’s largest economy, fuelling speculation the Federal Reserve could scale back its aggressive monetary stimulus aimed at supporting growth.

Meanwhile, retail investors have increased their trading activity in gold ETFs; the turnover in gold ETFs has increased over three fold. Most of the investments into ETFs are coming from the retail segment; the participation from the institutional segment is still on the lower side as professional remaining sidelined weighing heavily on gold prices. SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), said its holdings fell 0.24 per cent to 1051.65 tons on Friday after they rose slightly on Thursday. The holdings were within sight of a four-year low. 

The dollar has gained 4.4 percent against a six-currency basket including the yen and the euro this year as data showed the U.S. economy strengthening, while policy makers in Japan boosted stimulus and the European Central Bank cut interest rates to a record. The yen fell past 102 per dollar for the first time in more than four years today after Group of Seven finance chiefs indicated they’ll tolerate the slide for now. Friday’s news article in the Wall Street Journal stating that the Feds were developing a plan to cut asset purchases sparked a climb in the dollar which weighed heavily on all commodities. The US dollar is trading at 83.33 a 5 year high and continues to gather momentum.

Silver declined less than gold to trade at 23.598 but remains on a negative bias with global sentiment remaining a bit on the negative side ahead of some important Chinese data, which is weighing on metal prices today with copper falling to trade at 3.345.

Crude Oil Dealing With Middle East Tensions & Strong USD

Crude Oil Dealing With Middle East Tensions & Strong USD
Crude Oil Dealing With Middle East Tensions & Strong USD
A stronger dollar against the euro and yen weighed on crude prices which was also pressured by falling Chinese factory prices which were down for a 14th consecutive month, denting the outlook for demand in the country. However, the downside was limited due to lower than expected unemployment claims which strengthened signs of improving labor market conditions in US and supported crude. Crude oil is trading at 96.17 giving back 23 cents this morning in the Asian session. Crude was supported yesterday as tensions in the gulf region continued to grow. Traders can expect crude oil prices to go up as geopolitical tensions between Israel and Syria is likely to escalate after Hezbollah leader said Syria would respond to Israeli attacks and Israel reported weapon sales heading to Syria.

Crude oil futures traded steadily, as they pared earlier losses, struggling back toward their 5-week high as a decline in US jobless claims raised concerns that the US Federal Reserve will begin to pull back from its easy monetary policy. Brent crude traded firmly in volatile while the US crude closed slightly down, as investors weighed Middle East tensions against weak demand and high inventories.

The US government’s Energy Information Administration earlier this week said that American crude stocks rose to 395.5 million barrels in the week ending May 3, the highest level since 1982.  The buildup in US supplies indicates production is outstripping demand, putting downward pressure on prices. US inventories are a vital focus for traders because the US is the world’s biggest economy and its largest oil-consuming nation.

The US dollar rose above the 100 Japanese-yen level on Thursday, for the first time in 4-years as recent stronger data points have eased investors’ fears about US economic growth. US jobless claims for the week ended May 4 fell by 4,000 to 323,000, the lowest level since January 2008. The dollar index, which measures the US dollar’s moves against six major currencies, rose to 82.687 from 81.807 in late trade on Wednesday.

US natural gas ended slightly higher on Thursday on technical buying and profit booking. Higher inventories which came at 88B limited the upside in prices and can keep prices in a range today. Natural gas futures fell to a 5-week low on Thursday, after a report from the US Energy Information Administration showed natural gas supplies rose more-than-expected last week. The US Energy Information Administration said in its weekly report that natural gas storage in the US in the week ended May 3 rose by 88bn cubic feet to 1.865 trillion cubic feet. Front-month gas futures on the New York Mercantile Exchange ended up 0.5 cent at $3.983 per million British thermal units after sliding to a five-week low of $3.883 right after the EIA report.

Gold and Silver Fall After Strong Jobs Data

Gold and Silver Fall After Strong Jobs Data
Gold and Silver Fall After Strong Jobs Data
Gold is trading at 1459.85 down by 8.75 this morning following a market shift in the late North American trading session. Data released yesterday showed an ongoing improving in the US jobs market which helped strengthen the greenback. Later in the day, FOMC member Plosser indicated that the Fed might consider reducing its monthly asset purchases as signs show a significant recover in the jobs market. Earlier this year, the FOMC tied its monetary stimulus directly to the jobs and inflation data. Gold held steady yesterday after gaining more than 1 percent in the previous session, lacking impetus to rise further as investors cut their holdings on bullion exchange-traded funds to their lowest since early 2009. Bullion prices have been range-bound this month, torn between a pickup in physical demand after prices plunged to a more than 2-year low in mid-April and a lack of interest from investors who are shifting their money into equities as Wall Street gains.

There was a positive sign from investors as they increased their holdings in gold-backed investments. Gold held in electronic forms increased marginally to 2,241 tons, the first time in 40 days.  Positive economic data from US and Britain hurt gold’s safe haven appeal and also lowered prospects of further easing in the economies. SPDR Gold Trust, the world’s largest gold-backed exchange traded fund’s holdings rose 0.26 percent to 1054.18 tons on Thursday from 1051.47 tons on Wednesday.

Gold prices internationally are likely to move down as improving economic outlook is likely to hurt gold’s safe haven appeal as riskier assets look more attractive.  Gold fell more than 1% in a choppy trade session, as the dollar rose to a 4-year high against the yen and rallied against the euro, decreasing bullion’s appeal as a hedge against US currency depreciation.

The US dollar rose above the 100 Japanese-yen level on Thursday, for the first time in 4-years as recent stronger data points have eased investors’ fears about US economic growth. US jobless claims for the week ended May 4 fell by 4,000 to 323,000, the lowest level since January 2008.

The US dollar index, which measures the US dollar’s moves against six major currencies, rose to 82.687 from 81.807 in late trade on Wednesday.

Silver is trading at 23.770 down by 14 cents as precious metals took a tumble and silver followed cues from gold. Copper futures declined on Thursday, as price charts faced strong resistance after the metal’s rally to a 3-week high on expectations of rising demand from top importer China following strong trade numbers. Copper prices were down as a stronger dollar halted the upside in copper prices which rallied for past four sessions. However, the downside was limited on improving demand prospects from China after positive trade numbers. Base metals are expected to go up as falling inventories in LME and Shanghai warehouses and improving global economic prospects can support prices.

Gold and Silver Gain Climb With The Equity Markets

Gold and Silver Gain Climb With The Equity Markets
Gold and Silver Gain Climb With The Equity Markets
Gold is trading at 1472.25 inching down in the morning session, giving back 1.45 after gaining steadily on Wednesday. Gold for June 2013 delivery ended higher by 1.7% to close at $1,473.70. Once again Wall Street traded on a positive note, pushing the Dow above its recent record with the S&P and NASDAQ following suit. European markets responded to positive German data with the DAX leading the pack upwards. Traders moved from currencies to equities in hopes of finding profits. While the commodities markets also benefited from positive sentiment.

The Bank of Korea joined central banks in Australia, Europe and India in cutting interest rates this month, as weak yen dims the outlook for the nation’s exports and record household debt weighs on consumption. China’s consumer inflation stayed subdued in April while factory gate price declines deepened, giving the government room to raise utility prices. China’s consumer price index rose 2.4 percent in April.  Australian employers boosted payrolls more than four times economists’ estimated in April as the job market weathers a weaker domestic outlook. The number of people employed rose by 50,100 from a month earlier, after a revised 31,100 drop in March.

New Zealand employers added the most workers on record in the three months through March, driving the kiwi to erase losses triggered yesterday by the central bank’s announcement of intervention to weaken it.

The pound traded near its highest level in almost three months against the dollar on speculation the Bank of England will refrain from expanding monetary stimulus at a policy meeting. The euro rallied the most in three weeks against the dollar as German industrial production unexpectedly rose for a second month in March, a sign that Europe’s largest economy may be returning to growth.

Gold declined, paring the biggest advance in two weeks yesterday after U.S. and European stocks rallied and holdings in the SPDR Gold Trust extended a drop. ETF’s remain sidelined after the huge drop earlier this month sparked a huge sell off of ETF holdings. There has been a recent shift in portfolio with investors taking likelihood for stock market as Dow and S&P 500 hit record highs. Since the beginning of the year, S&P 500 index has risen 13 percent while, gold prices have plummeted 13 percent. There is clear case of divergence between the gold prices and equity market. The yellow metal prices are failing to gain traction despite news that normally would have supported prices to scale higher, including persistent easing measures from central banks.

Silver climbed 0.57% this morning gaining over 13 cents to trade at 24.063, with strong Chinese export numbers helping to support the metals pack and a climb in precious metals silver is enjoying a double bang riding the way this morning while gold gave back some gains, silver continued to climb.

Gold Shifting To A Down Trend

Gold Shifting To A Down Trend
Gold Shifting To A Down Trend

Gold has begun to lose its edge. As global inflation remains under control and market sentiment remains in a positive tone, gold traders are losing interest in the commodity. With the equities markets hitting records around the globe traders are looking for more risk and more profits. With the US and Chinese economy on the mend, regardless of strength of the momentum, the recovery is here to stay. The US dealt with the “fiscal crisis” which dragged through March, but this behind, consumers and businesses are spending. Friday’s job report showed a huge increase in jobs creation and a drop in unemployment. This morning Chinese trade numbers showed an increase in imports and a surge in exports well above expectations.  Gold gained a bit this morning to trade at 1454.95 gaining in the Asian session on a slightly weaker US dollar.

With the global central banks pushing monetary stimulus and growth, it seems that the bankers are working together. The market surprise yesterday was the rate cut by the Reserve Bank of Australia, catching traders off guard. The Bank of England meeting scheduled for tomorrow may do the same, as traders are not sure what Governor King might do. Many are hoping for additional asset purchases, which was supported by the bank governor at the last meeting but he was out voted.

The united effort to push recovery is giving traders a bit of hope as they see more and more businesses reporting higher earning and future forecasts. HSBC reported above expectations earning yesterday.

Gold futures lost more than 1% and closed near their lowest level in a week, as investors still remain concerned about big outflows from gold exchange-traded funds that have pushed prices of the metal down by nearly 8% last month. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,057.79 tons, as on May 7. Silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 10,431.39 tons, as on May 2. Gold imports by China from Hong Kong have more than doubled to an all-time high in March as buyers boosted purchases, underscoring increased bullion demand in the world’s second largest economy. Mainland buyers purchased 223.52 metric tons, including scrap, compared with 97.106 metric tons in February, according to Hong Kong’s Census and Statistics Department.

Tomorrow the G7 will meet tomorrow and the main discussion will economic policies and the push for growth and the move from austerity measures, which might help the eurozone, emerge from their ongoing economic crisis. A positive communique from the group could see gold tumble further. This will be followed by the EcoFin meeting on Monday and Tuesday, and a move forward with the plans for a banking supervisor or an overall plan for the eurozone will weigh on gold as traders are seeking higher risk as global sentiment continues to remain on a positive note.

Silver is doing a bit better than gold as the sentiment shifts to growth, the industrial metal side of silver helps keep silver on the positive side, trading at 23.913.

Gold, Silver and Copper Trading In The Red

Gold, Platinum, Silver BNSGold is trading at 1464.9 down by $3.05 as traders seemed to moving more and more money into equities. As economic data shows an improvement in the US economy and central bank policies push traders to seek higher risk assets. Asian shares climbed as investors cheered the upbeat U.S. labor force report which sent Wall Street to an all-time closing high last week. European stocks close off their lows Monday, after hitting five-year highs last week, amid hopes for further central bank stimulus and as investors largely shrugged off a tepid euro zone economic report. US Stocks finished narrowly mixed Monday as trading was largely muted with no major economic news on tap and as investors hesitated to jump in after the recent rally, but the S&P 500 rose to touch a fresh all-time high. Japanese traders returned to the market this morning after a long holiday to push the Nikkei up close to 3%.

Gold eased in quiet trading session, due to continuous outflow from bullion-backed exchange-traded funds, and investors were still weighing the metal’s inflation-hedge appeal after last week’s encouraging US jobs data. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,062.3 tons, as on May 6. Silver holdings of ishares silver trust, the largest ETF backed by the metal, declined to 10,431.39 tons, as on May 2.

Physical buying in India and China fell as India increased taxes and buyers were exhausted after buying precious metals at record paces since gold’s decline in mid-month. Investors in India and China, the world’s two largest gold consumers, have also been taking advantage of lower prices to stock up on the precious metal. Purchases of gold bullion bars and jewelry have raised regional premiums for the physical metal in recent weeks. The recent surge of buying by central banks has also subsided.

This morning the Reserve Bank of Australia reduced its key lending rate to 2.75% from 3.00% surprising markets. Australia is the 3rd largest gold exporter in the world and the decrease in interest rates could help gold prices lower, while the Aussie tumbled over 60 points after the announcement to trade at 1.0193.

Silver is following cues from gold trading at 23.728 down by just under 1% as global industrial demand also weakens the metals family. Copper futures eased on Monday, in a quiet trading session as some traders booked profits following the largest one-day price increase in 18-months. Copper futures for July delivery closed down by 0.1% at $3.3105 on the COMEX division of the NYMEX. Euro‐zone business output shrank at a less rapid pace in April, but the downturn broadened to include Germany as well as France, Italy and Spain, meaning companies in the bloc’s four biggest economies curtailed their activity.

Gold and Silver Tracking Higher On Jobs Data

Gold and Silver Tracking Higher On Jobs Data
Gold and Silver Tracking Higher On Jobs Data
China’s Manufacturing PMI slowed to 50.6 in April 2013 from March’s 11-month high of 50.9. While the U.S. Manufacturing PMI slowed to 50.7 in April 2013 from 51.3 in March and the Eurozone Manufacturing PMI was at 46.7 in April 2013 from 46.8 in March.

The European Central Bank has cut interest rates for the first time in 10 months, promising to provide as much liquidity as eurozone banks need well into next year and to help smaller companies get access to credit. The ECB lowered its main interest rate by a quarter percentage point to a record low 0.50 percent.

The ADP private payroll data reported that only 88k jobs were created well below expectations. Thursday’s weekly unemployment count showed fewer new claims and fewer ongoing claims. These reports set the expectations for Friday’s nonfarm payroll report. This was the surprise of the week or possibly the month, the US created more jobs than expected in the private and public sector. The U.S. Unemployment Rate hit a four-year low in April 2013. The Unemployment Rate fell to 7.5 percent in April, its lowest rate since December 2008.

Once again this questions the Fed’s asset purchases, as Mr. Bernanke pointed out in the beginning of the week as the FOMC concluded its two day meeting, that at present the Fed would continue its 85billion per month in purchases but that number could increase or decrease as the economy demanded. Gold neared its highest level in more than two weeks on this morning, but gains may be capped by a rally in equity markets and promising U.S. jobs data that dampened speculation the Federal Reserve may boost monetary stimulus. Bullion has slipped almost 12 percent so far this year, having posted annual gains in the past 12 consecutive years as easy monetary policy prompted investors to buy the precious metal to hedge against inflation and economic uncertainties.

This morning gold has gained over $11.00 to trade at 1475.25 recovering to Friday morning prices. Gold prices gave up earlier gains at the end of the week slumping into negative territory, after monthly data showed U.S. no-farm payrolls rose more than expected in April. The U.S. economy added 165,000 jobs last month, the Labor Department said Friday. Gold traders closely follow employment data for clues about future Federal Reserve monetary policy. The Fed had indicated that a stronger labor market is an important consideration in rolling back its easy-money policies. Fears that the Fed’s easy-money policies would spark inflation had led some to guess what the Fed’s might due, but at this time inflation is well under control.

Silver is taking its cues from gold this morning adding 17 cents to trade at 24.19 climbing from last week’s low in the $22.00 price level. Last week’s ECB rate cut did not have much of an effect on the markets as it was overshadowed by Friday’s nonfarm payroll report. This morning metals seem to be trading in the green, combing the ECB rate and the better than expected jobs report in the US, which is giving a bump to metals. Base metal futures on the MCX were trading 2-4% higher today tracking similar rise in benchmark contracts on the London Metal Exchange due to the stronger euro.

Crude Oil Gets Pounded After Eco Data and Inventory

Crude Oil Gets Pounded After Eco Data and Inventory
Crude Oil Gets Pounded After Eco Data and Inventory

Crude oil tumbled to trade close to the 90.00 price level on economic data and high inventories. Crude was trading on a positive note just a day before close to the 94.00 price level. A continuous flow of weak economic data from China, US and the eurozone weighed heavily on the commodity. Price was being supported by hopes that the US FOMC might increase their asset purchases. On Wednesday the US Fed decided to hold rates and policy at current levels stating that they could increase or decrease the amount of stimulus based on economic data. They gave little other indications of what or when this might happen. Crude oil is trading at 91.03 at this writing.

Key gauges of the factory sector and labor market showed further deceleration in April, reinforcing fears about another spring economic slowdown. The Institute for Supply Management said its measure of U.S. manufacturing fell to 50.7 from 51.3 in March, putting it slightly above the dividing line between expansion and contraction. The survey of purchasing managers found that raw-materials prices and factory employment stagnated. But new orders and production both picked up steam, offering some hope for the coming months. The US dollar is trading at 81.70 after the FOMC decision

A private report yesterday on private-sector employment indicated a continued labor-market slowdown. Automatic Data Processing Inc. The report estimated private employers added 119,000 jobs in April. That was below the firms’ downwardly revised estimate of a rise of 131,000 jobs in March. A report on March construction activity released Wednesday by the Commerce Department showed a 1.7% decline in construction spending in March. A pullback from governments and businesses outweighed an increase in residential construction tied to the improving housing market.

Rising unemployment in the eurozone also weighed heavily on the commodity.

Yesterday’s weekly EIA inventory upset and surprised traders. Crude stocks in the US rose by 6.7m barrels last week to their highest level on record at 395.3m barrels, data from the Energy Information Administration showed; far exceeding forecasts of a 1m barrel build up. Financial markets have rallied strongly since the middle of 2012 on hopes of a sustained recovery in the US, the resolution of the eurozone crisis and a soft landing for China. All three assumptions are now being questioned after a weak run of data that has included lower than expected growth in China, rising unemployment in Europe, and poor jobs data from the US.

China’s official manufacturing PMI dipped from 50.9 to 50.6 last month, with the weakness attributed to a fall in export orders. The news raised fresh doubts about the strength of the economy following lower than predicted growth in the first three months of 2013.

Markets are braced for the European Central Bank to cut the cost of borrowing to 0.5% on Thursday and, following last night’s meeting, see no early prospect of the Federal Reserve withdrawing any of the stimulus it is providing to support demand. The euro is trading at 1.3174 ahead of today’s decision

 

Crude Oil Prices Out Of Sync With Supply, Demand And Growth

Crude Oil Prices Out Of Sync With Supply, Demand And Growth
Crude Oil Prices Out Of Sync With Supply, Demand And Growth
Crude oil remains high based on demand and the economic decline. GDP in two of the major economies missed their mark in April, with the US reporting at 2.5% against an expectation of 3% in growth, while the Chinese reported growth at a respectable 7.7% against forecasts of 8%. With growth down, the demand for oil should be falling along with prices. The eurozone remains on the verge of a disaster, with no silver lining which should be weighing heavily on the supply and demand outlook.

Recently the IMF cut its global growth rate for 2013 citing the declines in Europe as a main factor. This sentiment was echoed by the World Bank. With lower growth, the demand for energy products should decline also but it does not seem to be holding true in the crude oil markets. This week crude oil traded above 94.00 before falling to trade this morning at 93.03.

Granted monetary stimulus around the globe continues to help support prices, but when the stimulus does not flow into stronger growth numbers, the implied demand on crude oil does not meet the actual. Sure the housing market in the US is improving and the overall economic situation is better, but just a few months ago, the US was showing a strong recovery, now it seems that this recovery has stalled and become erratic, so why the high price of crude oil.

Once again this morning Chinese data disappointed speculators. China’s official gauge of manufacturing activity fell in April, though the index still registered mild growth. The manufacturing Purchasing Managers’ Index came in at 50.6, and economists surveyed by Dow Jones Newswires had expected an unchanged reading from March at 50.9. China’s PMI report suggests that the China economy remains on the recovery path, but the recovery momentum is relatively weak. China, the world’s second largest-economy, is a major consumer of oil and other commodities.

HSBC last week released a similarly weaker reading of its version of the China manufacturing PMI for April. It fell to a preliminary result of 50.5, down from its final March reading of 51.6. The final HSBC PMI for China is slated for release Thursday. Investors may seek more demand-outlook clues on Wednesday from the U.S. Federal Reserve as it wraps up its two-day monetary policy meeting.

The American Petroleum Institute said U.S. crude supplies surged 5.2 million barrels in the week ended April 26. A survey of analysts had forecast a climb of 1.4 million barrels. Investors, meanwhile, are also waiting for information on U.S. stockpiles of crude and refined products. Analysts surveyed by Platts estimate that oil supplies rose by 1.4 million barrels in the week ended Friday. The report from the Energy Department’s Energy Information Administration will be released later Wednesday.

The weaker US dollar seems to be the only supporting factor was the greenback has tumbled from 83.00 last week to trade at 81.75 as traders wait eagerly on the FOMC decision. The combination of the FOMC statement and the EIA inventory release could cause some erratic price movement later this afternoon.

Gold, Silver and Copper Trading In The Green

Gold, Silver and Copper Trading In The Green
Gold, Silver and Copper Trading In The Green
Precious metals ended higher, moving in tandem with the upside in the entire commodity pack. Gold and silver continue to climb during the Tuesday Asian session. Gold reached 1472.05 with silver trading at 24.380. Markets are deriving cues from the probability of an interest rate cut by the European Central Bank. In this regard, ECB is expected to lower interest rates by 25 bps from the current level 0.75%. European officials are reconsidering the monetary policy options as austerity measures have failed to yield the desired results in debt troubled nations. At its meeting early in April, Mr. Draghi indicated that the bank had the tools and was ready to act if data over the next few weeks did not improve. The weeks have passed and the data remains lackluster, so the odds are in favor of a rate cut, but no one can pre-guess Mr. Draghi.

Although strong physical off take in gold remains supportive for prices, persistent outflow in ETF holdings remain a concern. It seems that the recent decline in prices have enticed the retail buyers back in to the markets, with a major chunk of them grabbing this opportunity with both hands. However, funds and noncommercial are opting out, which is manifested by the subdued activity in ETF and futures markets. This pent up demand leading to a lot of news flow is pulling speculators back to the markets on the misconception that the market is returning to its recent uptrend.  Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,080.64 tons, as on April 29. Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 10,407.44 tons, as on April 29. Gold imports to India will become slightly more expensive, as the government announced over the weekend that it has increased the base rate for calculating import taxes on the precious metal. The government has raised the base rate to $472 per 10 grams from $449 per 10 grams.

LME base metals ended moderately higher, however the broader dynamic still do not remain supportive. The bleak economic landscape in China and Europe continue to cast dark shadow over the demand prospects for the non‐ferrous metals. Industrial metals and base metals remain weak. Silver though continues to gain as the precious metals side remains very strong helping silver to climb from its 22. 00 price range to the 24.00 price, which still is a cheap price for the commodity. The divergence of ETFs as gold declines but silver showed an increase is helping silver to gain an edge against the negative pull of base metals. Copper futures traded positively, extending a recovery from 1-1/2 year lows hit last week supported by hopes for more US and European central bank monetary easing and on signs of life in the physical markets. Copper futures for May delivery closed up by 1.4% at $3.2295 on the COMEX division of the NYMEX.