TOPIC: Gold Rebounds Above $1,700 After Bernanke’s Commen
Gold Rebounds Above $1,700 After Bernanke’s Commen 1 year, 2 months ago #48
Gold Rebounds Above $1,700 After Bernanke’s Comments Spark Rout
2012-03-01 12:56:23.588 GMT
By Maria Kolesnikova and Glenys Sim
March 1 (Bloomberg) -- Gold may gain in New York as investors bought the metal after it tumbled to the lowest level in more than a month and exchange-traded product holdings reached a record. Silver and platinum climbed.
Bullion lost 4.3 percent yesterday in the biggest one-day slump since Dec. 14, after the Federal Reserve gave no signal it favored a third round of quantitative easing, or QE3, to stimulate the economy. Manufacturing improved in China and the euro region, reports showed before data that might indicate U.S.
factory activity climbed to an eight-month high. Spain and France sold 12.5 billion euros ($16.7 billion) of bonds as European Central Bank loans to banks helped spur demand.
“Gains today are a natural step after the market oversold yesterday,” said Nikos Kavalis, an analyst at Royal Bank of Scotland Group Plc in London. Good purchasing managers’ index prints also helped, he said.
Gold for April delivery gained 0.2 percent to $1,715.10 an ounce by 7:40 a.m. on the Comex in New York, and earlier today advanced as much as 0.9 percent. Gold for immediate delivery rose 1 percent to $1,713.65 an ounce in London.
Demand for gold also increased as European inflation accelerated in February and political tensions in the Middle East boosted oil prices even as the euro-area economy heads into a recession.
Fed Chairman Ben S. Bernanke’s remarks to lawmakers in Washington boosted the dollar as much as 0.8 percent against a basket of currencies yesterday, cutting gold’s appeal. The European Central Bank yesterday awarded 529.5 billion euros
($707 billion) in a second offering of three-year loans to 800 banks under the so-called longer-term refinancing operation.
“It wasn’t just Bernanke not saying anything about QE3, it was the Europeans saying the LTRO is the last one,” Peter Hickson, the Hong Kong-based head of commodities research at UBS AG, said referring to the ECB’s second long-term financing operation. “This is a pretty changed outlook because we’ve been living on the hype of liquidity, and how it’s going to move markets.”
While immediate-delivery gold plunged below $1,700 yesterday for the first time since Jan. 25, holdings in ETPs climbed to a record 2,403.242 metric tons, according to data tracked by Bloomberg. Spot gold rallied 11 percent in January and 2.7 percent last month to the close on Feb. 28.
The metal is still 9.4 percent higher in 2012, extending an 11-year rally, boosted by Europe’s sovereign-debt crisis, central-bank demand and concern that inflation may accelerate.
The U.S. Dollar Index was little changed today.
Gold for June delivery dropped as much as 4.3 percent to
348.83 yuan a gram on the Shanghai Futures Exchange. Volumes for the most-traded contract were 103,474 contracts, the highest since Jan. 13. Each contract equals a kilogram (32.2 troy
ounces) of gold.
Silver for May delivery rose 0.7 percent to $34.875 an ounce after tumbling 6.9 percent yesterday. Silver holdings in exchange-traded products expanded for a fourth day to 17,733.96 tons yesterday, the highest level since May.
Platinum for April delivery rose 0.4 percent to 1,698.50 an ounce after dropping 1.8 percent yesterday. Palladium for June delivery fell 0.4 percent to $705.60 an ounce, after yesterday’s
1.9 percent decline.
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Re: Gold Rebounds Above $1,700 After Bernanke’s Commen 1 year, 2 months ago #49
Canada Dollar Rises to Highest Since September on Global Outlook
2012-03-01 18:35:21.524 GMT
By Austen Sherman and Chris Fournier
March 1 (Bloomberg) -- Canada’s dollar gained to a five- month high against its U.S. counterpart on optimism demand for raw materials will accelerate as the global economy expands.
The currency rose for a fourth day, the longest string of advances in more than a month, as jobless claims in the U.S., the nation’s biggest trade partner, fell to the lowest level in four years. It gained versus the majority of its most-traded peers before data tomorrow that may show the Canadian economy grew in the fourth quarter. China’s manufacturing expanded, a report showed.
“The data coming out at the moment from the major economies seems reasonably encouraging,” said Tom Levinson, a currency strategist in London at ING Groep NV. In the absence of “another issue from the euro zone, the expectation would be that those riskier assets, commodities, commodity currencies and emerging market high-yielding currencies all extend the gains that they’ve already put on this year.”
Canada’s currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, advanced 0.5 percent to 98.46 cents per U.S. dollar at 1:33 p.m. in Toronto. It reached 98.42 cents, the strongest since Sept. 19. One Canadian dollar purchases $1.0156.
The loonie briefly pared gains after a gauge of U.S.
manufacturing unexpectedly fell last month. The Institute for Supply Management’s factory index declined to 52.4, from 54.1 in January, the Tempe, Arizona-based group’s data showed today.
Stocks rose, with the Standard & Poor’s 500 Index advancing
0.8 percent and the MSCI World Index gaining 0.5 percent.
The Canadian currency has gained 3.7 percent this year versus the U.S. dollar on increased demand for higher-yielding assets. Canada derives about half its export revenue from raw materials such as crude oil, its biggest export, and copper, lumber, gold and wheat.
Crude rallied a second day as the U.S. boosted pressure on Iran to halt its nuclear program and escalated warnings the Persian Gulf oil producer may be attacked. That spurred bets global supplies of the commodity may shrink. Crude for April delivery gained 1.1 percent to $108.11 a barrel in New York, approaching a nine-month high of $109.95 reached last week.
Canada’s dollar would probably weaken if oil prices were to surge amid market shocks centered on Iran because such an event would damp appetite for riskier assets as investors sought haven, according to Bank of America Merrill Lynch. The currency has been more highly correlated with risk than with oil over the past year, it said.
“An oil shock precipitated by an event such as an attack on Iran would certainly be a risk-off scenario, as opposed to longer-term increases resulting from an offshoot of stronger growth,” David Grad and John Shin, New York-based currency strategists at the firm, wrote in a client note today. “The risk-off effect would dominate the oil-price effect.”
The loonie’s 120-day correlation coefficient with the S&P
500 today was 0.86. A reading of 1 would indicate they move in lockstep. The currency’s correlation coefficient with crude oil futures was 0.59.
Applications for unemployment benefits in the U.S. fell to
351,000 in the week ended Feb. 25, a level matching the lowest since March 2008, Labor Department figures showed today.
Economists in a Bloomberg survey forecast 355,000 claims.
In China, the purchasing managers’ index rose for a third month, rising to 51.0 from 50.5 in January, the statistics bureau and logistics federation said in a statement today. It was the highest level since September. The dividing line between expansion and contraction is 50.
Canada’s dollar remained higher as data showed then nation’s current account deficit for the fourth quarter narrowed to C$10.3 billion ($10.5 billion) compared with a revised C$12.3 billion in the third quarter, Statistics Canada said in Ottawa.
Government bonds fell, pushing the yield on Canada’s benchmark 10-year note up four basis points, or 0.04 percentage point, to 2.02 percent. The price of the 3.25 percent security due in June 2021 dropped 32 cents to C$110.31.
The loonie rose for a second day versus the euro, its first back-to-back gains in two weeks, as euro-area finance ministers discussed the region’s sovereign-debt crisis before a European Union summit. It appreciated 0.6 percent to C$1.3110 to the 17- nation currency.
The Canadian currency climbed 1.5 percent yesterday against the euro, the most since May 2011, after the European Central Bank loaned 800 euro-area banks 529.5 billion euros ($712.2
billion) to shore up liquidity.
The loonie may be approaching a retreat against its U.S.
counterpart. The greenback was at 31.3 today on the 14-day relative strength index against the Canadian dollar, compared with 35.6 yesterday. A reading below 30 signals an asset may be due to reverse direction.
The Canadian dollar gained 1.1 percent over the past week against nine developed-nation counterparts monitored by Bloomberg Correlation Weighted Currency Indexes. The U.S. dollar fell 0.3 percent, and the euro declined 0.8 percent.
For Related News and Information:
Foreign-exchange information platform: FXIP <GO> Canadian FX forecasts: FXFC CAD <GO> Top currency stories: TOP FX <GO> Top Canadian stories: TOPC <GO> Canadian-dollar volatility: CANA 9 <GO>
--Editors: Greg Storey, Kenneth Pringle
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