Bullion touched US$1669 an ounce yesterday before closing, with a drop of 3.54%, at US$1594 an
ounce. It reached US$1669 an ounce as Euro debt resolution became more and more doubtful.
Investors also took advantage of low prices indulging in short selling, which resulted in fluctuating
price levels.
The main demand for the metal that is causing its prices to increase is from India and China who
have always been the largest and second largest consumers of gold. Moreover, the peak season for
gold has already started in September with Eid and will continue in October and onwards owing to
Diwali and weddings which will further boost the metal’s consumption.
However, global recession threat including expected deceleration in China’s growth, falling demand of
US consumer goods etc is causing all commodities to fall, and is also spilling its effects on gold. Plus the
strengthening of dollar has also resulted in the precious metal losing its appeal as an investment
haven.
The metal has touched US$1583 an ounce today breaking the support level of US$1588 an ounce. Thus
it is possible that it dips to US$1533 an ounce once again. This period is for investors to perform short
selling; buying at around US$1587‐US$1600 and selling as it reaches US$1644‐US$1650 an ounce.
Using Fibonacci Retracements we have estimated the following resistance levels for gold:
R1=US$1651; R2=US$1714; R3=US$1793
Analyst:
Ms. Gulshan D
Ferozepurwalla*
gulshan@scstrade.com
+92‐21‐111 111 721
September 29, 2011
Pakistan Research
Commodities Daily
MARKET WATCH
(Prices as on September 28,
2011)
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Showing posts with label GOLD. Show all posts
Showing posts with label GOLD. Show all posts
Friday, September 30, 2011
Wednesday, September 28, 2011
GOLD TRENDS 29-9-2011 Gold touched US$1533 an ounce yesterday and closed at US$1630 an ounce with a ‐0.77% change.
Gold touched US$1533 an ounce yesterday and closed at US$1630 an ounce with a ‐0.77%
change.
It touched US$1663 an ounce as investors realized that the Greece debt crisis is not going to
be solved anytime soon; in fact speculators consider it to be on the brink of a default.
However, investors are in a frenzy witnessing the augmenting dollar against the Euro, which
is reducing gold’s demand as an alternative investment to dollar and therefore want to
realize as much cash as possible by selling bullion and move towards Treasuries.
We expect gold to dwindle in short term on account of dubious investors, which may cause
the metal to touch the US$1533 low once again. However, it appears that the uncertainty of
Euro zone debt resolution is bringing investors a bit closer to gold which is maintaining its
prices above the support level of US$1583 an ounce for now. The support level of US$1648 is
very weak and the metal appears to break this level time and again in daily trading.
Furthermore, gold is expected to fall in the short term if any news related to the efforts to
resolve the Greece debt issue, surfaces.
change.
It touched US$1663 an ounce as investors realized that the Greece debt crisis is not going to
be solved anytime soon; in fact speculators consider it to be on the brink of a default.
However, investors are in a frenzy witnessing the augmenting dollar against the Euro, which
is reducing gold’s demand as an alternative investment to dollar and therefore want to
realize as much cash as possible by selling bullion and move towards Treasuries.
We expect gold to dwindle in short term on account of dubious investors, which may cause
the metal to touch the US$1533 low once again. However, it appears that the uncertainty of
Euro zone debt resolution is bringing investors a bit closer to gold which is maintaining its
prices above the support level of US$1583 an ounce for now. The support level of US$1648 is
very weak and the metal appears to break this level time and again in daily trading.
Furthermore, gold is expected to fall in the short term if any news related to the efforts to
resolve the Greece debt issue, surfaces.
Monday, September 26, 2011
GOLD TRENDS third support level of US$1650 an ounce by touching US$1628 an ounce on September 23, 2011. It opened today at US$1650 an ounce an
Gold has broken its third support level of US$1650 an ounce by touching US$1628 an ounce
on September 23, 2011. It opened today at US$1650 an ounce and is hovering at US$1597 an
ounce. This decline has been brought about by the rise in dollar against a basket of
currencies, the efforts by European leaders to come up with new ways to resolve the debt
issue and the decision by the Fed to replace short term debt to long term bonds. Moreover,
the fear of global recession has caused investors to sell their metal holdings and realize
whatever gains they can and as fast as they can.
We expect the metal to touch US$1475 an ounce in the short term and go further beyond
this level if investors continue to invest in dollar and divest from gold.
However, this decline is expected to reverse by the end of December 2011 as we should not
forget that the US debt is still lingering, the Euro zone debt crisis is still unresolved,
unemployment is not declining and growth is decelerating in the large world economies.
Moreover, a quantitative leasing‐3 is expected in 2012 which would support gold causing it to
once again become an investment haven.
It is also very likely that investors start buying the precious metal at these low prices,
resulting in an increase in demand for bullion and subsequently raising prices.
on September 23, 2011. It opened today at US$1650 an ounce and is hovering at US$1597 an
ounce. This decline has been brought about by the rise in dollar against a basket of
currencies, the efforts by European leaders to come up with new ways to resolve the debt
issue and the decision by the Fed to replace short term debt to long term bonds. Moreover,
the fear of global recession has caused investors to sell their metal holdings and realize
whatever gains they can and as fast as they can.
We expect the metal to touch US$1475 an ounce in the short term and go further beyond
this level if investors continue to invest in dollar and divest from gold.
However, this decline is expected to reverse by the end of December 2011 as we should not
forget that the US debt is still lingering, the Euro zone debt crisis is still unresolved,
unemployment is not declining and growth is decelerating in the large world economies.
Moreover, a quantitative leasing‐3 is expected in 2012 which would support gold causing it to
once again become an investment haven.
It is also very likely that investors start buying the precious metal at these low prices,
resulting in an increase in demand for bullion and subsequently raising prices.
Friday, September 16, 2011
Gold fell yesterday by 0.66% closing at US$1824 an ounce after touching US$1844 an ounce.
Gold fell yesterday by 0.66% closing at US$1824 an ounce after touching US$1844 an ounce. This
decline has been mainly caused by the news that French and German officials are convinced that the
debt issue would be resolved and that countries are being probed to incur efforts to do so.
French President Nicolas Sarkozy and German Chancellor Angela Merkel received international calls to
increase efforts in combating the European debt crisis.
According to recent news UBS AG (UBSN), Switzerland’s biggest bank, faced a trading loss of about
$2bn owing to unauthorised trading at its investment bank. However, European stocks were not
affected by this news and instead climbed as the assurance from Germany and France, that Greece will
remain a member of the euro, outweighed this huge trading loss.
Gold also declined as vice chairman of the China’s top economic planning agency stated that China is
willing to help the debt burdened European nation by buying Euro bonds from countries who are
involved in this debt nightmare.
If gold closes below the US$1793 support level it is feared to reach around US$1700‐ US$1740 an
ounce. However, if the plans to resolve the debt issue are not soon put into action, the bullion may rise
to a resistance level of around US$1880 an ounce.
In the short term we expect gold to hover at low prices as the US stock market is reviving, the Jobs
plan is under consideration and the European debt issue is under scrutiny.
decline has been mainly caused by the news that French and German officials are convinced that the
debt issue would be resolved and that countries are being probed to incur efforts to do so.
French President Nicolas Sarkozy and German Chancellor Angela Merkel received international calls to
increase efforts in combating the European debt crisis.
According to recent news UBS AG (UBSN), Switzerland’s biggest bank, faced a trading loss of about
$2bn owing to unauthorised trading at its investment bank. However, European stocks were not
affected by this news and instead climbed as the assurance from Germany and France, that Greece will
remain a member of the euro, outweighed this huge trading loss.
Gold also declined as vice chairman of the China’s top economic planning agency stated that China is
willing to help the debt burdened European nation by buying Euro bonds from countries who are
involved in this debt nightmare.
If gold closes below the US$1793 support level it is feared to reach around US$1700‐ US$1740 an
ounce. However, if the plans to resolve the debt issue are not soon put into action, the bullion may rise
to a resistance level of around US$1880 an ounce.
In the short term we expect gold to hover at low prices as the US stock market is reviving, the Jobs
plan is under consideration and the European debt issue is under scrutiny.
Friday, September 9, 2011
Global slowdown benefiting gold
Once again bullion experienced a rise on account of fear of global economic slowdown. It touched
US$1794 an ounce before closing at US$1787 an ounce hence displaying a minor positive change of
0.07%.
This global economic deceleration is evident from the following important information:
• In London, the national unemployment total increased more than forecast, with an increase
of 38,000 to 2.49mn.
• There have been forecasts for a slower growth in China.
• Bad loans at Chinese banks are expected to rise to very high levels, hence eroding profits and
slowing growth. China’s local governments are trying hard to repay their debt.
• Japan’s exports fell more than expected in July on account of global slowdown and declining
overseas currencies.
The exports decreased 3.3% in July as compared to same period last year.
Exports to China, which is Japan’s largest overseas market, dropped 1% in July.
Shipments to the U.S. declined by 8.2% and witnessed a 6% increase to those made
to the European Union.
• Japan’s GDP reduced at an annual rate of 1.3% in the 3months ended June 30 owing to the
earthquake that interrupted manufacturers’ supply chains.
• Germany's GDP increased by a meagre 0.1% in the 2nd quarter which was less than the
expected increase of 0.5%.
The above factors are attracting investors towards the yellow metal as an investment haven and
causing a hike in price day after day. Hence, on the basis of the continuing economic slowdown and
the unresolved European debt crisis, we expect gold to increase further and cross the US$1814 mark.
However, a fall to US$1752 an ounce could be expected once more as the metal is soaring too high
US$1794 an ounce before closing at US$1787 an ounce hence displaying a minor positive change of
0.07%.
This global economic deceleration is evident from the following important information:
• In London, the national unemployment total increased more than forecast, with an increase
of 38,000 to 2.49mn.
• There have been forecasts for a slower growth in China.
• Bad loans at Chinese banks are expected to rise to very high levels, hence eroding profits and
slowing growth. China’s local governments are trying hard to repay their debt.
• Japan’s exports fell more than expected in July on account of global slowdown and declining
overseas currencies.
The exports decreased 3.3% in July as compared to same period last year.
Exports to China, which is Japan’s largest overseas market, dropped 1% in July.
Shipments to the U.S. declined by 8.2% and witnessed a 6% increase to those made
to the European Union.
• Japan’s GDP reduced at an annual rate of 1.3% in the 3months ended June 30 owing to the
earthquake that interrupted manufacturers’ supply chains.
• Germany's GDP increased by a meagre 0.1% in the 2nd quarter which was less than the
expected increase of 0.5%.
The above factors are attracting investors towards the yellow metal as an investment haven and
causing a hike in price day after day. Hence, on the basis of the continuing economic slowdown and
the unresolved European debt crisis, we expect gold to increase further and cross the US$1814 mark.
However, a fall to US$1752 an ounce could be expected once more as the metal is soaring too high
Gold expected to touch US$1923 an ounce
Once again we saw bullion crossing the US$1900 mark and touching US$1903 an ounce before
closing at US$1897 an ounce. Thus the metal displayed a positive movement of 0.84%; even
rising above platinum.
As mentioned earlier the main reasons behind this rally is the growing concern over European
debt crisis which is causing investors to doubt the Euro zone’s economic stability and the
slowdown in economic growth in the world’s most powerful country, America, which is
dragging people away from investing their money in equities.
The decelerated growth in the US was evident from the close to zero increase in
employment in the month of August which attracted investors towards bullion as an
investment haven.
Furthermore, the increasing inflation in China which reached 6.5% in July this year, has
forced investors to buy gold for hedging purposes. Moreover, a slowdown in China’s
manufacturing industry was seen in August but with cost increasing further.
Hence all these factors contribute to the increase in gold price, which we expect to touch
US$1923 an ounce; though occasional drop in the metal on reaching high points can be
expected.
Using Fibonacci Retracements we have estimate the following support levels:
S1=US$1796; S2=US$1717; S3=US$1653
closing at US$1897 an ounce. Thus the metal displayed a positive movement of 0.84%; even
rising above platinum.
As mentioned earlier the main reasons behind this rally is the growing concern over European
debt crisis which is causing investors to doubt the Euro zone’s economic stability and the
slowdown in economic growth in the world’s most powerful country, America, which is
dragging people away from investing their money in equities.
The decelerated growth in the US was evident from the close to zero increase in
employment in the month of August which attracted investors towards bullion as an
investment haven.
Furthermore, the increasing inflation in China which reached 6.5% in July this year, has
forced investors to buy gold for hedging purposes. Moreover, a slowdown in China’s
manufacturing industry was seen in August but with cost increasing further.
Hence all these factors contribute to the increase in gold price, which we expect to touch
US$1923 an ounce; though occasional drop in the metal on reaching high points can be
expected.
Using Fibonacci Retracements we have estimate the following support levels:
S1=US$1796; S2=US$1717; S3=US$1653
Gold to decline to around US$1700 an ounce as equities strengthen
The precious metal dipped further yesterday to US$1793 an ounce before closing at US$1813 an ounce.
The decline was fuelled by the rise equities. Equities rallied because investors expected a proposal by
Obama in his speech to congress, to introduce US$300bn to generate jobs. The current unemployment
rate is around 9%.
To boost the decelerating economy it is expected that in Fed’s meeting on September 20‐21, 2011 a
few short‐term Treasury securities would be replaced by long‐term debt in order to reduce yield on
long term debt. This would attract investors towards gold for investing their wealth thus increasing
bullion prices.
Moreover, to support those unemployed Federal Reserve Bank of Chicago called for a commitment to
keep interest rates low until unemployment falls to 7.5% whilst keeping medium‐term inflation below
3%.
Furthermore, according to the Federal Statistics Office in Wiesbaden German exports fell 1.8% in July,
after dropping 1.2%. Imports also declined 0.3%. This indicates slow down in the global economy and
will tend to benefit gold.
We estimate that as the US economy continues to recover gold will fall near to US$1700 an ounce but
will also rally nearing 2012 as US cuts spending and economic slowdown hits various other countries
such as Japan, China etc.
The decline was fuelled by the rise equities. Equities rallied because investors expected a proposal by
Obama in his speech to congress, to introduce US$300bn to generate jobs. The current unemployment
rate is around 9%.
To boost the decelerating economy it is expected that in Fed’s meeting on September 20‐21, 2011 a
few short‐term Treasury securities would be replaced by long‐term debt in order to reduce yield on
long term debt. This would attract investors towards gold for investing their wealth thus increasing
bullion prices.
Moreover, to support those unemployed Federal Reserve Bank of Chicago called for a commitment to
keep interest rates low until unemployment falls to 7.5% whilst keeping medium‐term inflation below
3%.
Furthermore, according to the Federal Statistics Office in Wiesbaden German exports fell 1.8% in July,
after dropping 1.2%. Imports also declined 0.3%. This indicates slow down in the global economy and
will tend to benefit gold.
We estimate that as the US economy continues to recover gold will fall near to US$1700 an ounce but
will also rally nearing 2012 as US cuts spending and economic slowdown hits various other countries
such as Japan, China etc.
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