FM: US GOLD OPEN - Comex gold takes breather before US data deluge begins
New York 13/08/2012 - Gold futures drifted sideways in quiet summer trade in the US on Monday but the action could pick up over the next several sessions after the release of several closely watched US data reports and as eurozone government officials discuss the merits of new stimulus programmes.
Gold for December delivery on the Comex division of the New York Mercantile Exchange was last up 70 cents at $1,623.50 per ounce. Trade has ranged from $1,621.60 to $1,628.20.
“Regarding economic news, there are no reports of consequence due out here in the US today, but things 'hot up' tomorrow,” said Dennis Gartman, editor of the Gartman Letter.
US producer prices and retail sales will be released tomorrow, he added, followed by consumer prices, the TICS report, the Empire State manufacturing report and industrial production on Wednesday.
“So today we breathe easily; for the rest of the week we shall be 'breathless',” Gartman said.
The US inflation number tomorrow will have to come in below expectations for gold to rally - a sub-par figure would be perceived as another incentive for the Federal Reserve to ease monetary policy further, Standard Bank said.
Meanwhile, in wider markets, the euro was last about half a cent stronger at 1.2343 against the dollar, while Germany's DAX and France's CAC-40 were basically flat, up just 0.08 percent and 0.18 percent respectively. US equity markets are heading for a level or slightly higher open.
As for the more industrial commodities, light sweet crude (WTI) oil futures for September delivery on Nymex were up 59 cents at $93.46 per barrel and the most actively traded Comex copper contract was at $3.3665 per pound, down 2.6 cents.
In the eurozone, the benefits and drawbacks of European Central Bank intervention are currently under debate by politicians and finance ministers.
“Besides Bundesbank president Weidmann, for example, Belgian central bank director Coene and Finnish Prime Minister Katainen have also spoken out against the purchase of Spanish and Italian government bonds by the ECB. Supporters of such interventions, however, clearly have the upper hand,” Commerzbank AG said in a note.
“Although bond purchases by the ECB would calm the market in the short term, they would have an inflationary impact in the longer term and are therefore likely to keep demand for gold at a high level,” it added.
In gold market fundamentals, the physical market remains fairly quiet, with gold being bought on dips towards $1,600, Standard Bank said.
“We expect activity to improve as we head towards September, purely based on seasonality. However, gold in Indian rupee currently trades very close to its all-time high, which may dampen demand,” Standard Bank added. "We therefore expect the physical market to provide support on price dips rather than push gold through resistance levels."
Comex silver for September delivery was last down 10.7 cents at $27.955 per ounce. Trade has ranged from $27.910 to $28.150.
Platinum futures for October delivery on Nymex were up $1.50 at $1,401.40 per ounce and the September palladium contract was at $580.65, down $1.55.
The platinum-gold ratio has fallen to 0.86, a 27-year low, due to a macroeconomic environment that is more favourable for gold than platinum, Barclays Capital said in a note.
“Concerns over Europe and fears of a hard landing in China continue to weigh upon the industrially based precious metals, while inflationary fears and potential for further monetary stimulus bode well for gold,” BarCap said.
“While the spread has scope to narrow in the near term, we believe gold will retain its premium over platinum over the course of second half given gold’s upside momentum has been driven by expectations for further quantitative easing, while lower platinum prices have stimulated buying interest in China and are too low to support supply growth,” it added.
