FS: US GOLD OPEN – Comex gold looks to US data, dollar for direction
Orlando, Florida 25/06/2013 – Gold futures posted modest gains in the US on Tuesday morning but the market is likely to wait for the release of other important data points, such as consumer confidence, new home sales and the Richmond manufacturing index, before a more dramatic move either way.
Gold for August delivery on the Comex division of the New York Mercantile Exchange was last up $5.30 at $1,282.40 per ounce. Trade has ranged from $1,272.60 to $1,289.00.
“We could see a response in precious metals via the dollar from any reaction to US data releases today, which includes durable goods, consumer confidence and new home sales. As ever stronger readings will most likely weigh on precious metals as this increases the likelihood of the Fed paring back quantitative easing,” Standard Bank said.
“We feel that there would be an asymmetry in any reaction, with weaker readings not providing much support to precious metals, and with weak readings having to be that much weaker to generate significant moves higher in precious metals prices,” the bank analysts added.
In fact, precious metal prices wobbled lower after US durable goods orders rose more than expected in May to 3.6 percent, beating the forecast three-percent increase.
In wider markets, the dollar was about a third of a cent stronger against the euro at 1.3096, while Germany’s DAX and France’s CAC-40 were up 1.4 percent and 1.3 percent respectively.
In gold-specific news, HSBC cut its gold and silver price forecasts for this and the next two years, citing the impact of prospective tightening of monetary policy by the US Federal Reserve and slower growth rates in emerging markets.
The bank slashed its 2013 annual average price forecast to $1,396 per ounce, a drop of 9.5 percent on its projection of $1,542 made in April. It also cut its outlook for 2014 and 2015 by 10 and 11 percent respectively to $1,435 and $1,395. For the remainder of the year, HSBC forecasts a $1,125-1,375 trading range.
It now expects silver to average $21.00 per ounce this year, down a sizeable 19 percent from its previous $26 forecast. It also downgraded its 2014 and 2015 predictions by 26 percent and 23 percent respectively to $20.00 and $20.25. HSBC expects a $16-22 trading range for silver for the rest of the year.
“The discussion by the Fed of a tapering, or reduction, of its quantitative easing (QE) asset purchases was more aggressive than we initially envisaged, and has resulted in higher US Treasury yields, which are traditionally negative for gold,” HSBC analyst James Steel said.
Additionally, turmoil in emerging markets and the prospects of a slower growth in China have weighed on bullion. The bank cut its 2013 China GDP forecast to 7.4 percent from 8.2 percent and its 2014 GDP forecast to 7.4 percent from 8.4 percent.
“A slowdown in China’s GDP growth may reduce consumer appetite for physical gold in that country,” Steel explained.
As for the other precious metals, Comex silver for July delivery was up 13.7 cents at $19.630 per ounce. Trade has ranged from $19.40 to $19.790.
Platinum futures for July delivery on the Nymex were up $24.60 at $1,353.70 per ounce, while the September palladium contract at $672.80 was up $15.15.
“Platinum has come through a choppy and volatile overnight session with moderate gains this morning, as well as posting a sizeable recovery from a new multi-year low earlier this morning,” the CME Group said in a market commentary.
“While global markets are still seen as being some distance away from fully shifting back into a risk-on attitude, lower concerns with Chinese liquidity issues are providing a mild boost to platinum early in today’s session,” it added.
