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April 4th, 2012
Gold futures fell to a 12-week low on signs that the Federal Reserve won’t provide more U.S. economic stimulus, boosting the dollar and eroding the appeal of precious metals as alternative investments. Silver tumbled 6.7 percent.
The Fed will hold off on increasing monetary accommodation unless economic expansion falters, according to minutes of a March 13 policy meeting released yesterday. The dollar rose to a one-week high against a basket of six major currencies, and the euro slumped on Spain’s debt woes.
“The market has decided that yesterday’s statement is probably the final nail in the coffin” for additional Fed stimulus, Frank Lesh, a trader at FuturePath Trading in Chicago, said in a telephone interview. “Gold is reacting to the strength in the dollar.”
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February 13th, 2012
Commodity Investing: Hedge funds increased bets on rising commodity prices to the highest since September on mounting confidence that growth in the U.S. will strengthen demand.
Money managers boosted their combined net-long positions across 18 U.S. futures and options by 13 percent to 929,199 contracts in the week ended Feb. 7, Commodity Futures Trading Commission data show. That’s the highest since Sept. 20. Bullish wagers on copper rose to a six-month high, and soybean holdings jumped by the most this year.
The Standard & Poor’s GSCI Spot Index (SPGSCI) of 24 commodities rose to a six-month high on Feb. 9, a day after the MSCI All- Country World Index (MXWD) entered a bull market, as indicators signaled accelerating growth. Fewer Americans than forecast filed claims for jobless benefits in the week to Feb. 4, and consumer confidence rose to a one-year high. Investments in commodities expanded for a seventh week, the longest streak since February 2009, data compiled by Bloomberg show.
“The improving economic data, not just in the U.S., we’ve seen better data in Europe as well, has put recession fears on the back burner,” said Anthony Valeri, a market strategist with LPL Financial in San Diego, which oversees $330 billion of assets. “That augers well for commodity demand.”
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January 31st, 2012
Silver Futures – Record industrial demand for silver and resurging investor interest is diminishing a supply surplus, driving the metal used in everything from solar panels to batteries into its best start to a year in almost three decades.
Manufacturers will use 15,415 metric tons, 2.5 percent more than in 2011 and reducing the glut by 41 percent to 3,297 tons, Barclays Capital estimates. Investors may buy 2,000 tons through exchange-traded products, after selling 1,300 tons last year, Morgan Stanley predicts. Prices will average $37.50 an ounce in the fourth quarter, 11 percent more than now, the median estimate in a Bloomberg survey of 13 analysts shows.
Silver futures rallied 25 percent since closing at an 11-month low in December, entering a bull market on mounting confidence that another global recession will be avoided even as the World Bank and International Monetary Fund cut their growth forecasts. Prices had plunged 44 percent in eight months, making it the most volatile of any metal tracked by Bloomberg, as expansion slowed from Europe to China, crimping demand for commodities.
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January 23rd, 2012
Silver futures and gold both settled at six-week highs Monday as a weaker dollar boosted demand for alternative investments amid a murky economic outlook.
Gold futures for February delivery, the most active contract, rallied $14.30, or 0.9%, to settle at $1,678.30 a troy ounce on the Comex division of the New York Mercantile Exchange. This was the highest settlement price since settling at $1,716.80 a troy ounce on Dec. 9.
“Gold appears to be on course for a move to $1,690,” said Bob Haberkorn, senior market strategist at R.J. O’Brien. “I don’t see why this market wouldn’t push up to try to get above $1,700, maybe as early as this week.”
Gold futures continue to trade above their 200-day moving average after breaching that important technical indicator last week. The move is considered a positive by traders who follow technical analysis, as crossing above the average is seen as the beginning of a new uptrend.
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October 20th, 2011
Silver, the best-performing and most-volatile precious metal of the past year, may rebound from a bear market as investors bet on growth in developing nations and an extended European debt crisis.
Silver futures may average $38 an ounce this quarter and rise to a record $42 by the final three months of 2012, compared with $30.155 at 5:10 p.m. in London today, according to the median in a Bloomberg survey of 11 analysts. The gains will mean record profit for producers Pan American Silver Corp. (PAA) and Fresnillo Plc (FRES), analyst estimates compiled by Bloomberg show.
China, the biggest emerging-market user, is expanding at more than five times the speed of the U.S., driving consumption of the precious metal most used in industry. Demand is also coming from investors looking for an alternative to cash and gold, which costs about 50 times more than silver. The 30-week correlation coefficient between the two metals is now at 0.82, from as low as 0.47 in 2005, data compiled by Bloomberg show, with a figure of 1 meaning the two move in lockstep.
“Prices now look relatively cheap to where they have been recently,” said David Wilson, an analyst at Societe Generale SA in London and the most accurate silver forecaster tracked by Bloomberg in the two years through June. “The backdrop is still very supportive for gold and we think that silver will leverage off the back of that. Emerging markets are going to be important for demand for sure.”
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July 21st, 2011
Silver futures may more than double to $100 an ounce if the current bull market follows similar patterns seen between 1971 and 1980, according to technical analysis by Citigroup Global Markets Inc.
The attached chart shows spot silver had “two legs up” with an interim corrective move down in the last major bull market from November 1971 through January 1980, Citigroup analysts led by New York-based Tom Fitzpatrick wrote in a report. In the current uptrend that started in November 2001, the metal jumped 5.8 times through March 2008 before slipping 60 percent, they said. The price then rebounded and tested the 1980 high earlier this year, they said.
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