Gold Climbs for a Second Day

Tomahawk, WI 9/28/2011 (PennyPayDay) – Gold may gain for a second day in London as concern about Europe’s debt crisis spurs demand for a protection of wealth and as physical purchases increase.

European equities declined after a report that some countries are demanding private creditors take bigger writedowns on Greek bonds. Bullion dropped 8.8 percent in the three days to Sept. 26, the most since October 2008, as some investors sold to cover losses in other markets. Physical purchases remain “very visible” across much of Asia, UBS AG said today.

Long-term investors and “physical buying will do a lot to help gold rebuild its reputation after the recent ugly selloff,” Edel Tully, a London-based analyst at UBS, wrote in a report. “The panic displayed over the past few days has dissipated to a great extent, though there certainly hasn’t been a stampede back into gold. Instead, the market remains hesitant and gold continues to consolidate. We believe this is healthier than a steep push higher.”

Immediate-delivery gold rose $10.30, or 0.6 percent, to $1,660.43 an ounce by 10:10 a.m. in London. Prices dropped to $1,532.72 on Sept. 26, the lowest since July 8. Gold for December delivery was 0.5 percent higher at $1,660.60 on the Comex in New York.

Gold is in the 11th year of a bull market, the longest winning streak since at least 1920 in London. Prices reached a record $1,921.15 on Sept. 6 as investors sought to diversify away from equities and some currencies.

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Gold Futures Advance After Big Decline

Oxford, MS 9/27/2011 (PennyPayDay) – Gold gained for the first time in five days in New York as the biggest three-day drop in 28 years spurred some investors to buy the metal on concern about economic growth and debt crises.

Bullion slumped 12 percent in the previous three days as some investors sold to cover losses in other markets, which plunged on concern there may be another global recession. The metal has slid 13 percent from its Sept. 6 record and last week’s plunge prompted CME Group Inc. (CME) to raise margin requirements on futures contracts. Physical demand for gold is “exceptionally strong,” UBS AG said today in a report.

“Although not many are yet prepared to dip their toes back in the market, there is a small but growing group who believe this pullback will prove to be a good buying opportunity,” Edel Tully, a London-based analyst at UBS, wrote in a report. “Gold needs to stabilize for now, after suffering a good deal of reputational damage with recent wild moves.”

Gold for December delivery gained $73.20, or 4.6 percent, to $1,668 an ounce by 8:16 a.m. on the Comex in New York. It dropped to $1,535 yesterday, the lowest level since July 8, and capped the biggest three-day decline since March 1983. Immediate-delivery gold was 2.5 percent higher at $1,666.40 in London.

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Commodities Fall to Nine-Month Low

Oxford, MS 9/23/2011 (PennyPayDay) – Commodities fell to a nine-month low as silver, copper and nickel tumbled on deepening concern that policy makers are running out of tools to avert another global recession, hurting demand for metals, fuel and food. Gold fell below $1,700 an ounce in New York.

The Standard & Poor’s GSCI Index of 24 commodities fell as much as 5.2 percent, the most since Dec. 2, and was down 1 percent at 2:16 p.m. in London. The index is down 7.9 percent this week, the most since May 6. Silver slumped 10 percent, copper was down 3.1 percent and nickel dropped 3.6 percent.

Central bankers and finance ministers will discuss the economic outlook today at the annual meetings of the International Monetary Fund and World Bank in Washington. The Federal Reserve on Sept. 21 said it will replace $400 billion of short-term debt with longer-term Treasuries, saying it sees “significant downside risks” to growth.

“We are seeing commodity prices correcting so they are more compatible with the global economy,” said Christin Tuxen, a senior analyst with Danske Bank A/S in Copenhagen. “When we have fears over the economic cycle as we have now and a higher probability of contraction, it hits industrial metals and commodities.“

Slowing Growth

The world economy will expand 4 percent this year and next, the International Monetary Fund said on Sept. 20, cutting forecasts made in June for a 4.3 percent expansion and 4.5 percent in 2012.

“We are not predicting a recession in the Western world, but low growth for the long term,” Danske Bank’s Tuxen said. “We are looking for a rebound in China and Asia in the fourth quarter and in 2012, which will help copper and aluminum.”

Three-month copper on the London Metal Exchange fell as much as 7.3 percent to $7,115.75 a metric ton. Prices declined for a sixth day and have slumped 26 percent from the record $10,190 on Feb. 15. The metal is down 15 percent this week, on course for the biggest retreat since December 2008. Tin plunged as much as 14 percent to $17,000 a ton.

“We’re in a downward spiral, and no one knows when it’s going to end,” said Robin Bhar, an analyst at Credit Agricole SA in London. “There is a lot of uncertainty at this time as to how demand will develop.”

Manufacturing in China, the world’s largest metals user, may shrink for a third month in September, according to a preliminary index of purchasing managers from HSBC Holdings Plc and Markit Economics released yesterday. The initial reading for this month was 49.4, compared with a final 49.9 for August and 49.3 for July. Figures below 50 signal a contraction.

The GSCI index has fallen 10 percent so far in the third quarter, heading for the biggest quarterly drop since the fourth quarter of 2008.

Oil, Gold

Immediate-delivery gold dropped as much as 3.3 percent to $1,681.97 an ounce, and last traded at $1,687.98. Silver futures have dropped 19 percent in two days.

“Gold has to roll with the masses, as markets show their disappointment in the Fed’s ‘Operation Twist’,” Edel Tully, a London-based analyst at UBS AG, wrote today in a report, referring to the Federal Reserve’s plan to shift $400 billion of its Treasury securities holdings into longer-term debt.

“The confidence-seeping sentiment that now permeates at a deeper level will at some point translate into a higher gold price,” she wrote.

November-delivery oil lost as much as 3.7 percent to $77.55 a barrel on the New York Mercantile Exchange. The price is still down 10 percent this week, set for the biggest loss since May 6.

Soybeans for November delivery dropped as much as 2.6 percent to $12.50 a bushel on the Chicago Board of Trade.

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Gold Biggest Monthly Gain Since 2009

Oxford, MS 8/31/2011 (PennyPayDay) – Gold rose in New York, capping the biggest monthly gain since November 2009, on speculation that the Federal Reserve will take more action to spur growth.

Minutes released yesterday from the Fed’s meeting earlier this month showed some policy makers favored more aggressive action to stimulate growth. The Dow Jones Industrial Average rose as much as 1.3 percent to the highest in almost four weeks, erasing its 2011 loss. Gold is up 12 percent this month after touching an all-time high of $1,917.90 an ounce on Aug. 23.

“Equities are reasserting themselves, but in the backdrop, traders know the Fed is going to do something to stimulate the economy, so sell-offs in gold are being bought,” Adam Klopfenstein, a strategist at MF Global in Chicago, said in a telephone interview.

Gold futures for December delivery rose $1.90, or 0.1 percent, to settle at $1,831.70 at 1:56 p.m. on the Comex. The most-active contract has risen 29 percent this year.

Earlier, the price dropped as much as 0.9 percent as equities rallied. Gold surged in August on mounting speculation that the U.S. economic recovery will falter and as the Federal Reserve pledged to keep borrowing costs at a record low until mid-2013. This month, the metal also reached records in euros and British pounds amid Europe’s sovereign-debt crisis.

“With stocks rallying, there’s just an excuse for investors to take profits on gold,” Frank McGhee, the head dealer at Integrated Brokerage Services in Chicago, said in a telephone interview.

Silver futures for December delivery rose 30.4 cents, or 0.7 percent, to $41.768 an ounce on the Comex, capping a 4.1 percent gain in August.

On the New York Mercantile Exchange, platinum futures for October delivery climbed $3.10, or 0.2 percent, to $1,856.20 an ounce. Palladium futures for December delivery gained $11.15, or 1.4 percent, to $790.45 an ounce.

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