But gains were capped by a slight recovery in the U.S. dollar and by a reduction in the metal’s appeal as a haven.

Spot gold was bid at $954.40 an ounce at 1444 GMT, against $949.65 an ounce late in New York on Monday. U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $2.70 to $956.20.

The data from the Institute of Supply Managers showed the U.S. manufacturing sector returned to growth in August after a prolonged slump, while pending home sales raced to a two-year high in July.

The news boosted U.S. stock markets, while European shares pared earlier losses.

Simon Weeks, head of precious metals at the Bank of Nova Scotia, said the news was mixed for the gold market.

“On the one hand, it is weaker as people unwind safe haven positions and put risk on again, and on the other, it is high due to increased concerns over inflationary pressure,” he said.

“There is so much going on this week in terms of data, the ECB meeting and then the G20 that it will probably be next week before people have a clear understanding of how they want to position themselves,” he added.

Analysts said ahead of the data that a positive view of the economy could help ailing jewellery and industrial sales, which have proved a drag on prices in recent months. The dollar index <.DXY> was a touch firmer after the data.

Oil prices rose more than $1 a barrel, meanwhile, after the data boosted hopes for an economic recovery, while prices of industrial metals such as copper pared losses.

Gold demand in India, the world’s largest bullion market last year, abated as traders awaited further price falls. Some buying was seen after prices slipped below $950 an ounce, but this had not persisted, traders said.

IMPORTS FALL

India’s gold imports fell to 12-14 tonnes in August from 98 tonnes a year before as high prices and weak monsoon rains dented demand, the head of the Bombay Bullion Association said.

Gold imports to Turkey, one of the top three consumers of the metal, also fell 74 percent year-on-year to 12.517 tonnes, as demand in the local market weakened.

Among other precious metals, silver firmed to $14.95 an ounce against $14.89, while platinum was at $1,234 an ounce against $1,237 and palladium was at $289 against $288.50.

Palladium rose to a year high of $291.50 an ounce in earlier trade, helped by hopes demand for the autocatalyst material may recover and strength in other precious metals.

“Palladium… has the potential to test the $300-05 area, however we remain concerned about the level of speculative longs in the market,” said The BullionDesk.com analyst James Moore.

“(These) leave the metal vulnerable to a rapid correction should those longs become spooked.”

Talks between South Africa’s mine workers’ union and Impala Platinum began on Tuesday in an attempt to end a strike over wages. Platinum’s gains have been capped by weak demand from carmakers and the perception above-ground stocks are plentiful.

Sept 1 (Reuters)

But traders were cautious ahead of quarterly results from other U.S. banks, while lackluster data from Germany weighed on the euro and kept it rooted in a broad range against the dollar.

The slight rise in risk appetite also boosted higher-yielding currencies such as the Australian dollar at the expense of both the yen and U.S. dollar, which tend to see their biggest gains when investors grow anxious and buy them as safe havens.

“Retail sales were better than expected, so that’s a bit of good news, but there’s been little follow-through as the market is uncertain which way it wants to trade,” said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington.

The retail sales data came with some caveats, though, as traders noted much of the 0.6 percent gain in June retail sales was driven by higher gas prices.

Salvaggio also said data showing a sharp rise in U.S. producer prices last month, which pushed government bond yields up, may stoke inflation fears.

Midmorning in New York, the euro fell 0.1 percent to $1.3967 and rose 0.1 percent to 130.02 yen . The dollar edged up 0.1 percent to 93.10 yen . The yen had briefly erased losses against the dollar, pushing the greenback down to 92.72 yen as stocks dipped into negative territory, but fell anew as Wall Street recovered.

The euro’s woes were tied partly to a monthly poll of economic sentiment from German think-tank ZEW, which defied upbeat market expectations and fell in July for the first time in nine months.

Currencies considered higher risk, however, did better. Australia’s dollar rose 0.8 percent to $0.7889 , and sterling added 0.4 percent to $1.6297 . Strong Australian business confidence data and better-than-expected UK retail sales and home price data added to demand for both.

Source: NEW YORK, July 14 (Reuters)

• Inflation fears were quelled at least temporarily as U.S. consumer prices were raised only slightly last month, and actually experienced their biggest drop in almost 60 years. Higher gas prices contributed to the 0.1% increase in the Labor Department’s Consumer Price Index (CPI) versus the April’s CPI, which was flat. Financial markets had expected a 0.3% increase. The CPI fell 1.3% versus the same period last year, the largest drop since April 1950. “There is no sign that there has been widespread inflation because of the Fed’s quantitative easing regime. In fact, long-term inflation expectations haven’t budged and the Fed is still ahead of curve on inflation,” economic and investment strategist John Canally of LPL Financial told Reuters.

• Four of the nation’s largest banks repaid $54.7 billion to the U.S. Treasury’s Troubled Asset Relief Program (TARP), freeing themselves of government restrictions on lending and pay.JPMorgan & Chase Co. (NYSE: JPM) repaid $25 billion, andMorgan Stanley (NYSE: MS) and Goldman Sachs Group Inc.(NYSE: GS) repaid $10 billion each, Bloomberg News reported. As Money Morning’s Martin Hutchinson reported yesterday (Wednesday), the other two banks, U.S. Bancorp (NYSE: USB) and BB&T Corporation (NYSE: BBT) repaid their debts of $6.6 billion and $3.1 billion respectively. The banks are among 10 other that agreed last week to repay $68 billion in TARP funds,Bloomberg News reported. “Our strong capital position allowed us to pay back TARP in a very short amount of time,” BB&T Chief Executive Officer Kelly King said in the bank’s statement.

• Beleaguered outdoor clothing retailer Eddie Bauer Holdings Inc.(Nasdaq: EBHI) yesterday (Wednesday) filed for Chapter 11 bankruptcy protection and said it planned to sell itself to private equity firm CCMP Capital LLC for $202 million. The sale to CCMP, known as a 363 sale, means the sale needs the approval of a judge, and other bidders could emerge. CCMP is entitled to a $5 million breakup fee if it loses to a higher bidder. Court filings show that Bank of America Corp. (NYSE: BAC), General Electric Company (NYSE: GE) and CIT Group Inc. (NYSE: CIT) will provide up to $100 million in financing during the bankruptcy case,The New York Times reported. Eddie Bauer said its 371 stores in the United States and Canada are operating as usual.

• Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B) options will begin trading on the Chicago Board Options Exchange (CBOE), enabling investors to bet on the company using a technique Chairman and Chief Executive Officer Warren Buffet has rejected, Bloomberg News reported. “Usually, if you want to buy or sell a stock, you should buy or sell the stock,” Buffett said last year on the weekend of the company’s annual meeting. “Using options, four times out of five you will be right, the last one you’ll miss. I’ve virtually never used options as a way to enter or exit a position.” CBOE will offer contracts on Buffet’s conglomerate starting today (Thursday).

• FedEx Corp.’s (NYSE: FDX) losses more than tripled in its last quarter, and the company said things won’t be much better in the near future, The Associated Press reported. The nation’s second-largest package shipper reported a loss of $876 million, or $2.82 per share in the quarter ended May 30. That compares to a loss of $241 million, or 78 cents per share in the same period last year. “The operating environment for our first two quarters in fiscal 2010 is expected to be extremely difficult,” Executive Vice President and Chief Financial Officer Alan B. Graf Jr. said. The company has not yet decided whether it will have to lay off more workers or make further cutbacks due to poor economic conditions, Graf said in a conference call with investors.

• Newly sold automaker Saab secured a key court ruling yesterday (Wednesday) to cut 75% of the more than $1.28 billion (10 billion in Swedish crowns) of debt after a vast majority of creditors approved the proposal, Reuters reported.  Sweden-based Saab was sold on Tuesday to fellow countrymen Koenigsegg Group ABby soon-to-be former parent General Motors Corp. (OTC:GMGMQ).

• The annual rise in gas prices entered its 50th straight dayyesterday (Wednesday) after crude prices bounced back after an initial slump in the beginning of this week, The Associated Pressreported. Pump prices are now at a national average of $2.67 per gallon. The rising crude prices and less production has added to the typical increase in demand in the late spring and summer months as more Americans take to the roads for vacation-related travel.

• After being dogged by reports of orderless days at the Paris Air Show, The Boeing Co. (NYSE: BA) finally got a $153 million order for two single-aisle planes, The Associated Press reported. But this order pales when compared to the $6.2 billion in orders already attained by rival Airbus S.A.S. Both aircraft makers are feeling the economic crunch by the worldwide recession.

• China will use part of its $200 billion sovereign wealth fund to invest in hedge funds, according to Felix Chee, who will initially run the fund. “We will have a preference for managed accounts,” he said in an interview with Bloomberg News Wednesday at the GAIM International hedge fund conference at Monaco’s Grimaldi Forum. “The platform would like a core of single-manager funds and fund-of-funds.” Chee, is a special adviser to the chief investment officer of China Investment Corp.’s hedge fund and proprietary trading effort, “It’ll be across the spectrum of strategies,” he said. “We’re looking for the best managers and a handful of fund of funds, and when I say handful I mean five or less.”

• A prominent Wall Street analyst sees the benchmark S&P 500 Index (NYSE: .INX) breaking its all-time record by the end 2012. JPMorgan Chase & Co. (NYSE: JPM) Chief U.S. Equity Strategist Thomas Lee said on Wednesday the index should surge back above 1,500, its October 2007 high in less than three years, provided the U.S. economy sees a V-shaped recovery.  “The global economy is in the midst of a synchronized recovery,” Lee said at the Reuters Investment Outlook Summit.  Lee also reiterated his year-end 2009 target of 1,100 for the S&P 500, saying the United States will likely come out of its recession some time this summer, followed by the rest of the developed world.

• Prices on Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE:FRE) mortgage securities rose for the fifth day Wednesday, pushing yields down as they tracked a drop in rates on benchmark U.S. Treasuries, foreshadowing possible further declines in borrowing costs for new home-loans. Yields on Washington-based Fannie Mae’s 30- year fixed-rate mortgage bonds fell by 0.02% to 4.56% in New York trading, the lowest since June 3, according to data compiled by Bloomberg. Treasuries and so-called agency mortgage bonds rallied after a government report showed the cost of living rose less than forecast in May. The mortgage-bond yields are down from 5.07% on June 10, the highest level since the Federal Reserve announced plans to buy home-loan bonds in November.

• Applications for mortgages fell for a fourth consecutive week, with overall demand plunging to its lowest level in nearly seven months, according to a report Wednesday from the Mortgage Bankers Association.  Rising interest rates have tempered demand for refinancings and new purchase applications, as the industry group’s seasonally-adjusted index fell 15.8% to 514.4 for the week ended June 12, the lowest since the week ended November 21, 2008.  Rates on 30-year fixed-rate mortgages averaged 5.50%, down 0.07% from the previous week, but significantly higher than the all-time low of 4.61% set in the week ended March 27,Reuters reported.

Source: Investment News Briefs Thursday June 18, 2009

Gold surged on Monday, helped by higher oil prices, a lower dollar and investor concern about inflationary pressures given the large amounts of money being pumped into the global economy.

Autocatalyst material platinum jumped more than 6 percent to $840 an ounce, while palladium gained more than 11 percent to $178 on growing optimism about a rescue for the auto industry in the United States.

Spot gold rose nearly 3 percent to $776.70 an ounce and was up at $773.90/775.90 at 1030 GMT from $754.60 in New York late on Friday, when it fell to $740.40, the lowest since November 20 in a commodities-wide sell-off.

To some, talk of inflation is premature given the world is currently grappling with the prospect of deflation, but forward looking investors are adding to their holdings of the precious metal to preserve the value of their portfolios.

“We will see some deflation, but that will be short lived and the inflationary impact of substantial fiscal stimulus … will inevitably lead to inflation,” said John Meyer, analyst at investment bank Fairfax.

“Gold will be an important commodity in the protection of value,” he said. Fairfax expects gold to average $900 an ounce next year compared with a previous forecast at $550. Central banks have pumped cash into the world’s financial system and slashed interest rates in an attempt to ease the credit crunch and boost confidence.

Chinese and European leaders are due to plot their next steps on Monday to move the world economy back from a precipice, while stimulus measures presented, planned or pending injected optimism into stock markets.

IMMINENT BAILOUT

Adding to investor worries about inflation was oil , which leapt 6 percent to above $43 a barrel.

Gold often rises in line with oil, which can trigger inflation, while a weaker U.S. currency makes metals priced in dollars cheaper for holders of other currencies.

“The dollar and oil are doing their bit for gold, but we are seeing a lot of investor interest in gold,” a trader said.

The U.S. Senate will reconvene later on Monday as negotiators seek to draft legislation to provide the three largest automakers with $15 billion in short-term loans.

Expectations that the plan could be agreed were bolstered after U.S. President-elect Barack Obama said the auto industry could not be allowed to collapse.

The news boosted platinum and palladium, used to make auto catalysts that cut carbon emissions.

Palladium was at $178/185 an ounce from $159.50 on Friday and platinum at $839/859 from $788.

“Having sustained substantial price corrections between July-October, platinum is currently benefiting from a good degree of bargain hunting buying, mainly from those with longer-term outlooks,” TheBullionDesk.com said in a note.

“However, with more negative auto data expected and commodities generally under pressure the short-term view is still a little negative.”

Spot silver rose nearly 5 percent to $9.91 and was at $9.84/9.82 from $9.45 on Friday.

Pratima Desai , Peter Blackburn
LONDON, Dec 8

A spate of interest rate decisions, including that of the European Central Bank on Thursday, are set to influence the currency markets, and key U.S. non-farm payrolls numbers will be released on Friday.

Spot gold slipped to $773.05/775.05 an ounce at 1000 GMT from $781.50 an ounce in New York late on Tuesday.

“This is a big week for news, and a lot of people will be on the sidelines ahead of that,” Afshin Nabavi, head of trading at MKS Finance, said. “This is going to be a very illiquid market.”

Gold is often bought as an alternative investment to the dollar and typically moves in the opposite direction to the U.S. currency. The dollar strengthened against the euro on Wednesday as traders bet on a euro zone rate cut.

The currency markets remain jittery ahead of rate announcements from the ECB, the Bank of England and the Reserve Bank of New Zealand on Thursday.

Gold shrugged off a move higher in oil prices, with inflation fears tempered by crude’s sharp dip at the beginning of this week.

U.S. crude futures are currently up on the day, but are trading some 13 percent below the level they hit early on Monday. Traders are awaiting U.S. stockpiles data due later in the session.

Physical offtake of gold is also slowing, traders said. In India, the world’s largest bullion market, domestic gold buying declined as well-stocked traders awaited further price falls.

“We have many buy orders at $750 (an ounce) levels,” a dealer at a Mumbai bank said.

Among other precious metals, spot silver tracked gold lower to $9.38/9.46 an ounce from $9.54.

CAR SALES TUMBLE

Platinum prices rose, recovering some of this week’s up to 10 percent losses. The metal slipped sharply on fears over falling sales by automakers, the main consumers of platinum used to make autocatalysts.

Data released on Tuesday showed U.S. car sales tumbled nearly 37 percent in November, the 13th consecutive month of falls, to their lowest level since 1982.

Sales at GM and Chrysler fell 41 percent and 47 percent respectively in November. Carmakers said there was no sign demand would rebound in the next six months.

However, with platinum having already fallen two-thirds from the highs it hit in March and much of the bad news already priced in, the market showed little reaction to the news.

“The platinum group metals market has come to expect the worse, and much of this bearish news has been priced in already,” Standard Bank analyst Walter de Wet said.

A top lawmaker predicted Washington will approve a bailout plan for U.S. automakers after they submitted survival plans to Congress, and both GM and Chrysler said they needed an immediate cash injection to avoid failure.

Spot platinum rose to $803.50/823.50 an ounce from $796 late on Friday, while its sister metal palladium was little changed at $171/176 an ounce against $169.

A Reuters survey showed platinum, palladium and silver are expected to record sharp price falls in 2009 as demand sags in line with economic growth.

By Jan Harvey
LONDON, Dec 3 (Reuters)

Nickel flirted with the $12 mark around mid-morning, but then collapsed, closing at its intraday low of $11.7972/lb., down almost 11 cents. Zinc’s fuse was lit early in the pre-dawn hours and it rallied all day long, just coming off its intraday high to end at $1.0523/lb., up 4 cents. Aluminum also came well off its mid-morning highs but managed a gain of 2 cents, to $1.3504/lb., while lead was up sharply, easing just a bit late to $1.0496/lb., up more than 3¾ cents.

Copper rose to a one-week high, primarily on the declining dollar and inflation fears.

In addition, labor issues “still fester in the background, lending support” to the copper price, wrote Edward Meir, of MF Global.

Indeed, early in the day, leaders of a group representing employees of contractors for Codelco, the world’s biggest producer, said they might resume protests because workers had not received bonuses under the agreement that ended the recent strike.

In response, Codelco said that 23,000 contract workers have received bonuses, and Chile’s government said it is complying with the May 5 agreement.

But the market is delicately balanced. “What we have got on the downside are concerns about falling Chinese demand. Until we see that pick up, it is unlikely we are going to see a significant push higher,” said Barclays Capital analyst Gayle Berry, over against “what prevents (copper) from falling too far is still these supply-side concerns.”

Meanwhile, zinc headed for it best weekly gain since February, as traders remained uneasy about the extent of earthquake damage to processing facilities in China.

“If it’s sustained damage, it’s going to be a disruption that makes markets nervous,” said Giles Lloyd, a zinc analyst at London-based researcher CRU in London.

And as an additional side effect, “now there is likely to be even more demand for metal[s] as fabricators gear up for the reconstruction that will be needed following [the quake],” said BaseMetals.com’s William Adams.

In company news comes word from Australia that the major public servant-funded superannuation funds in that country have ruled out any plan to team with Chinese interests in a raid on BHP Billiton shares, undermining the latest in a string of rumors that has driven BHP’s shares to record levels.

Source: Base Metals Mostly Sharply Higher