U.S. data showed the number of U.S. workers filing new claims for jobless benefits rose slightly more than expected last week, but a gauge of underlying labor trends fell for a fifth straight week.

Spot gold was bid at $933.50 an ounce at 1311 GMT, against $929.00 an ounce late in New York on Wednesday. U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange rose $6.20 to $933.40 an ounce.

“If this is welcomed by the equities market and triggers a fresh boost, that could benefit gold,” said CMC Markets strategist Ashraf Laidi.

The dollar was down 0.39 percent at 79.3 against a basket of currencies and was lower against the euro following the data. Traders are now eyeing U.S. data on second-quarter GDP due on Friday for clues as to the next direction of the economy.

European shares rose as investors digested a raft of broadly positive corporate earnings, while U.S. stock futures extended gains after the jobs report.

Oil was also boosted by stock markets and rose above $64 a barrel. Firmer crude prices can support gold, which can be used as a hedge against oil-led inflation.

Gold demand in India, the world’s biggest bullion consumer, is recovering after recent price falls, but a further decline will be needed for buying to significantly recover.

“There are advance orders in decent quantities in the range of $900-920 an ounce,” said one dealer with a state-run bank.

Overall demand in India remains weak, however. The country’s gold imports have reached a provisional 8-10 tonnes in July so far, well below the 24 tonnes recorded last June, the Bombay Bullion Association said.

INVESTMENT SOFT

Investment demand for gold remained soft, however, as ETF holdings slipped further. Holdings of the largest bullion ETF, the SPDR Gold Trust, fell over 10 tonnes on Wednesday, and are down nearly 48 tonnes in the last four weeks.

Jason Toussaint, managing director for exchange-traded gold with the World Gold Council, said there was evidence investors were selling out of the SPDR fund to buy shares.

Analysts fear a broader liquidation of ETF gold holdings resulting from a recovery in risk appetite could jeopardise gold’s gains.

“Without strong physical demand to absorb metal coming back into the market and with funds cutting long exposure, the metal is at risk of a deeper correction,” said TheBullionDesk.com analyst James Moore.

On the supply side, the world’s largest gold producer, Barrick Gold , said it produced 1.87 million ounces of gold in the second quarter and is on track to meet its 2009 output target of 7.2-7.6 million ounces.

Among other precious metals, silver tracked gold up to $13.44 an ounce against $13.28. Spot platinum was at $1,177 an ounce against $1,170, while spot palladium was at $255 against $252.50

LONDON, July 30 (Reuters)

Gold slid more than 3 percent in Europe on Monday as the strengthening dollar knocked the metal’s appeal as a currency hedge, and oil prices retreated from highs.

Other precious metals tumbled in gold’s wake, with silver falling 8 percent, platinum 3 percent and palladium 6 percent.

Spot gold was quoted at $851.65/853.65 an ounce at 1445 GMT, down from $873.20 an ounce late in New York on Friday, having touched a session low of $843.50.

U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange were down $26.60 at $852.90 an ounce, having earlier touched a low of $843.50.

“The dollar is the critical factor today,” said BNP Paribas analyst Michael Widmer.

The U.S. currency extended gains against the euro to a fresh three-week high on Monday on hopes U.S. President-elect Barack Obama will unveil fresh measures to boost the economy.

Obama is due to meet House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid later in the session to discuss their legislative agendas.

Obama officials have been discussing an economic stimulus bill in the range of $675 billion to $775 billion.

The euro has also been battered by poor Italian and Spanish inflation data and tax cuts in Germany, which are expected to add pressure on the European Central Bank to cut interest rates soon.

“Gold’s move in the last couple of days is almost entirely due to the strength of the dollar,” said UBS commodity strategist John Reade. “The number one, front centre driver of the dollar gold price is where euro-dollar is going.”

The euro-dollar exchange rate “moved sharply higher in December and has come off in the first couple of trading days of this year,” he added. “It has dragged gold with it.”

The precious metal had found good support in early trade as oil prices rose nearly 3 percent after an Iranian military commander called for an oil boycott over Israel’s offensive in the Gaza Strip.

However, it has slipped as oil gave up those gains.

Gold usually moves in line with oil prices, both because firmer crude boosts interest in the precious metal as a hedge against oil-led inflation and increases the appeal of commodities as an asset class.

JEWELERY BUYING SOFT

Demand for gold jewelery has been hit by the higher prices. Sales in Abu Dhabi fell 40 percent in December from a month before, the emirate’s industry group said.

Gold buying in India, the world’s largest market for the precious metal, has been crimped by higher prices, traders said.

“People would want to buy if prices fall below 12,500 rupees,” said Mayank Khemka, managing director of Delhi-based Khemka International. Prices are currently around 13,500 rupees.

Among other precious metals, silver slipped in line with gold to a low of $10.54, before recovering to $10.86/10.94 an ounce from $11.52 late on Friday.

Platinum and palladium also fell, with both metals suffering from expectations demand from car makers will continue to fall.

France and Japan posted steep falls in December car sales on Monday, while U.S. auto sales numbers are due later in the session.

Automakers are responsible for around 50 percent of global platinum and palladium demand.

Platinum eased to $925.50/935.50 an ounce from $944, while palladium dipped to $182/187 an ounce from $190.

LONDON, Jan 5 (Reuters)

• Detroit-based finance company GMAC has filed to become a bank, a shot at getting a slice of the $700 billion Troubled Asset Relief Program bailout. Private equity firm Cerberus Capital Management LP owns 51% of GMAC. General Motors Corp. (GM) owns the other 49%, Reuters reported.

• Initial jobless claims climbed to 542,000 in the week ended Nov. 15, close to a 26-year high. “The economic contraction appears to be worsening,” Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, told Bloomberg. “The stock markets are plunging, people are retrenching and manufacturing activity is virtually falling off a cliff. The increase in layoffs can only worsen the economic downturn.”

• Ricardo Salinas Pliego, a Mexican media and retail mogul, indicated that he may seek a controlling stake in Circuit City Stores Inc. (CCTYQ), Reuters reported. Pliego already has a 28.1% stake in the company, which filed for Chapter 11 bankruptcy protect last week.

• After seven months of negotiations, Banco do Brasil SA, Brazil’s largest government-owned bank, is buying majority control of Banco Nossa Caixa SA for $2.25 billion, “Nossa Caixa has got plenty of liquidity, a decent branch network and judicial deposits of Sao Paulo state which is useful. It’s a good fit and it’s a good asset,” Pedro Fonseca, an analyst at London’s Keefe, Bruyette & Woods Ltd., told Bloomberg.

• Light, sweet crude for December delivery fell nearly 8%, or $4.07, to $49.50 a barrel in afternoon trading on the New York Mercantile Exchange, before settling at $49.65 a barrel.

• JPMorgan Chase & Co. (JPM) the largest U.S. bank, plans to fire about 10% of its investment banking staff, or about 3,000 employees, as the global economy slides into recession, Bloomberg News reported. JPMorgan also plans to freeze base salaries next year for most employees who earn more than $60,000 to $70,000, annually.

• The Dow Jones Industrial Average yesterday (Thursday) shed 445 points, or 5.6%, to close at 7,552.29 – its lowest level since March 12, 2003. Meanwhile, the Standard & Poor’s 500 index lost 54 points, or 6.7%, to close the day at 752.44 – its lowest level since 1997.

Source: Global Investing Roundups Friday, November 21st, 2008

• General Growth Properties Inc. (GGP) warned it is on the brink of bankruptcy, as slow retail sales have forced many of its mall vendors to close their doors, CNNMoney.com reported. The nation’s second-largest shopping mall operator said in a SEC filing that it has more than $950 million in property and corporate debt, and is facing another $3.07 billion in debt that matures in 2009.

• Sales fell 7% in the third quarter for Macy’s Inc. (M), leading to a $44 million loss, or 10 cents a share. As a result, the Cincinnati-based retailer said it is cutting capital spending by as much as 45% in 2009, MarketWatch reported.

• Oil continued falling faster than it rose, as December futures for light sweet crude slid $3.08 overnight to $59.01 a barrel in electronic trading on the New York Mercantile Exchange. The sharp fall is blamed on concerns that global growth next year will clock in slower than expected, the Associated Press reported.

• October retail sales in China rose a robust 22%, sending a strong signal that its powerhouse economy could stand tall amidst global recession. The sales growth is nearly its fastest pace in nine years, Bloomberg reported.

• Yum Brands Inc. (YUM) said yesterday (Wednesday) that it would cut “several hundred” jobs as it restructures its U.S. business. The company plans to reduce the percentage of Pizza Hut and KFC restaurants it owns to from 20% to 10% by selling units to franchisees. The company will continue to own 20% of all Taco Bell restaurants.

• Anheuser-Busch Cos Inc. (BUD) shareholders yesterday (Wednesday) approved the $52 billion takeover offer from Belgian rival InBev NV. More than two-thirds of the Budweiser brewer’s shareholders voted, with 96% voting in favor of the deal. Anheuser-Busch and InBev will form the world’s largest brewer if and when federal regulators clear the deal.

Source: Global Investing Roundups Thursday, November 13th, 2008

• Reeling from the housing and credit crisis, luxury-home builder Toll Brothers Inc. (TOL), reported a 41% dive in its fiscal fourth-quarter revenue, Bloomberg reported. “Unfortunately, the preliminary signs of stability we had discussed in early September were upended by the past month’s financial crisis,” Chief Executive Officer Robert Toll said in a statement.

• Despite first-half profit falling 35% and a reduced sales forecast, Vodaphone Group Plc (VOD) investors cheered the company’s plan to focus on cash generation and tightened capital, MarketWatch reported. The world’s largest mobile phone provider also raised its interim dividend by 3.2%.

• Tyco International Ltd. (TYC) more than doubled net income in its fiscal fourth quarter, The Wall Street Journal reported. But the electronics and security system provider projected that fiscal 2009 results would fall below analysts’ estimates.

• Cash-flush StatoilHydro ASA (STO) said it will buy an inital 32.5% stake in the Chesapeake Energy Corp.’s (CHK) 1.8 million-acre Marcellus shale gas reserve. StatoilHydro doled out nearly $3.4 billion for the unconventional energy source, filling a huge hole at Chesapeake, which has a heavy debt burden, Reuters reported.

• The price of oil hit a 20-month low yesterday falling $3.08 to settle at $59.33 a barrel on the New York Mercantile Exchange – the lowest closing price since March 2007.

• Sirius XM Radio Inc. (SIRI) said yesterday (Tuesday) that its third-quarter losses totaled $4.88 billion, or $1.93 a share. Revenue more than doubled to $488.4 million, from $241.8 million, however. On an adjusted basis, revenue soared 16% from $529.2 million last year, to $612.8 million.

Source:Global Investing Roundups Wednesday, November 12th, 2008

• Crude oil for December delivery declined 1.4% yesterday (Monday) with a 93-cent drop to close at $63.22 a barrel on the New York Mercantile Exchange. Oil futures are down 57% from the July 11 record of $147.27 and 31% down from a year ago, Bloomberg News reported.  “With all of the stock markets going down, there’s going to continue to be downward pressure,” said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. (MF) in New York. “There’s not a lot that can be done to stop this downward spiral right now.”

• Shares of German automaker Volkswagen AG (ADR OTC: VLKAY) skyrocketed over 120% yesterday (Monday) with a gain of $64.75 to close at $118.00. Porche SE (PINK: POAHF) announced late Sunday that it would increase its stake in Volkswagen to 75% in 2009, The Wall Street Journal reported. The sudden price spike was due in part to Volkswagen’s relatively small free float, as Porche is just shy of a 75% ownership stake and the German state of Lower Saxony controls 20%.

• The Japanese yen hit a 13-year high versus the dollar yesterday (Monday), trading at just under 94 yen to the dollar. Fear of the effect the strong yen would have on exports sent the Nikkei 225 to a 26-year low of 7,162.90 after losing 6.4% for the day. The key Japanese benchmark is down 53% year-to-date, BusinessWeek reported.

• Verizon Communications Inc. (VZ) announced yesterday (Monday) third-quarter earnings were $1.67 billion, or 59 cents per share, up from $1.27 billion, or 44 cents a share, for the same period the year prior. But Chief Executive Ivan Seidenberg cautioned that economic weakness and poor consumer demand would have an effect in the fourth quarter. “For the Christmas season, consumer spending will be somewhat lighter, and business spending will be somewhat curtailed,” Seidenberg said in a conference call, The Associated Press reported.

• New home sales posted an unexpected increase in September, the Commerce Department reported yesterday (Monday). New, single-family home sales rose 2.7% in September to a seasonally adjusted annual rate of 464,000 homes. Sales were still down 33% from a year ago and off almost 68% from the peak reached July 2005.

• Wal-Mart Stores Inc. (WMT) said yesterday (Monday) that it is slowing the pace of U.S. store openings and cutting back on capital spending in the face of economic headwinds, The Associated Press reported. The company plans to open 191 stores in the current fiscal year and between 142 and 157 stores in the next fiscal year. Wal-Mart opened 218 U.S. stores in fiscal 2008. Wal-Mart also plans $5.8 billion to $6.4 billion in capital expenditures this fiscal year for its U.S. division, down from $9.1 billion last year.

• Goldman Sachs Group Inc. (GS) Chief Executive Lloyd Blankfein called Citigroup Inc.’s (C) Vikram Pandit last month about a possible merger, but Pandit rejected the proposal, a source familiar with the situation told Reuters yesterday (Monday). Blankfein’s call was made shortly after Goldman got the approval to become a commercial bank on September 21 and with the knowledge of regulators, the source said.

Source: Global Investing Roundups Tuesday, October 28th, 2008

“Oil prices have witnessed a dramatic collapse – unprecedented in speed and magnitude,” OPEC said, adding that prices have fallen to levels that could jeopardize “many existing oil projects and lead to the cancellation or delay of others, possibly resulting in a medium-term supply shortage.”

The 1.5 million-barrel daily reduction exceeded the expectation of many analysts, but failed to rally crude prices which have plummeted 57% since hitting a record high record high of $147.27 a barrel on July 11.  Light, sweet crude for November delivery fell $3.09, or 4.55%, to settle at $64.75 a barrel on the New York Mercantile Exchange Friday.

“The financial crisis is already having a noticeable impact on the world economy, dampening the demand for energy, in general, and oil in particular,” the cartel said. “This slowdown in oil demand is serving to exacerbate the situation in a market which has been over-supplied with crude for some time.”

On Oct. 10, the International Energy Agency (IEA) lowered its forecast for 2008 global demand growth by 250,000 barrels per day (bpd) to 440,000. The agency cut its 2009 growth forecast by 190,000 bpd to 690,000.

In its October report, OPEC reduced its forecast for 2009 demand by 190,000 barrels a day, as well. It was the cartel’s seventh-consecutive forecast reduction. OPEC said that total oil consumption in developed countries fell by more than 1 million barrels per day in the 12 months through to the end of September.

Developed nations in 2009 will need only 400,000 barrels a day more oil than this year, the cartel said, whereas demand from emerging markets will increase by an estimated 1.1 million barrels.

The cut announced Friday, effective Nov. 1, was at the high end of analysts’ expectations, but as prices continue to slide, there is now a growing sense that the reduction won’t be enough.

Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut, told Bloomberg News that a further reduction of 500,000 barrels a day is possible.

“If prices continue to fall, they may find themselves having to revisit deeper production cuts,” Armstrong said.

OPEC President and Algerian Oil Minister Chekib Khelil said at a news conference that the cuts could reach 1.8 million barrels per day by the end of the year, which would mean an additional cut of 300,000 barrels a day, perhaps at the group’s next meeting in December. He denied that there would be any impact on inflation, or growth, if such a cut were necessary, and that the cartel would be willing to increase production should prices rebound.

With control over 40% of the world’s oil supply OPEC is the arbiter of oil prices. As such, the group walks a very fine line. If the cartel pulls the reins too hard on production, it risks a price spike that would cause demand to drop even further.

“They have to be careful of cutting production in a tough [global] economy,” Phil Flynn, analyst at Alaron Trading told The Associated Press. “They could make [falling oil demand] even worse.”

However, if OPEC overproduces, the price of oil could collapse, just is it did 11 years ago. In 1998, the price of crude skidded 28% over a 10-month period, below $10 a barrel, after OPEC raised quotas in the face of the Asian financial contagion. Oil prices that low make it unprofitable for corporations to begin new projects or seek out new oil sources.

A lack of exploration and development would make the world vulnerable to an energy shock when the global economy regains traction and demand picks back up. In fact, many analysts believe that even at current prices enough projects will be delayed, and enough investment curtailed, to spur a serious rebound in oil prices within the next few years.

Barclays Capital, for one, said the world faces “a serious supply-side crunch” within a few years when world demand comes back online.

“The dominant market view remains that sub-$70 short run prices are a stop on what might be a circuitous route back above $90, not a wind-swept motel on the route to even lower prices,” Barclays said.

Source: OPEC Cuts Output by 1.5 Million Bpd as Oil Prices Slump

Here’s a quote from the New York Times:

“The price of oil this year will turn on several developments around the world, among them the rise of China’s economy, whether the United States dollar continues falling as many in the industry expect and political uncertainty in nations with substantial oil reserves: Iraq, Russia, Venezuela and Saudi Arabia.”

Here’s the paragraph that followed that one:

“Major developments in any of these areas could cause the price of oil to rise from its current $32.52 a barrel for light crude on the New York Mercantile Exchange. Barring any unexpected or calamitous events, many analysts say it is even possible that the price will slip slightly, possibly to $27 to $30. But the price is expected to remain relatively high.”

Oh yeah, that quote is from a story The Times ran on Jan. 4, 2004.

Now, try this quote on for size. It’s from Time Magazine:

“And just as oil is seen driving American foreign policy, so too are China’s geopolitical strategies increasingly influenced by the country’s inability to meet its energy needs solely through domestic production. Last week Russian President Vladimir Putin began a state visit to China, during which Chinese President Hu Jintao was expected to press for the swift approval of several proposed billion-dollar, oil-and-gas joint ventures between the two countries, including a pipeline to connect Russia’s oil fields with China’s main domestic distribution network.”

Ripped from today’s headlines, right?

Nope. It’s from Time’s, Oct. 18, 2004 issue.

And, by the way, the New York Times was wrong. The price of light crude didn’t drop in 2004. By Oct. 18, it was making big news when it edged to $55 a barrel.

Of course, sooner or later, you know I am going to use a quote from fresh story. Maybe it’s this one. After all, it’s about the President’s reaction to something that’s been in the news as recently as last week.

“President [Bush] rejected suggestions Wednesday that he release oil from the government’s strategic reserve in a bid to ease the price of gasoline, accusing Democrats of “playing politics” over soaring gas prices.

“Bush said he “fully understands” how the rise in prices “affects American consumers, how it crimps the budgets of moms and dads who are trying to provide for their families, how it affects the truck driver, how it affects the small-business owner.”

But, guess what? That’s old news, too – Los Angeles Times May 20, 2004.

You see, my point is this – look around your world and ask yourself what’s really changed in the past four years… what’s really driving the price of oil up?

From where I sit, the answer is pretty much “not much that I can see,” unless you also consider how vast the leadership vacuum in Washington has become. Or, you consider oil company CEOs as national leaders.

And, before you Presidential apologists get all scrunchy nosed at the mere mention of Washington and leadership vacuum, I picked 2004 just to be fair. It represents four years of President Bush and fours years of a Democratic controlled Congress… four years that flashed by since these quotes were published.

Four years of zip, zilch, zed, zero on the leadership front when it comes to oil policy. That is, unless you call it leadership when oil executives whine to Congress on a regular basis about how their hands are tied when it comes to prices and anyway, “we’re always concerned about shareholder value.”

I love that last one by the way, like we’re so dumb that when they say “shareholder” they think we hear stakeholder.

The Truth Will Bust You Flat Broke

But, sometimes those oil executives do tell the truth, though blaming global demand is not part of that truth.

You see, the US burns about 21 million barrels of oil a day, of which close to 12 million barrels are imported. China only goes through about eight million barrels a day, of which four million must be imported.

But, the truth is that oil executives were correct back on April 1, when they told congress that the price of a barrel of oil should be about $55 (it was mere $100 then).

According to the oil executives, the price discrepancy – one that continues today – is due to oil futures speculators running the price up.

Retail gas hit its 22nd consecutive daily high yesterday (Thursday), according to AAA’s Daily Fuel Gauge Report.

The average nationwide cost for a gallon of regular unleaded was $3.952, while the average cost for a gallon of diesel was $4.787.

According to the AAA survey, gas prices have increased nearly 10% from a month ago and are up almost 24% from one year ago, CNNMoney.com reported.

Connecticut has the highest average by state at $4.223 for a gallon of regular, while Missouri has the lowest at $3.761.

The average cost of gas has crossed the $4 threshold in 11 states and Washington, D.C.

The cost of gas has climbed steadily higher, following in the wake of soaring oil prices. Oil reached a record high of just above $135 per barrel on May 22, but since then the price has dropped.

Crude oil for July delivery fell $4.31, or 3.3%, to $126.72 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange, according to Bloomberg data, as the high cost of gas is finally acting to curb consumer demand.

“There’s a lot of demand destruction taking place,” Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York, told Bloomberg News. “We are probably headed for $120 in the near term.”

But the slight reprieve we’re currently experiencing is likely to reverse itself just as quickly as we head into the summer driving season and speculators continue to push up the price of “black gold.”

Both Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) recently released reports that have oil soaring over $200 a barrel within the next two years.
Money Morning Investment Director Keith Fitz-Gerald – one of the first investment gurus to predict triple-digit oil prices – has boosted his own target, suggesting that oil could go as high as $225 a barrel.

“The math is really simple here,” Fitz-Gerald said in a recent e-mail interview from China. “We are burning through supplies at a rate that’s four times to five times faster than we’re discovering new reserves. Throw in a few [surprises]… perhaps a terrorist event… and add in the accelerating use of oil and gasoline in Third World countries, and we have the recipe for far higher prices.”

Source: Gas Prices Roar to a New Record for the 22nd Straight Day

Concern that crude and fuel stockpiles are higher than average also weighed on crude prices. US gasoline stockpiles are above their five-year seasonal average.

Crude oil for May delivery fell by as much as $1.28 to $103.55 a barrel on the New York Mercantile Exchange in electronic trade. Yesterday crude oil jumped nearly $4 a barrel.

Why has the oil price stayed above $100, when all other commodity classes have shown larger falls?

“A US energy economist has a neat explanation as to why this is happening to crude oil prices,” says Garry White, editor of Oustanding Investments UK.

“Writing in the Financial Times, Ohio Northern University Energy Economist AF Alhajji, said that Opec’s vanishing excess capacity was now keeping the oil price above $100. He argued that Gulf States’ power crises were now a primary driver of the oil price.”