Press review - page 260

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Gold rebound coming in 2015: George Gero during a CNBC interview for “Futures Now” (based on cnbc article)

According to George Gero of RBC Capital Markets, gold is set to reverse its trend in 2015. During a CNBC interview for “Futures Now” he observed: “The decline from the $1,900s down to the $1,150s is a major decline, and it was reflected by all the funds fleeing gold and running into better-performing assets, whether it’s equities or debt, and that’s been continuing. In 2014, gold hasn’t been helped by the dollar’s rally. The greenback has shown serious strength against other currencies, which has reduced gold’s attractiveness. After all, since gold is priced in dollars, an increase in the value of a dollar means a decrease in the value of an ounce of gold. Additionally, since people buy gold to hedge against potential inflation, ebbing inflation fears dull gold’s appeal.”

Gero acknowledges that the sell off in crude is anti-inflationary—so the people that have been looking for inflation haven’t really found it. But he adds that “now you’re going to see some changes based on all the stimulus in Europe, in China and in Japan.
 

Gold: The Year Ahead (based on goldseek artricle)

  • U.S. economic performance and monetary policy is key – but under almost any economic scenario, I see gold appreciating.
  • Despite a few recent positive indicators – and the benefit of lower energy costs – I see the macro economy stumbling in the months ahead.  This past year, the gold price has been negatively impacted by expectations the Fed will begin raising interest rates and shifting monetary policy away from accommodation.  
  • Just as the market’s expectations of higher interest rates have been a negative for gold, a reversal in interest-rate expectations will be a plus for gold in the coming year.
  • Over the past three years, Wall Street’s booming stock and bond markets have been tough competitors to gold. 
  • During this time, institutional investors and traders have shunned gold, preferring to put their money into ordinary stocks and bonds where high returns have seemed assured.  One indicator has been the fire-sale of hundreds of tons of metal by exchange-traded funds.  These sales have now slowed to a trickle – and much of the metal previously in weak hands has now moved to long-term gold bulls in Asia.   
  • We expect a dose of realism and a substantial correction (or worse) on Wall Street will reverse the flow of investment and speculative funds away from stocks and bonds back into gold. 
  • Even if I’m wrong and the U.S. economy continues to gather momentum, gold’s long-term prospects still look bright. 
  • Under this rosy scenario, renewed Federal Reserve monetary restraint along with higher-than-expected interest rates would scuttle the advance in equity and bond prices, sending a growing number of investors back to gold. 
  • Don’t forget the insatiable appetite for gold in China, India, and other East Asian markets.  Investors in this region will continue buying gold however their economies perform.  This year, India and China, the world’s largest gold markets, will have bought over 2000 tons – and this is likely to rise in the year ahead thanks to a relaxation of import restrictions in India and a flight from equity and real-estate investment in China as the economy slips into a lower growth trajectory. 
  • Last but not least, a growing number of central banks will continue buying gold to diversify their official monetary reserves away from excessive U.S. dollar exposure.  Importantly, these are long-term acquisitions and most of this metal will not come back to the market anytime soon, possibly for decades or longer. 
 

Trading Video: Short Term Euro and Yen Setups the Order for Next Week (based on dailyfx article)

  • Tepid liquidity this past week curbed trade opportunities and another lull is expected on New Year's Day
  • Medium and long-term trade setups are unlikely to progress this week, but short-term options can do well
  • There are plenty of short-term breakouts setting up for EURUSD, EURJPY, AUDUSD and others

There are more than a few great technical and fundamental setups tempting FX traders. Yet, many of these high-profile opportunities call for dramatic breaks, reversals or trend upgrades which requires deep market liquidity. Similar to this past week's Christmas drain, the New Year's holiday in the week ahead will create another whirlpool. As the big setups gestate, we should turn our focus to the many short-term setups that have formed in the market. Many of the majors and crosses present the proper technical patterns to trigger breakouts, but certain pairs offer different circumstances. With a Greek Parliament election on Monday; EURUSD, EURGBP and EURJPY, are fundamentally loaded. Conversely, pairs like GBPJPY, GBPNZD and GBPAUD are naturally more volatile. We discuss next week's trading landscape in the weekend Trading Video.


 

Gold Prices Likely To Start 2015 Weak, But Rise Into Year End (based on kitco article)

Gold prices could be under some pressure in the first half of 2015 as the market anticipates the Federal Reserve raising interest rates, but once the Fed moves, the yellow metal may be able to end the year on firmer footing. Market watchers said once the Fed starts the cycle of interest rate increases, the market can focus on how high the rates may rise, which will be less of a weight since the expectation is that rates won’t rise very much. Higher interest rates are bearish for gold because they give investors a reason to move money into investment vehicles that produce a yield. Gold has no yield.

“Looming Federal Reserve interest rate increases in the second half of 2015 and the stronger U.S. dollar will keep pressure on gold prices through the year. The gold market could see rallies if demand improves for physical gold, but weaker growth in much of the world will temper such prospects,” said Rob Haworth, senior investment strategist, U.S. Bank Wealth Management.

Erica Rannestad, senior analyst, precious metals demand, Thomson Reuters GFMS, agreed that gold prices will likely be lower in the first half of the year because of the Fed’s expected action, which she called “the top driver” for gold-price direction.

She said gold prices will likely consolidate next year, and lists and a 2015 average price $1,175, with prices trending higher in the second half of the year.

 

JP Morgan lowers gold, silver forecasts on slack buying interest (based on bulliondesk article)

JP Morgan has lowered its 2015 and 2016 average gold and silver price forecasts on reduced demand from investors and consumers.

The broker reduced its 2014 gold forecast by two percent to $1,275 per ounce because these key supportive factors have been underperforming throughout the year.

“While seasonal, physical buying emerged in Asian markets in September after a drop in price, many headwinds strengthened at the same time,” it said.

“The Asian gold consumer – a major supportive factor last year – proved to be very price sensitive and has been unwilling to step into the market at prices above $1,260,” it added. “Gold investors, in both Western and Asian countries, have also been largely absent from the market for the majority of this year.”

The bank also revised its forecast for 2015 four percent lower to $1,220 per ounce, citing lower inflation, reduced inflation expectations, higher US interest rates and a stronger US dollar.

The spot gold price was last at $1,146.50/1,147.30 per ounce, up $3.30 on Wednesday’s close, with the dollar at a near-two-year high against the euro at 1.2422.

The bank also downgraded its silver price forecasts for both 2014 and 2015 – it now sees silver averaging $19.56 per ounce this year, down five percent on the previous forecast of $20.52. It also forecast silver to average $18.25 in 2015, down 12 percent on its previous prediction of $20.75.

Silver bottomed out at $15.39/15.43 per ounce earlier, just above the low of $15.15 it hit yesterday, which was the lowest since February 2010.

 

Risk Of Russian Gold Selling? (based on binaryoptionevolution article)

"The situation in Russia raises concerns within the precious metals market that the central bank might sell its holdings of gold and palladium. The amount of palladium holdings is unknown, but for gold, the Central Bank of Russia is currently the sixth largest holder of the metal at 1,168.7 tonnes, after having built up its gold reserves over the last several years. The CBR's gold holdings make up about 10.2% of total reserves.

...Russia's gold reserves are worth about $45bn around current price levels. To put this into context, the CBR's currency intervention year-to-date has been more than $80bn. Even if the entire gold position was liquidated, it would clearly not be enough to defend the rouble

Although the possibility cannot be ruled out with certainty, we think the risk that Russia will sell its precious metals holdings is probably small."

 

Gold Near Steady to Start Holiday-Shortened Trading Week (adapted from Forbes article)

Gold prices are trading not far from unchanged in quieter dealings early U.S. trading Monday. The Christmas holiday on Thursday is making for thin volumes as many players are already off for the week. February Comex gold was last up $0.20 at $1,195.80 an ounce. Spot gold was last up $1.30 at $1,196.00. March Comex silver last traded down $0.01 at $16.02 an ounce.

Trading activity could briefly pick up Tuesday. The main U.S. economic report on tap this week will be the third-quarter gross domestic product report on Tuesday. GDP is expected to be up 4.3%, year-on-year, versus the previous reading of up 3.9%. Tuesday could be the busiest trading day of the week as there are also several other key U.S. economic reports due out. Look for trading activity to then quickly fade ahead of the Christmas holiday Thursday, and to remain light until the new year begins.

European and Asian markets were also quieter overnight. The feature in Europe was the Italian 10-year bond yield fell to a record low of 1.68%, reports said. Ironically, EU country bond yields are falling when anxiety about the health of the European Union is rising. A main reason for this paradox is that there are also heavy odds in favor of the European Central Bank initiating quantitative easing of its monetary policy next year. That prospect is leading investors to put their likely deflating Euros into even shaky EU governments’ debt.

The Russian ruble is stable Monday, following last week’s turmoil. Last week the ruble fell to 80 versus the U.S. dollar and was trading at 57 to the greenback on Monday.

Crude oil prices are also stable Monday following the big plunge in recent months that saw prices last week hit a five-year low. Saudi Arabia’s oil minister said in reports Monday that crude oil prices may never reach the $100 mark again.

 

Oil, the Dollar, Supply $ Demand, Market Timing and the importance of Risk Managment (based on fxstreet article)


An Integral Part of the XLT program, Brandon Tristan joins Merlin for a look back at 2014. The dou talk about Oil, the Dollar, Supply $ Demand, Market Timing and the importance of Risk Managment. They also discuss the Aussie Japanese Yen Currency Pair per a listener request. Brandon also offers some insights into what he will be doing different in 2015.

 

Gold Lower as Markets Digest Greek Vote (based on foxbusiness article)

Gold edged lower on Monday, giving up some of the previous session's sharp short-covering gains, but uncertainty over the prospect of fresh elections in Greece kept the metal underpinned near $1,200 an ounce.

European shares and periphery euro zone bonds tumbled after the Greek parliament rejected the government's presidential candidate, setting the stage for an election that the anti bailout Syriza could win.

Spot gold was down 0.2 percent at $1,192.50 an ounce by 1415 GMT, after a gain of 1.8 percent on Friday, when it had touched $1,199, its highest since Dec. 22 and its biggest one-day jump in 2-1/2 weeks.

Bullion's rise came in thin market conditions due to the Christmas and year-end holidays and it was unclear whether the last session's gains would be maintained when trading picked up again.

"Friday's sharp move was a typical non liquidity move, so naturally enough it gives back a bit today," Saxo Bank's head of commodity research Ole Hansen said. "We are less than 1 percent away from where we finished a year ago, and I do not think we will sway much away from current prices."

"(The news from Athens) raises the risk of Grexit (Greek euro exit) once again - not the best climate for Europe to begin the new year," he added. "That could provide some support, although we need traders willing to put on risk and they are currently missing."

U.S. gold futures for December delivery were down $2.20 an ounce at $1,193.10.

Bearish sentiment in the bullion market was evident in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund. The fund's holdings fell 0.08 percent to 712.30 tonnes on Friday, a six-year low.

Demand for the metal was soft overnight in Asia, the primary market for physical gold dealing.

"The premium on the Shanghai Gold Exchange was rather uninspiring, trading between par and $1 above spot for most of the day," MKS said in a note.

 

Gold and Silver Prices in 2015 (based on moneymorning article)

Precious metals haven't grabbed dramatic headlines like oil and gas have.

But their story is no less exiting. And the metals remain a fundamentally critical part of the global economic and strategic landscape.

Indeed, gold and silver took roller coaster-like rides throughout the year, both screeching towards their respective price lows before bouncing, albeit cautiously, ahead.

With the benefit of hindsight and the value of foresight, it's time to look at how gold and silver acted in 2014, and what we can do to profit in 2015.


As you follow along with the graph, note that gold started out with a bang, bottoming around $1,195 December 19, 2013, then surging upward 12% to $1,390 by mid-March. It then headed back to the $1,300 level, and meandered sideways between $1,250 and $1,350 until mid-year.

The U.S. dollar began a strong climb from July onwards, likely in anticipation of the Fed ending its asset purchase program in October, as it ultimately did.

By November the SPDR Gold Trust ETF, the largest gold ETF, saw its gold holdings at six-year lows. Gold had become almost universally hated, which may well have marked the bottom.

And then it embarked on a new rise…

One of the biggest positives is how gold held up over the recent months: as oil prices plunged 27% from early November into mid-December, gold climbed by 7%.

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