Gold Falls 2 % as Investors Cash in on Gains
Source: http://feeds.feedburner.com/~r/ContrarianProfits/~3/535712439/13188Posted on Monday, February 9th, 2009 | In Market Commentary
The Markets await the Obama economic stimulus and bank rescue plans… AngloPlat reports higher earnings but flags up cost fears… Johnson Matthey (JMAT) sees 2009 platinum demand declining 5 pct…
This from Reuters, London:
Gold fell nearly 2 percent in Europe on Monday as investors took profits after recent gains, amid disappointment the metal had failed to beat resistance near $930 an ounce last week.
Spot gold slipped to $895.65/897.65 an ounce at 1446 GMT, down from $911.70 in New York late on Friday. Earlier it touched a low of $893.15.
U.S. gold futures for April delivery on the COMEX division of the New York Mercantile Exchange fell $16.30 to $897.60 an ounce.
“There has been some profit taking and disappointment we couldn’t break through $930, even with strong demand from ETFs,” said Commerzbank senior trader Michael Kempinski.
Signs of a recovery in equities, and hopes the Obama administration’s stimulus plan will boost U.S. growth, are taking the heat out of safe-haven buying for exchange-traded funds.
“Stocks had a good performance last week and Barclays had some nice figures today,” said Kempinski. “Probably the safe-haven buying argument is gone for the time being.”
Traders are awaiting an announcement on Washington’s massive stimulus plan and bank rescue package. The Senate was due to vote on the package later this session to clear the way for its passage on Tuesday.
SPDR Gold Trust (GLD), the world’s largest bullion-backed exchange traded fund, said its holdings were static on Friday after rising to a record on two successive days last week.
Gold continued to break its correlation with its main external drivers — oil and the dollar-euro exchange rate.
The dollar weakened against the euro, weighed down by uncertainty over the details of U.S. plans for massive fiscal stimulus, and a much-anticipated package to help banks. A weaker dollar usually benefits gold.
Gold also ignored rising oil prices, which are also typically supportive.
OUTPUT ROSE
The world’s third-largest gold miner, AngloGold Ashanti , said its output rose to 1.268 million ounces in the three months to end-December and said its cash costs at $422 an ounce showed a 13 percent improvement on the previous quarter.
The miner said it plans to keep trimming its hedgebook this year, using $900 an ounce as a guide price for the precious metal. The company reported a fourth-quarter headline loss of 5 cents per share, missing market expectations.
Silver slipped to $12.91/12.99 an ounce from $13.06. The white metal has benefited from technical buying as the gold-silver price ratio declines, analysts said.
“(Silver) continues to make back ground against gold as some investors look to cheaper alternatives to the yellow metal,” James Moore, an analyst at TheBullionDesk.com, said.
Platinum eased to $985/990 an ounce from $999.50. Precious metals consultancy Johnson Matthey said it expects platinum demand to fall 5 percent this year, and held its price forecast for the metal at $700-1,400 an ounce.
South African production will be slightly up, it said, due to new mines, despite the announced closures of some other facilities.
The world’s biggest platinum miner Anglo Platinum reported higher earnings but flagged up cost pressures as it cut its final dividend and said it may cut jobs if prices fall further.
The company, a unit of Anglo American , said it produced 2.39 million ounces of refined platinum last year, slightly below targets.
Spot palladium was at $206/210 against $210.
Palladium jumped 11 percent last week on the back of fund interest in the metal, which is seen as good value compared to platinum. The ZKB palladium ETF saw an inflow of more than 1 percent or 6,365 ounces last Thursday
LONDON, Feb 9 (Reuters)
Last 5 posts by Contrarian Profits
- Gold – Not the end, but possibly a correction - November 24th, 2009
- How do retail sales stack up in an atypical recovery? - November 24th, 2009
- The Best Energy Investments in the World - November 23rd, 2009
- Transportation Sector: powered by recovery - November 23rd, 2009
- The Dollar, the Euro, and being Bullish on Gold - November 20th, 2009
Anglo Platinum;, bank rescue package, bank rescue plans;, Barclays, cent;, Commerzbank, contrarian profits, Europe, Exchange, Gold Falls, ignored rising oil prices;, James Moore, Johnson Matthey, London, main external drivers oil;, Market Commentary, metal, Michael Kempinski;, New York, Obama administration, Palladium;, platinum miner, precious metal, Senate, senior trader, SPDR Gold Trust, TheBullionDesk.com, United States, USD, Washington, white metal;, yellow metal
ContrarianProfits.com is a financial news and opinion website with a twist. As investment guru Rick Rule puts it, “You are either a contrarian or a victim.” In the financial world, most people are losers because they just don’t know what game they’re playing. They think they can just get “into the market” along with everyone else, do what everyone else does, and they will make money. Not likely. By the time you’ve paid commissions, spreads, fees, taxes – and suffered the consequences of inflation – you’ll be very lucky just to have as much money as you started with.
ContrarianProfits.com is a contrarian site, in the sense that we provide ideas, opinions and recommendations that often run counter to the mainstream financial press. We do this not just to be contrary, but because we’ve realized that Rick is right. You don’t make money by following the crowd; you make money by leading it.
Why is this so? Well, it’s obvious that if you do the same thing everyone else does you’ll get the same results everyone else gets. On average, and over the long run, real investment returns for the typical investor cannot exceed the rate of growth of the economy itself. Everybody can’t get richer faster than everybody else. Real economic growth in the US today averages about 3% per year; if you don’t make any mistakes, that’s about what you can expect. Few people may be satisfied with 3% per year, but most feel comfortable in the middle of the financial herd and are happy to take whatever that gets them. If you’re one of those people, you will probably not like our site. It will make you uncomfortable.
If, on the other hand, you’re willing to look at things a little differently, you’ll appreciate the views of many of our columnists, contributors and visionaries.
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.