Gold rises 1 pct as investors take advantage of low prices

By Jan Harvey

LONDON, Aug 6 (Reuters) - Gold rose 1 percent in Europe on Wednesday as investors took advantage of a three-day fall in prices to buy below the key $900 an ounce support level.

Platinum also recovered after a sharp dip, which saw the white metal shed more than 10 percent in three sessions, as Xstrata's $10 billion bid for Lonmin boosted confidence in the market and a strike began in major producer South Africa.

Gold rose to $883.80/884.80 an ounce at 1014 GMT from $876.35/877.95 late in New York on Tuesday.

"Clearly there is some opportunistic buying going on at the moment," said Daniel Hynes, metals strategist at Merrill Lynch.

"We have seen numerous times over the past six months that $900 an ounce is a key support level, and whenever gold has fallen below that it has recovered relatively quickly."

The dollar retreated from seven-week highs against the euro after the Federal Reserve intimated, after leaving interest rates on hold at 2 percent late Tuesday, that it is in no hurry to hike rates. [ID:nL6200473]

A softer dollar will ease downward pressure on gold, which is often bought as a hedge against weakness in the currency.

Gold slipped more than $20 an ounce on Wednesday as part of a broader sell-off of commodities, led by crude oil. There are signs that investment demand may be softening.

The largest gold-backed exchange traded fund, New York's SPDR Gold Trust GLD, said its gold holdings fell 15 tonnes or 2.3 percent on Tuesday to a one-month low of 659.31 tonnes.

The fund's gold holdings are now nearly 7 percent below their all-time peak above 700 tonnes on July 21.

PLATINUM REBOUNDS

Platinum prices rebounded, helped by Anglo-Swiss miner Xstrata's $10 billion bid for the world's third biggest platinum producer, Lonmin.

Platinum rose more than 3 percent, and palladium 5 percent, as traders saw the bid as a vote of confidence in the future of the platinum market.

"Platinum has been buoyed by interest in the sector (linked to) Xstrata's bid for Lonmin," said Commerzbank trader Rory McVeigh. "It shows a more positive view of the platinum situation in South Africa."

Meanwhile a one-day strike started in South Africa, source of four out of five ounces of the world's platinum.

Anglo Platinum, the world's top producer of the precious metal, said some of its mines and a smelter had been affected by the strike. 

Gold producers Harmony, Anglogold Ashanti and Gold Fields all said their production had been hit.

Daniel Hynes said the disruptions would normally have been much more supportive for platinum, but that the negative demand outlook from the automotive sector was capping any gains.

He added, however: "The strike, and Xstrata's bid for Lonmin this morning, does suggest that there are still a lot of people who think the platinum market has a lot better times ahead."

Spot platinum hit a high of $1,615.50 ounce before easing to trade at $1,611.00/1,631.00 against $1,563.00/1,583.00 late in New York on Tuesday.

Spot palladium rose to a session high of $371.00/385.00 an ounce from $346.00/354.00 in New York.

Silver climbed to $16.64/16.70 an ounce from $16.45/16.53 late in New York.

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Gold Rallies as Dollar Decline Boosts Investor Demand for Metal

By Millie Munshi

July 31 (Bloomberg) -- Gold gained the most in three weeks after a report showed weaker-than-expected U.S. growth during the second quarter, sending the dollar tumbling and boosting the appeal of the metal as an alternative investment. Silver rose.

The economy grew at a 1.9 percent annualized rate, the Commerce Department said today, sending the dollar down as much as 0.8 percent against the euro. Gold, sometimes used as a safe- haven investment, rose to a record in March as the U.S. currency headed for record lows and the economic outlook dimmed.

The rise in the precious metal is ``certainly coming off the dollar after the GDP report,'' said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois. ``Gold looks very strong right now.''

Gold futures for December delivery rose $13.70, or 1.5 percent, to $926 an ounce at 10:48 a.m. on the Comex division of the New York Mercantile Exchange. A close at that price would be the biggest gain for a most-active contract since July 11.

Economists were expecting the U.S. to grow at a 2.3 percent rate, according to the median of 79 estimates in a Bloomberg News survey. The dollar dropped to as low as $1.5688 per euro.

Gold, priced in dollars, generally moves in the opposite direction of the U.S. currency. The metal reached a record $1,033.90 an ounce in March as the dollar headed to an all-time low of $1.6038 per euro on July 15.

Haven Asset

The precious metal may be insulated from a slowing global economy as investors turn to gold as an alternative to the dollar and as a haven asset, Evan Smith, who helps manage $1.5 billion at U.S. Global Investors Inc. in San Antonio, said yesterday.

Prices may rally later this year, according to Barrick Gold Corp., the world's largest gold producer.

``Inflationary pressures'' will continue to drive gold higher, Barrick Chief Financial Officer Jamie Sokalsky said today on a conference call with investors. ``The outlook for gold continues to be very positive.''

Prices will be boosted by rising geopolitical tensions, continued concerns about the financial and credit crisis, and constraints on gold supply, Barrick said.

The surging cost of gold, which has more than doubled since 2003, has boosted profit for mining companies. Barrick said today second-quarter profit increased 22 percent amid soaring prices for bullion.

Silver Gains

Silver also advanced after China said it will remove an export rebate on the precious metal.

``It is likely that the abolition of the rebate will depress exports'' from the Asian country, analysts at Barclays said in a report today.

Silver futures for September delivery added 29.5 cents, or 1.7 percent, to $17.76 an ounce on the Comex. Silver has gained 17 percent this year before today.

China is the worlds' third-largest silver producer, according to Barclays. The country also removed an export rebate on zinc. The move comes as China steps up efforts to cut a record trade surplus.

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Thursday July 24 2008 15:32 IST

MUMBAI: India's gold prices eased further on Thursday as weak crude oil eroded the value of the metal as an inflation hedge, and local buyers reacted with heavy purchases, dealers said.

"There is a huge demand... in the last couple of days alone 10 tonnes may have been sold all over India," said Prithviraj Kothari, director of Riddisiddhi Bullions Ltd.

Foreign gold, that guides the local market, rebounded from a two-week low on bargain hunting as crude oil stabilized after steep drops from its all-time highs this month.

Gold generally tracks crude oil as the latter signals inflation, while the metal negates it.

Investors, women and jewellers were thronging Zaveri Bazaar to buy gold, said Jitendra Kantilal of Jugraj Kantilal & Co, a prominent trader in Mumbai's Zaveri Bazaar.

"They are buying coins and bars... mostly 100 gram bars for investment," said Kantilal.

But consumers haven't given up hopes of more dips, said D.P. Naresh, a wholesaler in Bangalore.

"There is a lot of appetite for prices at lower levels," said Naresh. "At $915 an ounce, there would be huge interest."

India's lean season for gold purchases is set to end in another month after which festivals and weddings are expected to spur demand for the yellow metal.

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Comment:  In a typical response to political turmoil, gold prices edged up after Iran test-fired 9 long and medium range missiles early today in what its officials say is a response to threats from the U.S. and Israel.  The tests "demonstrate our resolve and might against enemies who in recent weeks have threatened Iran with a harsh language," one military official said. 

A similar flight to the safety of gold was seen after the December assassination of Benazir Bhutto. 

Gold Prices edge up after Iran Test-fires Missiles

July platinum rose 20 cents to $1,950.60 an ounce and September palladium added $5.75 to $448.20 an ounce, but September copper dropped 3 cents to stand at $3.67 a pound.

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. . . Gold is likely to regain $1,000 an ounce by the end of 2008 and work higher through 2009-2010, said John Hill, an analyst at Citigroup, in a research note.

By Pham-Duy Nguyen

April 2 (Bloomberg) -- Gold rose in New York for the first time in a week on speculation the dollar's rally against the euro will stall. Silver also gained.

The dollar was little changed against the euro after gaining 1.1 percent yesterday. The U.S. currency fell 7.6 percent in the first quarter, touching an all-time low against the euro, as gold gained 10 percent, reaching a record $1,033.90 an ounce on March 17.

``Gold depends on the direction of the dollar,'' said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. ``Everyone is wondering if this is the end of the dollar rebound.''

Gold futures for June delivery rose $6.20, or 0.7 percent, to $894 an ounce at 11:06 a.m. on the Comex division of the New York Mercantile Exchange.

Silver futures for May delivery rose 19.5 cents, or 1.2 percent, to $17.085 an ounce on the Comex. The price rallied 16 percent in the first quarter.

Federal Reserve Chairman Ben S. Bernanke today told Congress the economy may contract in the first half. The Fed has cut interest rates six times since September as a housing slump and a credit crisis threatened to push the economy into a recession.

``If the economy looks weaker than expected, then we're going back up with these commodities,'' Lesh said.

The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials has dropped 8.4 percent from a record on Feb. 29.

Gold has climbed for seven straight years as rising commodity costs and a weaker dollar boosted demand for the precious metal as a hedge against inflation.

Inflation Accelerates

Gold rose 31 percent last year as consumer prices climbed the most since 1990 and the dollar fell 9.5 percent against the euro.

Still, the metal has tumbled 14 percent from the highest ever. Investment demand in the StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, has fallen 3.3 percent to 642 metric tons from a record 663.8 tons on March 17.

``The bulls may attempt a push back to higher levels as the week closes out,'' said Jon Nadler, a senior analyst at Kitco Minerals & Metals Inc. in Montreal. ``There are no guarantees, however. Sentiment has been shaken and stirred across the board in commodities.''

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By Atul Prakash and Bate Felix

LONDON (Reuters) - Gold fell more than 2 percent in a broad commodities sell-off on Friday, with a rise in the dollar and softer oil prices dampening the metal's allure as an alternative investment.

Other key precious metals, base metals and major soft commodities traded lower, with investors pocketing profits before the end of the quarter.

Gold fell to $926.50 before rising to $933.30/934.20 an ounce at 11:40 a.m. EDT, against $951.80/952.60 in New York late on Thursday. Last week, it hit a record high of $1,030.80 an ounce before tumbling to a one-month low of $904.70.

"The market is really correcting itself, but it's a general move out of commodities. It's not just gold," said Jeremy East, head of metals trading at Standard Chartered Bank.

The market witnessed a heavy sell-off last week before rebounding on technical buying. Now it was witnessing a continuation of the downward trend, with people liquidating their positions and running for cash, East said.

"But I don't think the bullish trend is over. There is still buying interest, but in the short term the market has probably overdone on the upside. We are in a consolidation phase and gold may break back down below $900 again."

The dollar edged higher but hovered not far from record lows against the euro after U.S. data showed inflation pressures were tame in February, affirming expectations of further interest rate cuts by the Federal Reserve to boost a weakening economy.

A firmer dollar makes gold costlier for other currency holders and often lowers demand. Lower oil prices reduce the metal's appeal as a hedge against inflation.

Oil fell more than $2 to near $105 a barrel as crude flows through Iraq's pipeline system were restored after disruption by a bomb attack on Thursday.

"I would expect gold to continue bouncing around in the range of about $955 on the upside and down to about $915," said Tom Kendall, metals strategist at Mitsubishi Corporation.

"It's going to take until the second half of the next week before the market is going to be ready to make a more convincing push upward again."

U.S. gold futures for April delivery fell $16.6 an ounce to $932.20 -- off last week's record of $1,033.90.

LONG-TERM POSITIVE

Analysts were positive on the metal's outlook in the medium to long term.

"The sudden price pull-back across the precious metal complex during March has raised concerns that the bull run in this sector has drawn to a close. We disagree," said Michael Lewis, global head of commodities research at Deutsche Bank.

"We believe weakness in the U.S. dollar has not been exhausted and with U.S. real interest rates expected to move deeper into negative territory, we are maintaining our bullish outlook towards gold and silver prices," he said in a report.

In other metals, spot platinum rose to a one-week high of $2,040 an ounce before falling to a low of $1,980. It was last at $2,010/2,020, versus $2,023/2,033 in New York. It struck a record high of $2,290 on March 4 on supply fears driven by mining disruptions in top producer South Africa.

Platinum gained around 50 percent in 2008 after a power crisis in South Africa forced gold and platinum mines to shut down for five days in January, driving platinum prices.

But the metal, mainly used in jewelry and auto catalysts to clean exhaust fumes, tumbled to a six-week low at $1,805 an ounce last week.

Silver fell to $17.93/17.98 from $18.50/18.55 an ounce -- off a 27-year high of $21.24 hit on March 17. Palladium dipped to $439/446 an ounce from $445/450.

(Reporting by Atul Prakash; editing by Chris Johnson)

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03.27.08, 9:48 AM ET

LONDON (Thomson Financial) - Gold extended earlier losses as the dollar gained ground against the major currencies on relief that the revised US GDP reading for the fourth quarter did not yield any nasty surprises.

The Commerce Department said earlier the US economy grew at a 0.6 pct annualised pace in the fourth quarter, the same rate as reported in the previous estimate.

The reading was in line with analysts' estimates, leading the dollar to extend an earlier rebound from sharp losses yesterday, and leading gold lower in turn.

Gold usually moves in the opposite direction to the dollar as it is seen as an alternative asset to the US currency. Also, a stronger dollar makes dollar-priced gold more expensive for holders of other currencies.

At 1.27 pm, spot gold was trading at 946.45 usd an ounce against 949.00 usd in late New York trade yesterday.

In other data releases, the number of first time jobless claims filed in the week ending March 22 dropped unexpectedly, falling by 9,000 to 366,000. Economists were expecting new jobless claims to total up to 370,000.

'Spot gold was quoted down 10.00 usd at 944.00 usd bid per ounce as participants deemed the US data to be dollar-positive,' said Kitco analyst Jon Nadler.

He added the 0.6 pct growth reported for the US economy in the fourth quarter was giving some participants another excuse to sell on fears that a US recession will crimp commodities demand going forward.

Commodities declined sharply last week as these fears were temporarily re-ignited. They have recovered some of their losses this week however, as funds dip back into oil, metals and gold.

Most analysts expect the recovery to continue, with gold the best placed amongst all the metals to benefit from the view that it is a safe haven asset that holds its value in times of economic turmoil.

'Given the renewed pressure on the dollar and inflationary pressures created by rising oil prices we expect gold to continue its recovery,' said TheBullionDesk.com analyst James Moore.

He added that given the likelihood of further rate cuts by the Federal Reserve, and given the ongoing financial market turmoil, he sees gold eventually establishing fresh highs above the recent record of 1,032 usd.

Elsewhere, platinum dipped to 1,992 usd an ounce against 1,994 usd, silver was down at 18.14 usd an ounce against 18.33 usd, while palladium fell to 440 usd against 454 usd.

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GoldSeek - 2/8/08

Gold was up $5.90 to $906.40 per ounce in trading in New York yesterday and silver was up 23 cents to $16.74 per ounce. Gold continued to rally in Asia and surged in early trading in Europe and is up to $915 per ounce. Silver has also surged and is up to $17.02 per ounce.

Gold again rose in the other major currencies and surged to new near record highs in euro and sterling. The London AM Fix at 1030 GMT this morning was at $914 (up from $908.25 yesterday). Gold fixed at £468.96 (up from £465.53 yesterday) and €631.17 (up from €620.516 yesterday). (See table of record highs in various currencies below.)

Gold looks set to challenge last week’s $936.80 record high and once again confound the skeptics. Gold is surging in all major currencies as it seems likely that major Central banks are set to cut interest rates in order to prevent a global recession. Even the ECB, the most hawkish and inflation conscious of all the central banks, is faltering in its resolve to target and fight inflation which is negative for the euro and indeed for all fiat currencies and indeed the asset classes denominated in those currencies.

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