Thursday, February 23, 2006
Fed 'Intervenes' In Currency Market: Grandich
MarketWatch has the latest trading numbers. "Gold futures lost 1% Thursday to close at their lowest level in a week after chalking up gains totaling nearly $14 an ounce in the past few sessions. Gold for April delivery fell $5.70 to close at $550.90 an ounce, a level not seen since Feb. 16. On Wednesday, the contract closed unchanged, following three sessions of solid gains."
"'With the near-term outlook turning ominous' prices may work back below the Feb. 14 low, with $525 'looking like a logical downside objective basis for the April contract,' said Dale Doelling, chief market technician at Trends In Commodities.
If prices 'break' to the 50-day moving average of $545.50, 'it will just be another attempt to drive the weaker longs from the market and, in turn, put the market back into [an] extreme oversold condition, which would act as a springboard for the next leg up,' he said."
"Meanwhile, the minutes released from former Federal Reserve chief Alan Greenspan's last interest-rate meeting showed that Richmond Fed President Jeffrey Lacker dissented from votes to authorize the Fed's trading of foreign currencies, including the euro and yen, according to Peter Grandich, editor of the Grandich Letter.
This raises two questions: 'Why does the Fed think it must be prepared to intervene ... and if they're willing to intervene in the currency market, how about the stock, bond or gold market?' said Grandich."
"Citigroup's expecting gold to move higher over time, and to test $600 an ounce at some point this year. In the meantime, 'we would not view a correction to the $520-$540 level as any more negative than the eight such episodes greater than $20 per ounce during 2004-2005,' said Hill."
In mining news. "Other metals trading in the futures market followed gold lower Thursday. March silver futures fell 10.8 cents to close at $9.467 an ounce. April platinum lost $7.40 to finish at $1,023 and March palladium eased $2.15 to close at $285 an ounce."
"Barrick Gold Corp. fourth-quarter profit rose to $175m from $156m in the same period a year earlier, and its annual profit swelled 62% to $401m, the gold producer reported Wednesday. The world’s biggest gold producer attributed the increase in quarterly earnings to higher gold prices and sales, lower cash costs and special items."
"Shares of Barrick Gold Corp. (ABX.TO) dropped 6 percent on Thursday after it forecast higher-than-expected costs and disappointing output numbers from its Placer Dome Inc. (PDG.TO) acquisition. Total cash costs are expected to be between $275 and $290 an ounce of gold and about $1.10 per pound of copper."
"Analysts were expecting output of more than 9 million ounces of gold, and cash costs around the $250 an ounce mark. 'People were expecting better news in terms of the production outlook of Barrick and costs seem to be higher than expected,' said Michael Fowler."
"'With the near-term outlook turning ominous' prices may work back below the Feb. 14 low, with $525 'looking like a logical downside objective basis for the April contract,' said Dale Doelling, chief market technician at Trends In Commodities.
If prices 'break' to the 50-day moving average of $545.50, 'it will just be another attempt to drive the weaker longs from the market and, in turn, put the market back into [an] extreme oversold condition, which would act as a springboard for the next leg up,' he said."
"Meanwhile, the minutes released from former Federal Reserve chief Alan Greenspan's last interest-rate meeting showed that Richmond Fed President Jeffrey Lacker dissented from votes to authorize the Fed's trading of foreign currencies, including the euro and yen, according to Peter Grandich, editor of the Grandich Letter.
This raises two questions: 'Why does the Fed think it must be prepared to intervene ... and if they're willing to intervene in the currency market, how about the stock, bond or gold market?' said Grandich."
"Citigroup's expecting gold to move higher over time, and to test $600 an ounce at some point this year. In the meantime, 'we would not view a correction to the $520-$540 level as any more negative than the eight such episodes greater than $20 per ounce during 2004-2005,' said Hill."
In mining news. "Other metals trading in the futures market followed gold lower Thursday. March silver futures fell 10.8 cents to close at $9.467 an ounce. April platinum lost $7.40 to finish at $1,023 and March palladium eased $2.15 to close at $285 an ounce."
"Barrick Gold Corp. fourth-quarter profit rose to $175m from $156m in the same period a year earlier, and its annual profit swelled 62% to $401m, the gold producer reported Wednesday. The world’s biggest gold producer attributed the increase in quarterly earnings to higher gold prices and sales, lower cash costs and special items."
"Shares of Barrick Gold Corp. (ABX.TO) dropped 6 percent on Thursday after it forecast higher-than-expected costs and disappointing output numbers from its Placer Dome Inc. (PDG.TO) acquisition. Total cash costs are expected to be between $275 and $290 an ounce of gold and about $1.10 per pound of copper."
"Analysts were expecting output of more than 9 million ounces of gold, and cash costs around the $250 an ounce mark. 'People were expecting better news in terms of the production outlook of Barrick and costs seem to be higher than expected,' said Michael Fowler."
# posted by Ben Jones @ 12:12 PM 
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Today as I type, it is holding steady at $556-$557. :) It could be partly in reaction to the attempted Saudi Oil complex attack. My stock portfolio (metals and energy) has hit a new high today: it gives me mixed feelings about terrorists.
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