Thursday, December 21, 2006
Gold In "Consolidation Mode"
The Associated Press reports on the US dollar. "The dollar moved a little higher against the euro on Thursday despite a downward revision to U.S. economic growth figures. The U.S. Commerce Department said gross domestic product rose at a 2 percent annual rate in the third quarter, down from a previous estimate of 2.2 percent. Economists had expected the estimate to hold."
"The euro bought US$1.3152 in afternoon European trading, down from US$1.3178 in New York late Wednesday. The 12-nation currency had risen as high as US$1.3216 earlier in Thursday's session. The British pound declined to US$1.9580 from US$1.9644. The dollar was barely changed against the Japanese currency; it bought 118.33 yen, compared with 118.34 on Wednesday."
"Also Thursday, the Labor Department said the number of newly laid-off workers signing up for unemployment benefits rose by 9,000 to 315,000 last week, in line with economists' projections."
"Brian Dolan, head of currency research at Forex.com, said of the muted response to the GDP data: 'By the final revision you don't get much reaction. It's kind of ancient history and the market is focused on here and now.'"
From MarketWatch. "Gold futures closed lower Thursday to tally a two-session loss of nearly $4. 'Gold still remains closely pegged to the movements made by the dollar and oil, but while both are likely to prove supportive in the year ahead, short-term the market is still in consolidation mode with traders winding down for the holiday period,' said James Moore, an analyst at TheBullionDesk.com."
"Gold for February delivery closed down $2.70 at $621.60 an ounce on the New York Mercantile Exchange. The contract closed $1.10 lower on Wednesday with traders already reporting increased volatility as volumes thinned heading into the holiday season."
"March silver gave back 15.5 cents, or 1.2%, to end at $12.49 an ounce after losing 6.5 cents on Wednesday. January platinum lost $1.70 to end at $1,124.30 an ounce and March palladium closed off 45 cents at $327.30 an ounce."
"Analysts at Goldman Sachs recently cut their gold-price estimate for 2006 to an average of $615 an ounce from $621, and for 2007, it reduced the estimate to $689 from $700. 'Our adjusted forecasts imply a later-than-previously-expected rally in gold prices, factoring forward gold-curve trends and an easing of interest rates by the Federal Reserve starting in 2007,' they said in a research note."
From Business Day. "Gold see-sawed today ahead of the release of key US data, which may offer clues as to whether the US Federal Reserve will cut interest rates next year and determine the metal’s direction. Trading was thin ahead of the year-end holidays, making gold prone to sharp fluctuations. Trading range was seen at $610 to $650 until the end of the year, according to some dealers."
"'With fund managers looking to balance their accounts, do some window dressing before the end of the year, there is the potential for a few wobbles in things like the US dollar and the oil price,' said a dealer in Sydney. 'That should be reflected in the gold price as well,' he said."
"Spot gold hit a bid high of $621,30 ounce, still down slightly from $621,70/623,20 an ounce late in New York yesterday. It had fallen to as low as $619,60 today."
"'Many analysts expect gold to continue to remain within a narrow range going into year-end with market conditions remaining illiquid,' said Investec Australia in a daily report. 'However, this should not be taken as a given, as relatively small volumes have the ability to move the market substantially during these illiquid periods,' said Investec, which pegged support around $615 an ounce."
"The euro bought US$1.3152 in afternoon European trading, down from US$1.3178 in New York late Wednesday. The 12-nation currency had risen as high as US$1.3216 earlier in Thursday's session. The British pound declined to US$1.9580 from US$1.9644. The dollar was barely changed against the Japanese currency; it bought 118.33 yen, compared with 118.34 on Wednesday."
"Also Thursday, the Labor Department said the number of newly laid-off workers signing up for unemployment benefits rose by 9,000 to 315,000 last week, in line with economists' projections."
"Brian Dolan, head of currency research at Forex.com, said of the muted response to the GDP data: 'By the final revision you don't get much reaction. It's kind of ancient history and the market is focused on here and now.'"
From MarketWatch. "Gold futures closed lower Thursday to tally a two-session loss of nearly $4. 'Gold still remains closely pegged to the movements made by the dollar and oil, but while both are likely to prove supportive in the year ahead, short-term the market is still in consolidation mode with traders winding down for the holiday period,' said James Moore, an analyst at TheBullionDesk.com."
"Gold for February delivery closed down $2.70 at $621.60 an ounce on the New York Mercantile Exchange. The contract closed $1.10 lower on Wednesday with traders already reporting increased volatility as volumes thinned heading into the holiday season."
"March silver gave back 15.5 cents, or 1.2%, to end at $12.49 an ounce after losing 6.5 cents on Wednesday. January platinum lost $1.70 to end at $1,124.30 an ounce and March palladium closed off 45 cents at $327.30 an ounce."
"Analysts at Goldman Sachs recently cut their gold-price estimate for 2006 to an average of $615 an ounce from $621, and for 2007, it reduced the estimate to $689 from $700. 'Our adjusted forecasts imply a later-than-previously-expected rally in gold prices, factoring forward gold-curve trends and an easing of interest rates by the Federal Reserve starting in 2007,' they said in a research note."
From Business Day. "Gold see-sawed today ahead of the release of key US data, which may offer clues as to whether the US Federal Reserve will cut interest rates next year and determine the metal’s direction. Trading was thin ahead of the year-end holidays, making gold prone to sharp fluctuations. Trading range was seen at $610 to $650 until the end of the year, according to some dealers."
"'With fund managers looking to balance their accounts, do some window dressing before the end of the year, there is the potential for a few wobbles in things like the US dollar and the oil price,' said a dealer in Sydney. 'That should be reflected in the gold price as well,' he said."
"Spot gold hit a bid high of $621,30 ounce, still down slightly from $621,70/623,20 an ounce late in New York yesterday. It had fallen to as low as $619,60 today."
"'Many analysts expect gold to continue to remain within a narrow range going into year-end with market conditions remaining illiquid,' said Investec Australia in a daily report. 'However, this should not be taken as a given, as relatively small volumes have the ability to move the market substantially during these illiquid periods,' said Investec, which pegged support around $615 an ounce."
# posted by Ben Jones @ 1:32 PM 
