Wednesday, January 17, 2007


BOJ: Back On Hold

Bloomberg reports on currencies. "The yen may set a 13-month low against the dollar on speculation the Bank of Japan will refrain from lifting interest rates at a policy meeting ending today. Japan's currency may extend its slide, after touching the weakest since December 2005 yesterday, as local media including the Nikkei newspaper reported the central bank is likely to hold its benchmark rate at 0.25 percent. A report yesterday showed Japanese consumer confidence fell last month."

"'The economy is yet to be on a solid footing and there is no rush to raise interest rates,' said Michael Woolfolk, senior currency strategist at the Bank of New York in New York. 'The yen has further scope to decline.'"

"The yen traded at 120.65 per dollar at 6:53 a.m. in Tokyo. It touched 120.88 yen yesterday, the weakest since 121.06 yen on Dec. 12, 2005. The Japanese currency traded at 156.12 per euro. It touched a record low of 158.06 per euro Jan. 3. The dollar traded at $1.2939, after declining yesterday on government data showing record buying of foreign stocks by U.S. investors."

"The Bank of Japan is 'leaning toward' delaying a boost, the Nikkei reported, without saying where it got the information. Kyodo News reported two days ago that the central bank is 'unlikely' to lift rates this week, because it wants to monitor prices and consumption further."

"Canada's dollar rose from near a 13- month low as crude oil and gold advanced, enhancing the currency's appeal. Commodities account for about 54 percent of Canada's exports. The Canadian dollar yesterday fell the most in more than two months as crude oil dropped to a 19-month low."

"The currency is getting some relief from the stabilizing prices of crude and gold,' said Maria Jones, a currency strategist at TD Securities Inc. in Toronto. 'Canada is also benefiting from a general weakness in the U.S. dollar.'"

"The Canadian currency rose to 85.25 U.S. cents at 3:58 p.m. in Toronto from 85.03 U.S. cents yesterday. One U.S. dollar buys C$1.1730. Last week the Canadian currency touched 84.72 U.S. cents, the lowest since Nov. 22, 2005."

From Reuters. "Gold jumped about 1 percent on Wednesday, hitting its loftiest level since its recent sell-off, buoyed by robust demand from speculators and physical buyers as oil prices rebounded and the dollar turned lower. Traders and analysts said the move was aided by currency moves and technical buying."

"Spot gold rose to $632.00/633.00 an ounce by 3:33 p.m EST, up from $625.20/626.20 in New York late on Tuesday. Most-active gold for February delivery on the COMEX metals trading division of the New York Mercantile Exchange settled up $7.40, or 1.20 percent, at $633.30 an ounce and traded in a range between $620.60 and $634.80 an ounce."

"'Overall it appears as if the recent range-trading pattern continues. Gold should continue to track major oil price moves,'said Alexander Zumpfe, trader at Germany's Heraeus."

"Gold has mostly held up in the face of oil's losses. It is currently down by about 1 percent since the start of the year, and even at its low point earlier in the month it was down only about 5 percent. Oil, by contrast, has fallen 18 percent."

"'The crude market has calmed down considerably. This should bring attention back into the metal markets,' said George Nickas at FC Stone. 'At some point, gold is going to divorce itself from the heaviness of the crude market. And then gold should move into a higher ground,' he said."

"John Reade, metals analyst at UBS, said in his daily note that the sharp January sell-off in gold and silver had triggered profit-taking in exchange-traded investment products. Reade wrote that six gold exchange-traded funds (ETFs) had seen redemptions and outflows of just more than 250,000 ounces of gold after the yellow metal tumbled about 3 percent on Jan. 5."

"Reade noted that he did not view those recent reductions as a change in behavior, and he expected metal in trust in the gold and silver ETFs to grow again soon."

"Silver followed gold's firmer tone, gaining to $12.770/12.840 an ounce from $12.550/12.620. Platinum rose to $1,143/1,149 an ounce from $1,135/1,141. Palladium was unchanged at $326/329."

Mogambo sez we should be all out buying PMs, but I'd still like to see a dip below $600 again.

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