Friday, May 18, 2007
Gold Bounces On China Move
MarketWatch reports on the markets. "Gold futures posted modest gains Friday, as weakness in the dollar, which fell against the yen after China widened the yuan's trading band, underpinned demand for the precious metal. Gold for June delivery closed up $4.80 at $662.0 an ounce on the New York Mercantile Exchange. However, gold futures have lost more than $10 on the week."
"'The dollar giving up some of its recent gains certainly propped gold higher today,' said David Meger, senior metals analyst at Alaron Trading. 'It prompted a bit of short covering in the precious metals market.'"
"There has also been 'a lot of speculation about the bank of China tightening their monetary policy,' Meger said. That speculation will likely be a negative force towards both the base and the precious metals in the near term."
"'This [move was] in an effort to curb rampant speculative fever and overheating conditions in its markets,' said Jon Nadler, analyst at Kitco Bullion Dealers. 'We cannot over-emphasize the bearish implications of this initial move to curb the euphoria that has buoyed speculators for so long,' Nadler said."
"Japan's yen gained on the news from China. The dollar traded mixed against other major currencies ahead of a report expected to show U.S. consumer sentiment fell slightly this month."
"Other metals prices also posted gains. July platinum closed up $8.30 at $1,326.20 an ounce. June palladium rose $4.85, or 1.4%, to close at $362.25 an ounce. July silver ends up 12.0 cents at $13.003 an ounce."
From China Daily. "China will widen the floating band of yuan against US dollar from 0.3 percent to 0.5 percent as of May 21, the People's Bank of China, or the central bank, announced on Friday."
"'The higher flexibility indicated that the fluctuations of yuan will rely more on market forces. It's a good step forward in the correct direction,' said Zuo Xiaolei, an analyst with Galaxy Securities."
"'The dollar giving up some of its recent gains certainly propped gold higher today,' said David Meger, senior metals analyst at Alaron Trading. 'It prompted a bit of short covering in the precious metals market.'"
"There has also been 'a lot of speculation about the bank of China tightening their monetary policy,' Meger said. That speculation will likely be a negative force towards both the base and the precious metals in the near term."
"'This [move was] in an effort to curb rampant speculative fever and overheating conditions in its markets,' said Jon Nadler, analyst at Kitco Bullion Dealers. 'We cannot over-emphasize the bearish implications of this initial move to curb the euphoria that has buoyed speculators for so long,' Nadler said."
"Japan's yen gained on the news from China. The dollar traded mixed against other major currencies ahead of a report expected to show U.S. consumer sentiment fell slightly this month."
"Other metals prices also posted gains. July platinum closed up $8.30 at $1,326.20 an ounce. June palladium rose $4.85, or 1.4%, to close at $362.25 an ounce. July silver ends up 12.0 cents at $13.003 an ounce."
From China Daily. "China will widen the floating band of yuan against US dollar from 0.3 percent to 0.5 percent as of May 21, the People's Bank of China, or the central bank, announced on Friday."
"'The higher flexibility indicated that the fluctuations of yuan will rely more on market forces. It's a good step forward in the correct direction,' said Zuo Xiaolei, an analyst with Galaxy Securities."
# posted by Ben Jones @ 12:34 PM 
