{"id":41822,"date":"2013-09-09T09:00:36","date_gmt":"2013-09-09T13:00:36","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=41822"},"modified":"2013-09-09T09:00:36","modified_gmt":"2013-09-09T13:00:36","slug":"gold-dull-thin-specs-cut-shorts-analysts-expect-post-fed-losses","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2013\/09\/09\/gold-dull-thin-specs-cut-shorts-analysts-expect-post-fed-losses\/","title":{"rendered":"Gold “Dull & Thin” as Spec’s Cut Shorts But Analysts Expect Post-Fed Losses"},"content":{"rendered":"

London Gold Market Report<\/strong>
\nfrom Adrian Ash<\/strong>
\nBullionVault<\/strong><\/a>
\nMon 9 Sept 08:30 EST<\/strong><\/p>\n

The PRICE of GOLD edged $10 per ounce lower Monday morning in what dealers called “dull, thin” trade following Friday’s sharp jump on US jobs data.<\/p>\n

A surge in Asian share prices \u2013 attributed to Tokyo winning the 2020 Olympics bid, plus official news of 7% annual growth in China’s exports and imports in August \u2013 failed to lift European stock markets.<\/p>\n

Gold dropped back to $1382 as commodities also fell with major European government bond prices.<\/p>\n

Silver lost 1.5% from Friday’s finish, reached after weaker-than-expected US jobs data saw the precious metal regain the previous day’s near-4% loss.<\/p>\n

\u00a0“Gold shot up over $30 as a result,” notes Mitsubishi strategist Jonathan Butler, “as expectations of significant QE tapering were pushed out beyond September.<\/p>\n

\u00a0“If gold successfully clears the $1400 level, the next technical stop is around $1435.”<\/p>\n

\u00a0But “with a lot of analysts calling for tapering to start in September,” reckons broker Marex Spectron, “this will limit the upside [in silver and gold prices].<\/p>\n

\u00a0“If it wasn’t for the Syrian situation, we would be lower.”<\/p>\n

\u00a0Pointing to last week’s peak of 3% in 10-year US Treasury yields, “Gold [had] felt some pressure from rising interest rates,” says Edward Meir, writing for brokers INTL FC Stone.<\/p>\n

\u00a0Thanks to conflicting US data, “Confusion will likely prevent gold from weakening substantially over the course of this week,” he add, “but we suspect that the selling should intensify after the Fed meeting is out of the way.”<\/p>\n

\u00a0“Heightened geopolitical tensions regarding Syria contributed to gold’s recent strength,” agrees Barclays’ analyst Suki Cooper, warning gold investors that “our economists believe [Friday’s US non-farm payrolls] report was sufficient to greenlight a tapering of Fed asset purchases this month.”<\/p>\n

\u00a0Fresh from the G20 summit of developed and emerging-market economies in St.Petersburg, IMF director Christine Lagarde asked the US Fed in comments at the weekend to consider the global impact<\/a> of any tapering of its QE program.<\/p>\n

\u00a0Thanks to pressure on emerging-market currencies, “There is a lack of buyers in the Treasury market,” Bloomberg today quotes a trader at Scotiabank, because emerging-market central banks are selling US bonds “to back up their currencies” on the FX market.<\/p>\n

\u00a0However, “as US yields continue to rise,” notes Japanese trading house Mitsui’s Singapore team, “so too do the servicing costs of the US debt. [Gold] will likely hold above $1350” in the near term.<\/p>\n

\u00a0Alongside a bullish bet on base metals, commodity analysts at US investment bank J.P.Morgan advised clients on Friday to close their “underweight [position] in precious metals” because of “positive momentum, cleaner positions and the impending start to the US debt ceiling negotiations.”<\/p>\n

\u00a0Hedge funds and other professional speculators in the US derivatives market last week grew their bullishness on gold to the highest level since end-March.<\/p>\n

\u00a0The group’s “net long” position of bullish minus bets rose 1.1% to equal 397 tonnes, according to the weekly commitment of traders data<\/a> from US regulator, the CFTC.<\/p>\n

\u00a0That rise came primarily thanks to another drop in the number of bets that gold would fall \u2013 now cut below 40% of July’s multi-decade peak.<\/p>\n

\u00a0Private investors trading gold futures and options meantime grew their net long as a group to the highest level since 16 April \u2013 the spring’s first gold-price crash<\/a>, and the worst two-day drop in 33 years.<\/p>\n

\u00a0Compared to their 5-year average, traders with so-called “unreportable” positions now hold 7.6% more bearish bets on US gold derivatives. Larger speculators on the other hand now hold 37.6% more bearish contracts than their 5-year average.<\/p>\n

\u00a0Even so, “We believe the risks are still skewed to the downside” for gold prices, says a note from Swiss investment bank \u2013 and London market maker \u2013 UBS today, “especially given how much shorts have covered over the past two months.<\/p>\n

\u00a0“There is now ample room for fresh selling should QE-tapering be confirmed.”<\/p>\n

Adrian Ash<\/strong><\/span><\/a><\/p>\n

BullionVault<\/strong><\/span><\/a><\/p>\n

Gold price chart, no delay | Buy gold online<\/strong><\/span><\/a><\/p>\n

 <\/p>\n

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich or Singapore for just 0.5% commission.<\/p>\n

 <\/p>\n

(c) BullionVault 2013<\/p>\n

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events \u2013 and must be verified elsewhere \u2013 should you choose to act on it.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

London Gold Market Report from Adrian Ash BullionVault Mon 9 Sept 08:30 EST The PRICE of GOLD edged $10 per ounce lower Monday morning in what dealers called “dull, thin” trade following Friday’s sharp jump on US jobs data. A surge in Asian share prices \u2013 attributed to Tokyo winning the 2020 Olympics bid, plus … <\/p>\n

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