Gold Up, Still Set for Biggest Weekly Drop in 4 Months

Gold up, still set for biggest weekly fall in 4 months
Deutsche Bundesbank, Frankfurt am Main/AP
By Clara Denina

LONDON -- Gold rose Friday ahead of a series of speeches by U.S. Federal Reserve officials but was still on track for its biggest weekly fall since November following the Fed's hints of an interest rate hike in the first half of 2015.

Fed officials including Richard Fisher, James Bullard and Narayana Kocherlakota are due to speak later Friday after Fed Chair Janet Yellen surprised markets mid-week by suggesting the possibility of raising interest rates early next year.

Spot gold was up 0.6 percent to $1,336.40 an ounce by 1508 GMT (11:08 a.m. Eastern time), after falling to $1,320.24 on Thursday, its weakest since end-February.

U.S. gold futures gained 0.5 percent to $1,336.80 an ounce.

On Monday bullion briefly touched a six-month high of $1,391.76 on tensions in Ukraine and concerns about growth in China before the focus shifted towards the U.S. monetary stance. It was on course for a 3.1 percent weekly fall.

"After the Fed policy meeting we saw gold fall and touch support around $1,320," MKS SA head of trading Afshin Nabavi said.

"But with tensions again escalating between Russia and the West, the market has become more jumpy because it is not only the macroeconomics driving prices but also the political situation, at least in the short term."

European and U.S. shares edged higher, while the dollar hovered near a three-week high against a basket of major currencies and 10-year U.S. Treasury yields rose above 2.7 percent.

"The main longer-term factors remain expectations for higher yields, higher interest rates and a stronger dollar, which are negative for the metal,"
ABN Amro commodity analyst Georgette Boele said.

Low interest rates, which cut the opportunity cost of holding non-yielding bullion above other assets, had been a key factor driving bullion higher in recent years.

An escalation of U.S. sanctions against Russia over the crisis in Crimea kept investors cautious, giving support to gold, usually seen as an insurance against risk, analysts said.

U.S. President Barack Obama raised the stakes in the East-West confrontation on Thursday by targeting some of Russian President Vladimir Putin's closest long-time political and business allies with personal sanctions.

Physical Buying

The physical sector noted light buying from jewelers, but demand from main consumer China remained slow because of a weak yuan. Premiums for gold bars in Hong Kong were unchanged from last week at $1 an ounce to the spot London prices.

China's yuan fell to a 13-month low on Friday and was set to post its biggest weekly fall after the central bank lowered the midpoint of its permitted trading range, which is seen as a signal of official comfort with the currency's recent losses.

Weakening differentials between 99.99 percent purity gold on the Shanghai Gold Exchange and cash gold discouraged imports.

"Shanghai gold exchange is still at discounts to spot gold, and the market wants to know if the yuan will continue to depreciate," a physical dealer in Hong Kong said.

Gold jewellery exports from India edged up 1 percent in February to $718.36 million from a year earlier, an industry body statement said on Thursday.

In other precious metals, palladium rose 4 percent to $795.00 an ounce, its highest since August 2011, boosted by the launch of two exchange-traded funds in South Africa and increasing sanctions by Western countries on main producer Russia.

Silver rose 0.6 percent to $20.39 an ounce and platinum gained 0.5 percent at $1,435.50 an ounce.

-Additional reporting by Lewa Pardomuan in Singapore.


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13 Comments

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scottee

who will audit and end The Fed? to stop them from manipulating gold prices, stock prices and interest rates? we need to be a country of savers....not spenders and debtors.

March 23 2014 at 9:05 AM Report abuse rate up rate down Reply
alfredschrader

Gold was $850 in 1984. On average you could do better with a 2% savings account.
The play in metals is in owning desert land. Say WHAT ?
Most of the "easy" iron has been mined. What remains is ore rock that has to be crushed, ground, and mag sifted - a process that uses a lot of energy which of recent has become expensive with oil near $100.00 a barrel.
Most of the products you buy today are made from recycled iron which is simply re-smelted.
Iron/steel products tend to rust and disolve away, so this treasure trove of iron is dwindling and the price is increasing.
Unfortunately, if you buy a million dollars worth of iron, it will rust and disolve on you as well.
Unless, you keep it someplace where it doesn't rain - the desert.
Did you know you can buy a new sports car for the value of three freight cars of iron scrap ?

March 22 2014 at 2:33 AM Report abuse +1 rate up rate down Reply
1 reply to alfredschrader's comment
alfredschrader

In 1984 you could buy a frieght car of scrap iron for $400.00 now it's $7,600.00
an increase of 1,900% while gold hasn't even doubled since.

March 22 2014 at 8:13 AM Report abuse +1 rate up rate down Reply
abourge458

When the Earth was molten and forming a few billion years back, heavy metals like iron, gold, platinum,and others pretty much sank. Volcanoes since have spit back a pittance, and meteorites dump a bit too.

If someone ever figures out how to make a gold ******* version of an oil rig that can be sunk maybe a bit more than 20 miles or so,....
( Earth's solid crust is comparable to the PEEL on an apple) There could be more gold and platinum pumped out than we could even store. (Estimated to be a few trillion tons of each) BUT...... It would be so plentiful it's value would be PENNIES TO THE POUND!

Hmmmm, wasn't there a story on TV once about UFOs flying INTO volcanoes? A little mining going on?
The UFOs may have competition though........
A Japanese drilling vessel set a record by drilling more than 6,926 feet (2,111 meters) beneath the seafloor, in 2012.. Baby steps?

March 22 2014 at 12:05 AM Report abuse rate up rate down Reply
1 reply to abourge458's comment
alfredschrader

The Earth wasn't molten, but it was smaller in diameter. The Earth is still forming.
The mantle has become milten because of the pressure.

March 22 2014 at 7:38 AM Report abuse rate up rate down Reply
SPQR

Buy canned beans that have a very long expiration date like 2018. The get 50,000 rounds of ammo and lots of guns. Build a wall around your house and have drones patrol the perimeter.
For myself I am investing in gold cross pens :)

March 21 2014 at 11:30 PM Report abuse rate up rate down Reply
1 reply to SPQR's comment
alfredschrader

Ever open a can of pork and beans and you get one tiny piece of pork ?
If you eat the tiny piece of pork it's yumy, but you want more.
I don't usually give away billion dollar recipes for the same reason KFC doesn't give away Sander's secret chicken recipe and they keep it in a vault, but I've been known to give away a billion dollars and this recipe is one of them:

Slice off a one inch thick piece of pork from a fresh ham (not smoked, the kind with the skin still on). Cut the pork into one inch cubes and brown the cubes in a medium saucepan.
Still gently. As soon as there is liquid, reduce the heat to very low, cover with a tight lid, and slow cook until the pork pieces are tender, about 20 minutes.
Add your 15 ounce can of pork and beans and two heaping teaspoons of sugar.
Heat through gently and stir very gently. Add a pinch of black pepper. Serve.

March 22 2014 at 7:50 AM Report abuse rate up rate down Reply
jwmgrand

They dont want you to own Gold .... just billions in paper stocks to wallpaper you bathroom with...in the event of massive economic distress ...... only Gold will be wanted ...... it will hold its value ....

March 21 2014 at 9:19 PM Report abuse rate up rate down Reply
1 reply to jwmgrand's comment
clwgeorgetownlaw

If the economic distress is truly "massive" then gold will mean nothing. Even if someone wanted your gold then they would just take it from you and leave your corpse behind....The only thing of value will be food, water, shelter, transportation & weapons. Holding a yellow metal is a fool's game.

March 21 2014 at 10:42 PM Report abuse -1 rate up rate down Reply
2 replies to clwgeorgetownlaw's comment
SPQR

Same for food,water etc. They will take it and leave a corpse behind. If it gets that bad then you will be better off dead. Better to hold wine because you can drink it and get buzzed before they kill you !

March 21 2014 at 11:24 PM Report abuse +1 rate up rate down
jwmgrand

I think in the future we will barter with small amounts of gold like we do cash... in 5-10-15 gram amounts ...just like ones, twentys, fifties, and 100s ... the metal will be worth much more that the paper currency ......!

March 22 2014 at 7:43 AM Report abuse rate up rate down
goodgrief61945

In the early 60's, gold was $40 an ounce. Guess I should have bought a few pounds.

March 21 2014 at 2:06 PM Report abuse rate up rate down Reply
1 reply to goodgrief61945's comment
drpmindmender

Except. of course, for the inconvienent fact that you couldn't have bought those few pounds of gold in this country until 1075.

March 21 2014 at 3:43 PM Report abuse rate up rate down Reply