PRECIOUS-Gold up on cenbank stimulus hopes, eyes Fed meeting

Mon Apr 29, 2013 5:35pm EDT

* Fed, ECB maintaining easy monetary policies help-traders
    * Outflow continues in gold exchange-traded products
    * China's May Day holiday could remove some physical support
    * Coming up: U.S. Case-Shiller home prices due Tuesday

 (Updates throughout; adds comment, second byline, dateline)
    By Clara Denina  and Frank Tang
    LONDON/NEW YORK, April 29 (Reuters) - Gold was lifted on
Monday by broad gains in commodities and by hopes of further
monetary easing ahead of U.S. and European central-bank policy
meetings this week, but it remains vulnerable to a slowdown in
physical buying and outflows in exchange-traded funds.
    Bullion buying increased after a Friday report, which showed
weaker-than-expected U.S. growth, raised expectations the
Federal Reserve will keep its bond buying at $85 billion a month
for now, while the European Central Bank (ECB) is widely
expected to announce an interest rate cut when it meets on
Thursday, analysts said.
    Bullion has recovered more than half of its $225-per-ounce
loss incurred between April 12 and 16, driven by very strong
physical demand around the world especially in top bullion
consumers China and India.
    However, selling by investors in exchange-traded funds
failed to show any signs of abating as investors, dissatisfied
gold's underperformance, continued to sell the metal.
    "The key question in the near term is whether retail and
jewellery demand can continue to counter exchange-traded product
outflows and the rise in gross shorts," said Suki Cooper,
precious metals strategist at Barclays Capital.
    "We continue to believe ETP outflows remain the key downside
risk in the near term," Cooper said.   
    Spot gold was up 0.8 percent at $1,474.21 an ounce by
4:54 p.m. EDT (2054 GMT).
    U.S. gold futures for June delivery settled up $13.80
at $1,467.40 an ounce, with trading volume at about half of its
30-day average, preliminary Reuters data showed.
    Gains in commodities across the board led by industrial
commodities also boosted gold demand. 
    A recent string of unsatisfactory U.S. economic data should
temper any talk of reducing its bond buying program and support
gold, trader said.
    The Federal Open Market Committee will issue its policy
statement on Wednesday. 

    DISAPPOINTING ETP DEMAND 
    The absence of China, the world's second-largest gold
consumer, which is on holiday until Thursday for May Day
celebrations, was likely to remove significant physical support
from the market, traders said.
    Premiums for gold bars jumped to multi-year highs in Asia
last week because of strong demand from the physical market,
which has led to a shortage of bars, coins and nuggets.
    However, investors in the so called "paper gold" products
such as gold futures and exchange-traded products, have yet to
regain confidence in gold, analysts said. 
    Holdings on the largest gold-backed ETP, the SPDR Gold Trust
, reported an outflow of 7.2 tonnes on Friday, bringing the
total drop to 138.2 tonnes this month.
    According to Reuters data, total outflows across the major
ETFs have reached 354.60 tonnes this year, more
than reversing last year's net rise of 220.20 tonnes.
    Among other precious metals, silver rose 2.2 percent
to $24.51 an ounce. Platinum rose to $1,506.74, up 2.3
percent, while palladium was up 2.8 percent at $696.72 an
ounce.
 4:54 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JUN   1467.40  13.80   0.9  1461.60 1478.30  112,483
 US Silver MAY  24.122  0.364   1.5   23.915  24.550   19,181
 US Plat JUL   1507.40  30.90   2.1  1480.40 1525.80   12,066
 US Pall JUN    699.20  17.25   2.5   678.20  702.80    4,052
                                                               
 Gold          1474.21  11.71   0.8  1462.93 1477.70         
 Silver         24.510  0.530   2.2   24.000  24.580
 Platinum      1506.74  33.74   2.3  1479.43 1522.00
 Palladium      696.72  18.85   2.8   678.00  700.00
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        133,017   234,365   177,445     21.02   -1.24
 US Silver       69,110    75,072    54,692     30.01    4.80
 US Platinum     12,217    16,062    11,918     19.09    0.06
 US Palladium     4,306     5,334     5,120                  
                                                               
    

 (Additional reporting by Lewa Pardomuan in Singapore; Editing
by Anthony Barker and Bob Burgdorfer)
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Comments (1)
MarketPawn wrote:
Please get someone, anyone who has any clue about the Precious Metals market. No mention at all of the massive physical shortage? No mention at all of the record-breaking “premiums” for purchasing physical metals world-wide? No mention at all of the major government mints being out of stock?
There has not been any relationship between paper-currency and metals for over two years. The COMEX might be on the brink of a huge problem.
Where is Reuters quote, interview from the CFTC?

Apr 29, 2013 7:46am EDT  --  Report as abuse
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