Gold advanced to a record for a second consecutive day as investors bought precious metals to hedge against a weaker dollar and faster inflation. Silver reached a 14-month high and platinum the most in 13 months.
The dollar index, a six-currency gauge of the dollar's value, slumped to the lowest level since August of last year on bets the Federal Reseve will trail other central banks in increasing borrowing costs.
Gold reached US$1,070.80 (Bt35,812) in London, while futures rose to $1,072 in New York as crude oil, used by some investors as an inflation guide, reached a one-year high. Taiwan's central bank said it might consider placing more of its reserves in gold.
"Most of the gold rally has been attributable to a weaker dollar," said Tobias Merath, head of commodity research at Credit Suisse Group in Zurich. "We are in uncharted territory. You still have robust investment flows and we think gold can easily reach $1,100 an ounce" this year, he said.
Immediate-delivery bullion added $1.15, or 0.1 per cent, to $1,065.45 an ounce by mid-morning local time. Spot prices have advanced 21 per cent this year and are heading for a ninth annual gain. December futures were 0.1 per cent higher at $1,066.40 an ounce on the New York Mercantile Exchange's Comex division.
"What's happening it that they are selling out of dollars and buying equities around the world, currencies and of course gold," said Mark Pervan, head of commodity research at ANZ Banking Group. "The dollar is being held hostage to increased rish appetite."
Taiwan may consider buying more gold, its central bank governor Perng Fai-nan told reporters in Taipei yesterday. The news helped boost bullion prices, Credit Suisse said in a note.
The dollar index slipped 0.5 per cent yesterday, taking its loss this year to 7 per cent. Oil futures gained as much as 1.4 per cent to $75.15 a barrel in New York and have soared 68 per cent this year.
"The all-night printing runs at the Treasury are chipping away at the dollar's ability to hold value compared to other currencies and commodities," Mike Sander, in Seattle, said on Tuesday. "With dollar weakness, inflation fears, a huge budget deficit, energy prices creeping up, metals such as gold, silver and copper will be pushed up in price."
US President Barack Obama has increased US marketable debt to a record as he borrows to reignite growth in the world's biggest economy. That's boosted speculation increased money supply will debase the currency and spur inflation.
The Federal Reserve has cut its main interest rate almost to zero and backed asset purchases and credit programmes to combat the recession. Chairman Ben Bernanke is leading plans to buy mortgage-backed securities, federal agency debt and treasuries.
"A weakening US dollar and easy liquidity conditions will mainly favour precious metals, and we expect prices of gold, silver and platinum all to register further gains over the next year," Morgan Stanley analysts said in a report yesterday.
Gold holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, were unchanged for a fourth day at 1,109.31 metric tonnes on Tuesday, according to the company's website. Assets in ETF Securities' exchange-traded products added 0.6 per cent to a record 8.493 million ounces on Tuesday, its website showed.
Silver jumped as much as 1.7 per cent to $18.085 an ounce, the highest since July of last year, and was last at $17.97. Platinum rose to a 13-month high of $1,365.50 an ounce before trading at $1,362 and palladium added 0.6 per cent to $330.60 an ounce.
Saturday, October 17, 2009
Tuesday, October 13, 2009
Short-term correction flagged
Gold experts caution investors to be wary of a short-term correction, even as prices for the precious metal continued to rise yesterday on concerns about the US dollar's depreciation.
Gold prices in Hong Kong were quoted at $1,055 to $1,056 per ounce, up from Monday's close of $1,049 to $1,050. In the local market, buying prices were fixed yesterday at 16,550 baht per bahtweight (15.16 grammes), up 100 baht from Monday, according to the Gold Traders Association.
Satit Wannasilpin, managing director for GT Wealth Management, said gold prices could test $1,150 in the short term as investors sought a hedge against the depreciating US dollar.
Demand for gold from investors in the Middle East seeking an alternative investment to dollar-denominated assets is also driving metal prices upwards.
Mr Satit said many countries have cut back their holdings of US dollar assets in their reserves for fear of further dollar depreciation.
The US dollar now counts for less than 50% of international reserves, compared with an average of 60% five years ago and about 80% earlier this decade,he said.
"Many countries are reducing their USD holdings in their international reserves in exchange for gold. But if the global economy continues to recover,we may see a decline in gold prices on cyclical factors," Mr Satit said.
He said gold was unlikely to fall under $1,000 per ounce in 2010.
Kritcharat Hirunyasiri, president of MTS Gold, said investors should consider taking profits with the runup in prices.
Gold this week should trade between $1,030 and $1,060 per ounce, he said. If prices stand above $1,030 for a week,then technical factors could push prices to test $1,100."In any case, investors who are investing in gold futures should raise their reserves to 100,000 baht per contract from 70,000. The extra 30,000 baht will help serve as a cushion in case prices decline," said Mr Kritcharat.
Gold futures traded on the Thailand Futures Exchange are set for 50 bahtweight of gold per contract. Mr Kritcharat recommended that investors should closely monitor price trends, and revise their strategy if prices fall by more than 300 baht per baht-weight as margin calls could result in a sharp slide in prices.
The Futures Industry Club, meanwhile, has agreed to introduce a new futures contract for 10 baht-weight starting in the first quarter of 2010. Brokers also want to extend trading hours for gold contracts to midnight, resulting in an overlap with New York trading hours.
Gold prices in Hong Kong were quoted at $1,055 to $1,056 per ounce, up from Monday's close of $1,049 to $1,050. In the local market, buying prices were fixed yesterday at 16,550 baht per bahtweight (15.16 grammes), up 100 baht from Monday, according to the Gold Traders Association.
Satit Wannasilpin, managing director for GT Wealth Management, said gold prices could test $1,150 in the short term as investors sought a hedge against the depreciating US dollar.
Demand for gold from investors in the Middle East seeking an alternative investment to dollar-denominated assets is also driving metal prices upwards.
Mr Satit said many countries have cut back their holdings of US dollar assets in their reserves for fear of further dollar depreciation.
The US dollar now counts for less than 50% of international reserves, compared with an average of 60% five years ago and about 80% earlier this decade,he said.
"Many countries are reducing their USD holdings in their international reserves in exchange for gold. But if the global economy continues to recover,we may see a decline in gold prices on cyclical factors," Mr Satit said.
He said gold was unlikely to fall under $1,000 per ounce in 2010.
Kritcharat Hirunyasiri, president of MTS Gold, said investors should consider taking profits with the runup in prices.
Gold this week should trade between $1,030 and $1,060 per ounce, he said. If prices stand above $1,030 for a week,then technical factors could push prices to test $1,100."In any case, investors who are investing in gold futures should raise their reserves to 100,000 baht per contract from 70,000. The extra 30,000 baht will help serve as a cushion in case prices decline," said Mr Kritcharat.
Gold futures traded on the Thailand Futures Exchange are set for 50 bahtweight of gold per contract. Mr Kritcharat recommended that investors should closely monitor price trends, and revise their strategy if prices fall by more than 300 baht per baht-weight as margin calls could result in a sharp slide in prices.
The Futures Industry Club, meanwhile, has agreed to introduce a new futures contract for 10 baht-weight starting in the first quarter of 2010. Brokers also want to extend trading hours for gold contracts to midnight, resulting in an overlap with New York trading hours.
Monday, October 12, 2009
New one baht-weight gold contract could spur trade
The futures industry club will propose a new one baht-weight (15.16 gramme)gold futures contract to help attract retail investors interested in the gold market.
Kampanart Lohachareonvanich, the chairman of the Association of Securities Companies, said that reducing the nominal value of gold futures contracts would help reduce the entry costs for investors and increase trading liquidity on the Thailand Futures Exchange.
The current size of gold futures contracts traded on the TFEX is 50 bahtweight, a size set quite high compared with other derivatives markets worldwide.The contract size was set high in part to placate local gold retailers, who were concerned that the launch of gold futures earlier this year would draw investors away from the physical market in favour of derivatives.
Mr Kampanart noted that in India,contract sizes were only eight grammes,or little more than half of one bahtweight of gold.
He noted that India's futures market also offered currency futures for US dollars and rupees.
The TFEX and the Securities and Exchange Commission also want to introduce currency futures in the local market.But plans have been delayed amid concerns by the Bank of Thailand that such derivatives could be abused to speculate against the baht.
"India is not concerned about speculation because it limits currency futures trading to domestic investors only," Mr Kampanart said."The SEC is considering using the same principle for the Thai market and will propose a plan to the central bank."
He said currency futures would be useful for Thailand given the economy's heavy reliance on international trade.Futures contracts would be a key tool for importers and exporters to hedge against currency risk.
Kampanart Lohachareonvanich, the chairman of the Association of Securities Companies, said that reducing the nominal value of gold futures contracts would help reduce the entry costs for investors and increase trading liquidity on the Thailand Futures Exchange.
The current size of gold futures contracts traded on the TFEX is 50 bahtweight, a size set quite high compared with other derivatives markets worldwide.The contract size was set high in part to placate local gold retailers, who were concerned that the launch of gold futures earlier this year would draw investors away from the physical market in favour of derivatives.
Mr Kampanart noted that in India,contract sizes were only eight grammes,or little more than half of one bahtweight of gold.
He noted that India's futures market also offered currency futures for US dollars and rupees.
The TFEX and the Securities and Exchange Commission also want to introduce currency futures in the local market.But plans have been delayed amid concerns by the Bank of Thailand that such derivatives could be abused to speculate against the baht.
"India is not concerned about speculation because it limits currency futures trading to domestic investors only," Mr Kampanart said."The SEC is considering using the same principle for the Thai market and will propose a plan to the central bank."
He said currency futures would be useful for Thailand given the economy's heavy reliance on international trade.Futures contracts would be a key tool for importers and exporters to hedge against currency risk.
Thursday, October 8, 2009
GOLD "PRIMED TO HIT $2,000"
An expert predicted gold would hit US$2,000 (Bt66,700) per ounce after it climbed to a fresh all time high of $1,058 yesterday as the US dollar's slump prompted investors to buy commodities as a hedge against potential inflation.
Bullion is heading for a ninth annual gain as the US Dollar Index, a six currency gauge of the dollar's value, has shed 6.5 per cent this year. The price of gold hit a fresh record high above $1,058 an ounce here yesterday as the dollar renewed its fall.
Immediate-delivery bullion yesterday advanced as much as $14.28, or 1.4 per cent, to $1,058.48 an ounce and was at $1,054.45 at midmorning in London. December gold futures were 1percent higher at $1,055.10 an ounce on the New York Mercantile Exchange's Comex Division after climbing as high as $1,059.60.
Gold may top $2,000 an ounce in the next decade, said investor Jim Rogers.
"People are printing money, gold is going up," Rogers said, adding that he might increase his holdings.
"There are plenty of reasons to buy gold when the time is right," he said.
"Bullish gold gave support to the price of other commodities, including rubber," said Kazuhiko Saito, chief analyst at Tokyo based broker Fujitomi. Rubber futures gained as much as 2.1 per cent.
Local gold bar prices were quoted at Bt16,450 per baht weight for buying and Bt16,550 for selling, while gold ornaments were quoted at Bt16,206.04 for buying and Bt16,950 for selling.
Kritcharat Hirunyasiri, president of the Mae Thong Suk (MTS) Group and director of the Gold Traders Association, said gold would likely reach US$1,100 an ounce this year after continuously breaking records.
"Most investors have sold gold bars, while only 0.5 per cent of them have bought gold. They wanted to sell for a profit first. If they really want to invest, they must hold it long term. Those wishing to invest short term should instead do so in the derivatives market, which is more volatile," Kritcharat said.
MTS is a brokerage member for gold futures on the Thailand Futures Exchange. The group established MTS Gold Futures for this purpose.
Kritcharat said lately, the derivatives market for gold futures had been very active, with higher trading volume and a new record for daily trading volume: 3,380 contracts, up from 900 a day over the past seven months.
The dollar traded at 1.4762 against the euro late yesterday morning in Singapore, from 1.4691 the day before. It fell earlier this week on concern the US Federal Reserve would be slower to raise interest rates than policymakers in other nations.
Bullion is heading for a ninth annual gain as the US Dollar Index, a six currency gauge of the dollar's value, has shed 6.5 per cent this year. The price of gold hit a fresh record high above $1,058 an ounce here yesterday as the dollar renewed its fall.
Immediate-delivery bullion yesterday advanced as much as $14.28, or 1.4 per cent, to $1,058.48 an ounce and was at $1,054.45 at midmorning in London. December gold futures were 1percent higher at $1,055.10 an ounce on the New York Mercantile Exchange's Comex Division after climbing as high as $1,059.60.
Gold may top $2,000 an ounce in the next decade, said investor Jim Rogers.
"People are printing money, gold is going up," Rogers said, adding that he might increase his holdings.
"There are plenty of reasons to buy gold when the time is right," he said.
"Bullish gold gave support to the price of other commodities, including rubber," said Kazuhiko Saito, chief analyst at Tokyo based broker Fujitomi. Rubber futures gained as much as 2.1 per cent.
Local gold bar prices were quoted at Bt16,450 per baht weight for buying and Bt16,550 for selling, while gold ornaments were quoted at Bt16,206.04 for buying and Bt16,950 for selling.
Kritcharat Hirunyasiri, president of the Mae Thong Suk (MTS) Group and director of the Gold Traders Association, said gold would likely reach US$1,100 an ounce this year after continuously breaking records.
"Most investors have sold gold bars, while only 0.5 per cent of them have bought gold. They wanted to sell for a profit first. If they really want to invest, they must hold it long term. Those wishing to invest short term should instead do so in the derivatives market, which is more volatile," Kritcharat said.
MTS is a brokerage member for gold futures on the Thailand Futures Exchange. The group established MTS Gold Futures for this purpose.
Kritcharat said lately, the derivatives market for gold futures had been very active, with higher trading volume and a new record for daily trading volume: 3,380 contracts, up from 900 a day over the past seven months.
The dollar traded at 1.4762 against the euro late yesterday morning in Singapore, from 1.4691 the day before. It fell earlier this week on concern the US Federal Reserve would be slower to raise interest rates than policymakers in other nations.
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