Edition:
India

Eileen Soreng

PRECIOUS-Gold gains as uncertainty over Trump's response to China spurs demand

29 May 2020

* For an interactive graphic tracking the global coronavirus spread, open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices)

PRECIOUS-Gold pares gains as equities firm; U.S.-China rift lends support

29 May 2020

* U.S. jobless claims total 2.123 million for week ended May 23 * SPDR gold holdings at seven-year peak * For an interactive graphic tracking the global coronavirus spread, open https://tmsnrt.rs/3aIRuz7 in an external browser (New throughout, updates prices, market activity and comments) By Eileen Soreng May 28 Gold pared gains on Thursday, having risen 1% earlier in the session, pressured by an advance in Wall Street, but escalating tensions between the United States and China kept the bullion supported. Spot gold rose 0.2% to $1,712.35 per ounce by 2:21 p.m. EDT (1821 GMT). U.S. gold futures settled up 0.1% at $1,728.30. "U.S. equities have got an underlying bid throughout the entire day," said Phil Streible, chief market strategist at Blue Line Futures in Chicago, adding many investors were liquidating their gold positions for fear of missing out on the equity trade. Wall Street's major indices rose, boosted by gains in healthcare and technology stocks. Gold prices were, however, supported by fresh signs of the economic blow from the coronavirus, as well as brewing U.S.-China tensions with the Trump administration looking at options to punish China over its tightening grip on Hong Kong. "We're seeing tensions increase between U.S. and China... We see the market froth still with this bevy of negative economic data and that's clearly supportive for the gold market," said David Meger, director of metals trading at High Ridge Futures. The latest U.S. unemployment benefits data held above 2 million last week for a 10th straight week, signaling a deeper economic hit from the pandemic. "We've tested the $1,700 and bounced back, so if we look forward the market continues to expect more stimulus from the Federal Reserve and other central banks," said Bart Melek, head of commodity strategies at TD Securities. Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement. Holdings in the SPDR Gold Trust exchange-traded rose to a seven-year high of 1,119.05 tonnes on Wednesday. Elsewhere, palladium rose 0.5% to $1,945.63 per ounce, platinum gained 2% to $835.54 and silver eased 0.1% higher at $17.29. (Reporting by Eileen Soreng in Bengaluru; Editing by David Gregorio and Lisa Shumaker)

PRECIOUS-Gold dips to two-week low on economic recovery hopes

27 May 2020

* U.S. stocks edge higher in choppy trading * Gold to stay supported, average $1,800/oz in Q4 -SocGen * For an interactive graphic tracking the global coronavirus spread, open https://tmsnrt.rs/3aIRuz7 in an external browser (New throughout, updates prices, market activity and comments) By Eileen Soreng May 27 Gold fell on Wednesday to its lowest price in two weeks as the easing of coronavirus restrictions around the world fed optimism that the global economy could rebound. Spot gold eased 0.1% to $1,709.50 per ounce by 1:07 p.m. EDT (1707 GMT). The session low was 1,693.22, its lowest since May 12. U.S. gold futures edged 0.1% higher at $1,707.90. "Stocks are slightly down because of the trade war news that has come up but safe assets are not gaining anything out of it because market sentiment is still up," said Bob Haberkorn, senior market strategist at RJO Futures. "The trade war issue has taken a back seat as the reopening of the economies have boosted optimism and raised investor appetite for riskier assets." Tai Wong, head of base and precious metals derivatives trading at BMO, said: "Gold's dip under $1,715-20 on Tuesday is a technical breakdown and invalidates or pushes back at least the prospect of a strong rally." U.S. stocks were mixed in choppy trading, as technology stocks sold off on worries about Sino-U.S. tensions but some investors optimistic about a broad economic pickup. U.S. President Donald Trump stating Washington was working on a strong response to Beijing's proposed national security laws for Hong Kong. This year, gold has gained over 12% so far, and analysts said the precious metal's overall trajectory was positive, supported by low interest rates and global political and economic uncertainties. "Gold is used efficiently to hedge risks in a low real rates environment as the opportunity cost to hold it is low, we expect such favourable environment to continue," Societe Generale said in a note, forecasting prices to average $1,800 per ounce in the fourth quarter. Elsewhere, palladium fell 1.34% to $1,929.87 an ounce and platinum dipped 0.1% to $829.14, while silver rose 1.04% to $17.28. (Reporting by Eileen Soreng, Arpan Varghese and Diptendu Lahiri in Bengaluru; Editing by Tom Brown and David Gregorio)

PRECIOUS-Gold falls 1% as risk appetite firms on recovery optimism

26 May 2020

* Spot gold hits lowest level in nearly two weeks * S&P 500 tops 3,000 mark * For an interactive graphic tracking the global coronavirus spread, open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices) By Eileen Soreng May 26 Gold fell over 1% on Tuesday as major economies further eased coronavirus-linked restrictions, fuelling hopes for economic recovery and bolstering risk appetite. Spot gold slipped 1.1% to $1,710.95 per ounce by 1:41 p.m. EDT (1741 GMT), having earlier hit a low since May 13 at $1,708.47. U.S. gold futures settled down 1.7% at $1,705.60. "There is a risk-on tone in the market, driving the reversal of (gold's) safe-haven flows," said Daniel Ghali, commodity strategist at TD Securities. U.S. stocks surged as investors grew optimistic about business restarts and a potential coronavirus vaccine. Spain urged foreign tourists to return from July, while Britain will reopen thousands of shopping centres next month. U.S. states were also gradually easing restrictions. "A breakdown below $1,700 could crack open the doors towards $1,680 (for gold)," said FXTM analyst Lukman Otunuga. "Nevertheless, the downside is likely to be cushioned by trade woes, disappointing economic data and growth fears." White House economic adviser Larry Kudlow said President Donald Trump is so "miffed" with Beijing over the novel coronavirus and other matters that the trade deal is not as important to him as it once was. Gold, a safe store of value during political and financial uncertainty, climbed to its highest since October 2012 last week, driven by monetary and fiscal stimulus, recession fears and U.S.-China tensions. "Investment demand will continue to strengthen as the U.S. Federal Reserve's stimulus will remain in place for quite a substantive amount of time," TD Securities' Ghali added. Elsewhere, palladium dropped 1.3% to $1,966.43 per ounce, platinum fell 1.2% to $828.45, while silver dipped 0.5% to $17.12. Mining output in South Africa, the world's biggest producer of platinum and a leading producer of gold, could fall by 8%-10% this year due to the pandemic, according to Roger Baxter, CEO of industry body the Minerals Council. (Reporting by Eileen Soreng in Bengaluru; Editing by Dan Grebler and Bernadette Baum)

PRECIOUS-Gold prices dip on profit-taking in thin trade

25 May 2020

* SPDR Gold Trust holdings rose 0.4% on Friday * Speculators raise gold bullish positions in week to May 19 -CFTC * China's net gold imports via Hong Kong fall 176% in April * For an interactive graphic tracking the global coronavirus spread, open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices) By Eileen Soreng May 25 Gold eased on Monday in holiday-thinned trade as some investors took profits, though lingering U.S.-China tensions and extensive stimulus measures by governments worldwide limited decline. Spot gold fell 0.3% to $1,728.55 per ounce by 1:58 p.m. EDT (1758 GMT). U.S. gold futures fell 0.5% to $1,727.40. Most markets were closed in the United States, Britain and some Asian countries for public holidays. "With all the uncertainties going on in the world and governments injecting money into their economies and interest rates going lower, gold specifically has a good possibility to test new highs sooner than later," said Afshin Nabavi, senior vice president at precious metals trader MKS SA. Profit taking, lack of volume and follow-through on the upside were weighing on gold on Monday, Nabavi added. European shares gained on optimism over easing lockdowns and signs of more stimulus for the euro zone economy. Last week, gold climbed to its highest since October 2012, driven by monetary and fiscal stimulus, recession fears and U.S.-China tensions. Trade war tensions are on the rise, which should continue to support gold prices over the short term, Stephen Innes, chief market strategist at financial services firm AxiCorp, said in a note. Beijing's proposed national security legislation for Hong Kong could lead to U.S. sanctions, White House National Security Adviser Robert O'Brien said on Sunday. China's gold imports via Hong Kong in April plunged 176% to -10.3 tonnes versus the previous month, data showed on Monday. SPDR Gold Trust holdings rose 0.4% to 1,116.71 tonnes on Friday, while speculators increased bullish positions in COMEX gold contracts in the week to May 19. Palladium gained 2.3% to $1,991.50 per ounce, while platinum rose 0.6% to $844.75, and silver rose 0.1% to $17.20. (Reporting by Eileen Soreng in Bengaluru; editing by Jonathan Oatis and Nick Zieminski)

PRECIOUS-Gold firms as escalating U.S.-China tensions bolster demand

22 May 2020

* U.S.-China tensions over Hong Kong unnerve stock markets * Palladium on track for biggest weekly gain since March * Physical gold demand ticks up in Asian hubs * For an interactive graphic tracking the global coronavirus spread, open https://tmsnrt.rs/3aIRuz7 in an external browser (Updates prices) By Eileen Soreng May 22 Gold gained on Friday as intensifying U.S.-China tensions compounded fears of a slow recovery in a global economy already reeling from the coronavirus pandemic. Spot gold rose 0.6% to $1,735.08 per ounce by 1:43 p.m. EDT (1743 GMT), after falling 1.4% on Thursday, and was headed for a small weekly decline. U.S. gold futures settled up 0.8% at $1,735.50. "China's aggressive stance on Hong Kong security could exacerbate already tense relations (with the United States) and a possible confrontation between U.S. warships and Iranian freighters headed for Venezuela are key concerns heading into the long weekend, prompting investor buying," said Tai Wong, head of base and precious metals derivatives trading at BMO. U.S.-China friction came to the fore again over the source of the coronavirus and escalated further with China's proposal to impose security laws on Hong Kong, drawing flak from Washington. The tensions compounded fears of a slower global economic recovery, pressuring equity markets but supporting the U.S. dollar, also considered a safe haven. "Rising trade tensions in the past initially resulted in the USD benefiting primarily from safe haven flows, but escalating tensions on a global basis boosted a flight to safety in both gold and the USD," said Standard Chartered Bank analyst Suki Cooper. "The wider economic and health uncertainty are likely to keep gold prices underpinned. ... Prices are facing technical resistance around $1,765." Heightening economic woes, Beijing dropped its annual growth target for the first time. Gold, considered an insurance during political uncertainty, scaled an over 7-1/2 year peak earlier this week. On the physical side, demand picked up in top Asian hubs as economies eased lockdowns. Elsewhere, palladium fell 3.3% to $1,947.17 per ounce, but was on track for its strongest week since March. Platinum was steady at $832.65 per ounce and silver was 0.6% higher at $17.16. (Reporting by Eileen Soreng in Bengaluru; Editing by Richard Chang and Tom Brown)

PRECIOUS-Gold falls over 1% as investors bank on cash

22 May 2020

(Recasts, adds comments, updates prices) * Dollar index firms, Wall Street slips * Palladium eases off one-month high hit on Wednesday * For an interactive graphic tracking the global coronavirus spread, open https://tmsnrt.rs/3aIRuz7 in an external browser By Eileen Soreng May 21 Gold fell more than 1% on Thursday as investors booked profits from recent rallies and some switched to the safety of cash driven by growing U.S-China trade tensions and doubts about an economic recovery. Spot gold was down 1.5% to $1,722.78 per ounce by 2:49 a.m. EDT (1849 GMT), having earlier fallen to $1,716.44. U.S. gold futures settled 1.7% lower at $1,721.90. "Equities are significantly overbought, a lot of money plowed into the tech industry, so there's a fear trade out there once you start to unwind ... Gold will come under a bit of pressure as people try and raise capital," said Phil Streible, chief market strategist at Blue Line Futures in Chicago. "But it's not a throw the towel in on gold (situation). It's just backing off, that's all." Wall Street's main indexes eased as growing Sino-U.S. tensions and concerns about a recovery from a coronavirus-led economic slump soured sentiment. Wall Street's fear gauge rose 30 points for a brief time during the session. Gold has sometimes moved in tandem with equities this year, especially as sharp sell-offs prompted investors to sell the metal for cash or to cover margin calls. Also weighing on gold was a firmer dollar , which has been a rival safe haven amid rising U.S.-China trade tensions. But the latest slide in gold was also driven by profit-taking after recent strong gains, analysts said, with the metal having soared to its highest since October 2012 at $1,764.55 earlier this week. "However, the enormous amount of monetary stimulus in the system, the need for that to continue for some time and the inflation risk are all bullish for gold in the longer term." OANDA analyst Craig Erlam said. U.S. Federal Reserve policymakers acknowledged the possibility of further support measures if the economic downturn persists. Elsewhere, palladium dropped 3.7% to $2,023.73 an ounce after hitting a one-month high on Wednesday. Platinum shed 2.4% to $830.60 per ounce. Silver slipped 2.7% to $17.03. (Reporting by Eileen Soreng in Bengaluru; Editing by Tom Brown)

Gold falls to 1-week low on hopes of economic recovery

21 May 2020

Gold fell more than 1% on Thursday to a one-week low as hopes for a recovery from economic damage inflicted by coronavirus-induced restrictions dented bullion's safe-haven appeal.

PRECIOUS-Gold firms to over 7-year high as U.S.-China tensions fuel economic worries

16 May 2020

(New throughout, updates prices, market activity and comments) * Gold eyes best week in three * Silver hits $16.71/oz, highest since March 12 * Palladium on track to record seventh straight weekly loss * U.S. retail sales plunge 16.4% in April By Eileen Soreng May 15 Gold jumped more than 1% on Friday to levels last seen in 2012, as renewed U.S.-China trade tensions added to concerns about a deep economic slump due to the coronavirus pandemic. Spot gold rose 0.7% to $1,741.65 per ounce by 2:49 p.m. EDT (1847 GMT). During the session it hit its highest since November 2012 at $1,751.25. Bullion has risen over 2% so far this week. U.S. gold futures settled 0.9% higher at $1,756.30. "While subdued physical demand and central bank buying may have slowed its ascent, there's very little reason to sell gold in a time of unprecedented public largesse and deteriorating relations between the world's economic super powers," said Tai Wong, head of base and precious metals derivatives trading at BMO. Underpinning the damage inflicted by the outbreak was the latest U.S. retail sales data that showed a second straight month of record declines in April. Adding to the bleak economic scenario was renewed friction between the United Sates and China over the outbreak, with President Donald Trump suggesting he could even cut ties with Beijing. "People are reluctant to take risk and the future seems quite uncertain... Gold gives you that sense of protection right now because we're going into this period," said Phil Streible, chief market strategist at Blue Line Futures in Chicago. The novel coronavirus, which has infected over 4.46 million people and killed 301,445, has hammered global economic activity, prompting central banks and governments to unleash massive stimulus measures. Gold tends to benefit from economic stimulus because it is widely viewed as a hedge against inflation and currency debasement. Though many governments have started easing restrictions, the move has rekindled concerns of a second wave of infection. "Given all of this chaos and confusion, it is hardly surprising that gold ETFs are seeing an unchanged high level of buying interest," analysts at Commerzbank said in a note. "If speculators were now to jump on the bandwagon too, gold would rise quickly towards the $1,800 mark." SPDR Gold Trust holdings, the world's largest gold-backed exchange-traded fund, jumped 1.2% to 1,104.72 tonnes on Thursday - its highest in more than seven years. Elsewhere, palladium climbed 1.9% to $1,870.28 per ounce, but was on track to post its seventh straight weekly drop. Platinum rose 3.2% to $792.24 per ounce, having hit a high since March 13 at $796. Silver was 4.3% higher $16.55. It touched a more than two-month peak of $16.71 earlier. (Reporting by Eileen Soreng in Bengaluru; Editing by David Gregorio)

Gold scales one-month peak as U.S.-China friction fuels economic woes

15 May 2020

Gold scaled a one-month peak on Friday en route to its biggest weekly gain in three weeks as renewed U.S.-China trade tensions added to concerns about a deep economic slump during the novel coronavirus pandemic.

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