Sumita Layek

PRECIOUS-Gold eases after U.S. jobless claims; recession fears cap losses

17 Apr 2020

* Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7 in an external browser

PRECIOUS-Gold dips along with equities, strong dollar weighs

15 Apr 2020

(Updates prices) * U.S. retail sales collapse as virus keeps consumers at home * Commerzbank sees gold reaching $1,800/oz at year's end * Palladium to be under-supplied this year and next -StanChart * Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7 in an external browser By Sumita Layek April 15 Gold prices fell on Wednesday, a day after scaling over seven-year highs, as the dollar firmed and investors booked profits, although concerns of a global recession put a floor under prices. Spot gold fell 0.6% to $1,716.79 per ounce, by 1:52 p.m. (1752 GMT). On Tuesday, prices had jumped as much as 1.9% to their highest since November 2012 at $1,746.50. U.S. gold futures settled down 1.6% at $1,740.20. "Gold has been following equity markets, and equities are selling off. That's causing volatility and along with a stronger U.S. dollar, it's getting folks to adjust their portfolios in response," said Bart Melek, head of commodity strategies at TD Securities. Global stocks fell as oil prices dropped and warnings of the worst global recession since the 1930s underscored the economic damage done by the new coronavirus. The dollar, meanwhile, rebounded on safe haven demand amid growing concerns that the damage to the global economy from the outbreak will be protracted. U.S. retail sales suffered a record drop in March, data showed earlier. "Before gold can really take off and have the big macro and central bank policy measures bring it up to our view of $2,000, there has to be some stability, because anytime there is a need to get cash and liquidity, gold is going to be sideswiped by that," Melek added. Countries and central banks across the world have stepped up measures to combat the global heath crisis, which has infected over 2 million people and killed 131,100. In the latest move to cushion its economy, China cut a key medium-term interest rate to record lows, paving the way for a similar reduction in benchmark loan rates. Despite the decline in prices on Wednesday, Commerzbank analyst Carsten Fritsch believes gold could cost $1,800 per ounce at year's end. "The severe impact of the global lockdown on economies and financial markets, the flood of money released by central banks and governments and the ballooning sovereign debt point to ongoing robust demand for gold as a safe haven and last-resort lifeline." Silver was down 2.9% at $15.36, while platinum was flat at $774.55. Palladium dipped 1.5% to $2,185.85 per ounce. "We continue to expect the palladium market to be undersupplied this year and next year, despite latest industry expectations for auto sales to plummet by at least 14%," Standard Chartered Bank analysts said in a note. (Reporting by Sumita Layek in Bengaluru; Editing by Steve Orlofsky and Marguerita Choy)

PRECIOUS-Gold rallies to 7-1/2-year peak as virus sparks recession fears

14 Apr 2020

* Perfect environment for gold to move above $2,000/oz- strategist

PRECIOUS-Gold shoots over 7-year peak on pandemic-led economic shock

13 Apr 2020

(Recasts, updates prices, adds comment) * U.S. gold futures touch highest since February 2013 * Wall Street's main indexes slip * SPDR Gold holdings rose 0.6% on Thursday * Interactive graphic tracking global spread: open https://tmsnrt.rs/3aIRuz7 in an external browser By Sumita Layek April 13 Gold soared over 1.5% to its highest in more than seven years on Monday, as panicked investors scurried towards the safe-haven metal on fears of coronavirus blow to the global economy and U.S. corporate earnings. Spot gold surpassed the key $1,700 pivot to touch its highest since December 2012 earlier in the session and was last up 1.7% at $1,717.36 an ounce by 1:54 p.m. EDT (1754 GMT). U.S. gold futures settled 0.5% higher at $1,761.40, and hit their highest since February 2013 at $1,769.50. "U.S. equities are having large fluctuations and people that can't stomach these kind of moves are continuing to pile into gold," said Phil Streible, chief market strategist at Blue Line Futures in Chicago. "I still think inflation coming down the road is the biggest reason gold will have an underlying bid." Inflation is regarded as gold-positive, because bullion is seen as a safe store of value when price pressures are rising. Wall Street's main indexes slipped as corporate America launches into what is expected to be a painful quarterly earnings season due to the coronavirus pandemic. The U.S. Federal Reserve on Thursday announced a broad, $2.3 trillion stimulus package to help weather the outbreak. The crisis has forced 16.8 million Americans to file for unemployment benefits since the week ended March 21. European Union finance ministers agreed on Thursday on half-a-trillion euros worth of support for their coronavirus-battered economies but left open the question of how to finance recovery in the bloc headed for a steep recession. The pandemic has infected more than 1.8 million people worldwide and killed 113,849, forcing countries to extend lockdowns and central banks to announce support measures to mitigate the financial toll. "COVID-19's deflationary effect has been a headwind for gold. But this trend should reverse in 2H20 as policy responses by governments and central banks gather traction," UBS analysts said in a note. "Led by Fed easing, we now expect real U.S. interest rates to dip deeper into negative territory and perhaps even test the post-GFC (global financial crisis) lows," UBS said. Lower interest rates also reduce the opportunity cost of holding non-yielding bullion. Indicative of sentiment, holdings in SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 0.6% to 994.19 tonnes on Thursday. Elsewhere, palladium rose 2.5% to $2,227.40 per ounce, while platinum lost 0.4% to $745.21 and silver was flat at $15.32. (Reporting by Sumita Layek in Bengaluru; editing by Jonathan Oatis and Marguerita Choy)

RPT-Asia Rice-Lockdowns and export curbs limit activity in major hubs

10 Apr 2020

BENGALURU, April 9 There was little activity this week in Asia's main rice trading hubs as a coronavirus lockdown in India hampered exports, Vietnam's ban on shipments to ensure it has enough domestic supply continued while Thai rates remained at seven-year highs.

PRECIOUS-Gold hits 1-month peak fuelled by Fed's new stimulus measures

09 Apr 2020

* Interactive graphic tracking the global spread: open https://tmsnrt.rs/3aIRuz7 in an external browser

Asia Rice: Lockdowns and export curbs limit activity in major hubs

09 Apr 2020

BENGALURU There was little activity this week in Asia's main rice trading hubs as a coronavirus lockdown in India hampered exports, Vietnam's ban on shipments to ensure it has enough domestic supply continued while Thai rates remained at seven-year highs.

PRECIOUS-Gold prices hold steady as markets await Fed minutes

08 Apr 2020

(Updates prices) * U.S. Fed's minutes from latest meeting due at 1800 GMT * Wall Street's main indexes open higher * Trump: U.S. might be getting to top of the outbreak 'curve' By Sumita Layek April 8 Gold prices held steady on Wednesday as investors awaited the release of minutes from the U.S. Federal Reserve's policy meeting, which is expected to provide further clues on stimulus measures amid rapid surge in coronavirus cases. Spot gold were little changed at $1,648.43 per ounce by 1:31 p.m. EDT (1730 GMT), having hit a near one-month high on Tuesday at $1,671.40. U.S. gold futures settled flat at $1,684.30. "As countries and federal governments stimulate their economies with helicopter money, stimulus programs - it's a printing press of money supply, which is generally a very favourable environment for gold," said David Meger, director of metals trading at High Ridge Futures. Wall Street stocks rose on hopes that the coronavirus outbreak in the United States was nearing its peak and expectations the Congress will push through more aid for the battered economy. Focus now shifts to minutes of the Fed's latest meeting at 1800 GMT. "Sure, we're all going to be very interested in seeing where the Fed lies on their interest rate path. (But) I think we're more focused on fiscal stimulus plans as opposed to monetary stimulus plans," Meger said. The pandemic has infected more than 1.38 million people across the world and 81,451 have died, according to a Reuters tally. U.S. President Donald Trump said on Tuesday that the United States might be getting to the top of the "curve" of the coronavirus outbreak and reiterated that he wants to get the U.S. economy reopened soon. "The U.S. and Europe are hoping the models suggesting the next week will be the worst, regarding new virus infections, are correct, and that the curve will have then peaked for them," Kitco Metals senior analyst Jim Wyckoff said in a note. "Technically, the gold bulls have the solid overall near-term technical advantage amid a price uptrend in place ... that strongly suggests the path of least resistance for prices will remain sideways to higher for at least the near term and probably longer." Market participants are also eyeing Thursday's meeting of members of the Organization of the Petroleum Exporting Countries and its allies, which could result in further output cuts to shore up oil prices that have tumbled. Elsewhere, palladium rose 0.1% to $2,176.79 an ounce, while platinum fell 1.3% to $724.08. Silver shed 0.7% to $14.89 an ounce, having touched a more than three-week high in the previous session. (Reporting by Sumita Layek in Bengaluru Editing by Marguerita Choy)

PRECIOUS-Gold drops over 1% as virus slowdown hopes boost stock markets

07 Apr 2020

(Updates prices) * U.S. gold futures extend lead over London spot prices * World stock markets register a second day of sharp gains * Gold stocks held in New York vaults jumped 50% since last week By Sumita Layek April 7 Gold prices fell over 1% on Tuesday, retreating from a near one-month high hit earlier in the session, as signs of slowdown in coronavirus cases in major epicenters boosted equity markets, drawing away some of the bullion's safe-haven appeal. Spot gold fell 1% to $1,644.51 an ounce by 1:36 p.m. EDT (1736 GMT), after touching $1,671.40. "What we're seeing in equity markets is more of a stabilization with the peaking (coronavirus) numbers in some U.S. jurisdictions," said Bart Melek, head of commodity strategies at TD Securities. "All that really tells us is that there might be an end game to this, but by no means is the world benign and risk friendly," he said, adding that expectations of more stimulus with lower interest rates for the long term will continue to support gold prices. World stock markets registered a second day of sharp gains on signs of progress against the coronavirus in both Europe and the United States. Eurozone finance ministers are likely to agree on measures worth half a trillion euros for finance recovery, while Japanese Prime Minister Shinzo Abe declared a state of emergency and rolled out a nearly $1 trillion stimulus package to soften the economic blow. Gold prices had risen as much as 3.2% in the previous session. "The underlying reason why we have rallied these past couple days was not only due to the spread widening (between spot and COMEX gold), but also the fact that we are seeing additional measures being touted by central banks," said Saxo Bank analyst Ole Hansen. "They're already talking about the next package in the U.S. to be released after Easter. As long as we see these initiatives combined with the potential for a softer dollar, the upside potential for gold is still there." U.S. gold futures settled 0.6% lower at $1,683.70, but held a lead over London spot prices, signaling market concern that refinery closures and logistics constraints could hamper bullion shipments to the United States to meet contract requirements. Gold stocks held in New York vaults registered with CME Group have jumped almost 50% since the end of last week as the exchange launched a new contract and a price premium since the outbreak encouraged traders to stockpile. Palladium gained 1.9% at $2,195.30 an ounce, platinum rose 0.5% to $738.66 and silver inched up 0.2% to $15. (Reporting by Sumita Layek and Arpan Varghese in Bengaluru Editing by Marguerita Choy and Richard Chang)

PRECIOUS-Gold jumps 2% as virus-led economic toll fuels stimulus measures

06 Apr 2020

(Updates prices) * Japan prepares $990 bln stimulus package to soften economic blow * SPDR Gold holdings hit highest in more than 3 yrs on Friday By Sumita Layek April 6 Gold prices surged over 2% to a more than three-week high on Monday on expectations of global stimulus measures to counter the economic damage caused by the outbreak of the novel coronavirus. Spot gold was up 2.3% at $1,653.35 per ounce by 1:49 p.m. EDT (1749 GMT), having hit its highest level since March 11 at $1,655.69 earlier in the session. U.S. gold futures settled 2.9% higher at $1,693.90. "Physical demand continues to dominate and support gold prices. Massive amounts of stimulus are effectively diluting currencies so gold demand is coming from all directions," said Phil Streible, chief market strategist at Blue Line Futures in Chicago. The U.S. dollar stalled against most currencies but continued its rise versus the Japanese yen as the rate of deaths from coronavirus in Europe slowed while deaths in Japan and elsewhere in Asia accelerated. Japan is to impose a state of emergency in Tokyo and six other prefectures as early as Tuesday to contain the coronavirus, while the government prepares a $990 billion stimulus package to soften the economic blow. The pandemic has infected more than 1,250,000 people around the world, with over 68,400 deaths, according to a Reuters tally. The coronavirus is the European Union's biggest test, German Chancellor Angela Merkel said on Monday, adding that it was important that the bloc emerges strong from the economic crisis unleashed by the pandemic. Governments and central banks around the world have unleashed unprecedented fiscal and monetary stimulus and other support for economies floored by the coronavirus pandemic. "We think the set-up for a multi-year bull market is being cemented as the market is awash with both monetary and fiscal stimulus while rates are at the zero bound," analysts at TD Securities said in a note. "Which suggests investors will continue to seek gold's warm embrace as real global rates become entrenched in negative territory." Reflecting investor sentiment, holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust , rose 0.7% to 978.99 tonnes on Friday - the highest in more than three years. Meanwhile, the enhanced delivery gold futures contract launched by CME Group Inc , enabling delivery of 100-ounce, 400-ounce, or kilo bars, has also started trading. Among other precious metals, autocatalyst palladium was down 1.7% at $2,151.01 per ounce. Platinum gained 1.9% to $734.02 per ounce, while silver climbed 3.3% to $14.86 per ounce, having earlier hit its highest since March 16 at $14.91. (Reporting by Sumita Layek and Eileen Soreng in Bengaluru Editing by Matthew Lewis and Marguerita Choy)

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