Gold prices steadied near the $960 mark overnight but the white metals were not so fortunate and recorded further losses. Following yesterday's profit-taking rout, some light bargain hunting was seen in Asian markets and gold received some modest support from a firming crude oil price (back to $100.40 per barrel). OPEC ministers agreed to maintain production levels citing a 'well-supplied' market, but market watchers feel that with US gasoline supplies at a 14-year high and an expected daily drop in demand of 1.5 million barrels in the second quarter, black gold values might well slip to a lower value zone. Background financial news continue to record the on-going sad saga among banks - the latest victim is Credit Agricole, losing $1.3 billion on write-downs.
New York spot gold opened at $965.30 up $1 as participants regrouped and were still seen as expecting the four-digit price to be eventually achieved amid conditions that have pushed the US December misery index up to 9.1 - a two-year high. Silver lost 7 cents to $19.68 and platinum dropped another $53 to $2172.00 despite a UBS forecast for a $2400 price within three months' time.
Palladium fell $22 to $522.00 and noble metal watchers are awaiting the release of plans to address electricity supply issues by South Africa today. The US dollar was marginally higher at 73.71 on the index and was quoted at 1.52 against the euro. ADP reports that private sector jobs fl by 23,000 last month. Overall non-farm payrolls grew by 2,000 positions - a far cry from the 20,000 expected by analysts. On the other hand, fourth-quarter US worker productivity was revised up to 1.9%.
In a show of resolve that the US Fed might wish to take a closer look at before going out and jawboning about growth and inflation concerns, China's Premier Wen Jiabao cited inflation as China's public enemy No.1 and outlined a broad array of measures intended to fight the evils of rising prices. Well, at least growth is something he does not have to worry about. In fact, efforts are being made to bring growth 'down' to around 8% in order to avoid overheating.
Forbes reports that:
The Premier outlined a laundry list of initiatives the government will undertake, including sharply increasing the supply of edible oils, meat and daily necessities; strictly monitoring industrial use of grain and grain exports; setting up a national system to maintain sufficient reserve of staples by adjusting import and export level; tightening government intervention in cases of serial price hikes; launching a national warning system to monitor the agricultural sector; controlling fees for education and medical care; subsidizing low-income groups; curbing rising production costs; and enforcing local government responsibility to stabilize the cost of living.
Look for volatile conditions as markets gear up for tomorrow and Friday's economic data releases and as bulls try to reestablish long positions on the back of same. Recapturing the $975/985 zone would be desirable for them right about...now.
A footnote on an important release of another kind: The CPM Group is releasing its 2008 Gold Yearbook next Tuesday. As many insiders know, this is one of the two Bibles of the trade when it comes to the facts and figures related to supply, demand, central bank activity, investor trading patters, and other relevant data. You now have an opportunity to secure one of these coveted books for yourself, at a bargain pre-release price of only $60 a copy. We will be attending the launch next week and will report on the essentials later during the week.
If you are interested, (and, as a gold bug, you ought to be) got to :
to secure your own copy.
Happy Trading and Happy Reading.