Precious metals pull back in European morning as the dollar rebounds. Gold price for June delivery slides to 890 (Wednesday's close: 893.5) while benchmark contracts for silver and platinum retreat to 12.63 (Wednesday's close: 12.8) and 1222 (Wednesday's close: 1225), respectively.
The dollar rises to 1.322 against the euro as industrial production in the 16-nation region plummeted by a record -18.4% yoy in February, compared with market expectation of -17.6% and a upwardly revised -16% in January.
Although some ECB members objected to reduce interest rate to below 1%, weak economic data suggested the central bank will need to cut its policy rate again in May as well as to join its counterparts in quantitative easing.
ETF investment in gold and platinum remained robust in March. According to Credit Suisse, a record 455 metric tons have been purchased as of March 2009, compared to 93 metric tons over the same period in 2008. SPDR gold holdings on the NYSE have increased by 31% or 347 metric tons year to date. The research team also projected gold ETF investments will triple that of last year and this should help gold price reach $1000/ oz.
Concerning platinum, ETF investments have risen 39% since the beginning of 2009. As of March, investments in platinum ETFs amounted to 483 K with 101K oz increase just in March. Recently, platinum price has been bid up after ETF Securities has confirmed filing with the SEC to launch platinum and palladium ETFs. Besides ETF Securities, Absa Capital has also planned to launch platinum ETFs in South Africa in 2Q09.
Natural gas price continues to trade narrowly around 6-year-low. As gas has officially entered stock-building season last week, analysts forecast that gas in storage gained 19 bcf to 1693 bcf for the week ended April 10. Weakness in industrial demand together with relatively strong production (despite huge drop in gas rig counts) will continue to weigh on price until there are signs of economic recovery.
Crude oil price edges slightly higher to 49.9 from yesterday's close at 49.25 in European morning as boosted by higher stock markets. Stocks in Asia and Europe rose as Bank of America reported that growth in bad loans has been slowed down. In the UK, FTSE100 Index gains 1.3% as led by the 4% rally in Barclays shares. Other banking stocks, such as Credit Suisse Group and Deutsche Bank, also surge. In Germany and France, DAX Index and CAC 40 Index climbs 1.55 and 2% respectively.