Malaysia Gold Investment

Fears of unrest spreading to other oil-rich nations and the associated inflationary consequences of higher oil prices are keeping investors interested in precious metals. After a brief sell-off overnight on speculation that the turmoil in Libya might be coming to an end, gold and silver rebounded, supported by a relatively weaker dollar. Some physical buying in the dips have helped the metals recover, although in general physical market participants remain net sellers. Rumours of further momentary tightening in China (in the form of currency appreciation) have caused a knee-jerk sell-off this morning. According to our analysis, currency appreciation has the most damaging effect on commodities of the monetary tightening alternatives available to Chinese authorities. We still see only limited scope for China to appreciate its currency without risking a marked erosion of its industrial competitiveness. Therefore, we view credit rationing as the more serious threat to commodity prices. In

We've seen a large jump in inflation expectations since the start of the week on the back of higher oil prices. Since Monday, 1y US breakeven inflation jumped 30 bps, to 2.37%. At the same time, implied real interest rates in the US declined substantially, well into negative territory once again. Given that Inflation until now remained largely absent in the US, and The US Fed doesn't target inflation explicitly, the likelihood of the US raising nominal rates remains small. In fact, the probability the futures market assigns to a rate hike of 25 bps by year-end has declined in recent weeks, from 36.8% at the start of January, to only 25% yesterday. Given that the Fed looks at inflation and employment, we read the decline in probability of a rate hike as concern over growth — much of this comes on the back of a rising oil price. These growth concerns could continue to weigh on industrial metals until crude oil settles down. Putting Middle East risks (which no doubt are supporting

Profit-taking and better-than-expected US Consumer confidence figures pushed Gold lower yesterday. The Conference Board’s consumer confidence measure jumped to 70.4 in February, from a revised 64.8 in January. This encouraged optimism that the US economic recovery might be gathering momentum as households increase spending. Richmond Fed Manufacturing data also pointed to a stronger US economy. This most likely dampened investor enthusiasm for the relative safety of Gold. However, these cautions have been forgotten and it appears as if precious metals are once again headed upward. Continuing tensions in Libya and other parts of the MENA region are keeping investors interested, even thought we’ve seen some exchange-traded fund selling. The outlook remains bullish for today, with the added benefit of a weaker dollar. Although with physical demand generally weaker, key resistance levels could prove hard to break. Gold support is at $1,390 and $1,382. Resistance is at $1,409 and $1,419.

After a strong performance yesterday, precious metals lost momentum in early morning trade. The desire to take profits after the recent highs has proved irresistible for some investors which, coupled with a stronger dollar, has pushed gold and silver below their respective key levels of $1,400 and $33. In the physical market for gold, we have seen selling outpace buying for the first time in four weeks. Reports that China has asked banks to recalculate capital levels might also have raised concerns over global liquidity, dampening demand for precious metals. The concern is that this may result in some banks falling short or much closer to minimum capital adequacy requirements, and consequently a reduction in lending. Should this materialise, it would be bearish for commodities, although base metals could be the hardest hit. Despite the dip in prices, we do not believe that the upward trend has completely run its course. Geopolitical tensions in the MENA region continue to fester, keepi

An escalation of tensions in the MENA region over the weekend has heightened the safe-haven appeal of precious metals. Protests continue in Bahrain, while demonstrations have been met with violence in Libya. Unrest is also beginning to surface in Morocco. Gold managed to reach a 7-week high, while silver rose to its highest level in three decades. Palladium reached a 10-year peak. Adding to investor demand are also concerns over rising inflation in Europe and the emerging markets. While tightening of monetary policy in China was initially met with a knee-jerk reaction to the prospect of reduced global liquidity, it is now the implications that this has for the global inflation outlook that are being focused on. In addition, rising oil prices, on the back of MENA tensions, are further fuelling inflation worries. The strong rally in prices has seen an increase in physical selling of gold. However, the drop-off in buying has been relatively sedate, indicating that physical demand remains

Gold continue to benefit from safe-haven buying as unrest in the MENA region continues to dominate headlines. Silver moved aggressively, posting the best performance among precious metals, as pent-up investor demand was unleashed. Worse-than-expected US jobless claims and leading indicator numbers most likely added to investor demand. Initial jobless claims rose to 410k (consensus: 400k), from a revised 385k previously. The leading indicator pointed to a slowdown in the US recovery growing by only 0.1% m/m in January (consensus: 0.2% m/m), from December’s downwardly revised increase of 0.8% m/m. The expected benign US inflation reading may have dampened the inflation-hedge buying we’ve seen earlier in the week, but this has been more than offset by increased risk aversion pushing investors into the safety of gold and silver. Momentum though is waning, especially after the announcement by Chinese authorities of a 50 bps increase in reserve requirements. While this is bearish for commodi

Upward momentum in gold stalled yesterday, as the release of last month’s FOMC minutes brought into question the Fed’s commitment to its accommodative monetary stance. The report suggested that there had been differences amongst members on whether data pointing to a stronger recovery might warrant a reduction in the planned $600bn monetary stimulus. Nevertheless, the general consensus on the FOMC remains cautiously optimistic and that recent data flow did not change the outlook sufficiently to substantiate a change in QEII plans. Since yesterday’s fall, gold has been pushed higher on global inflationary concerns, and amid fresh geopolitical concerns prompted by allegations that two Iranian warships were heading via the Suez Canal to Syria. The latest news is that this will not be happening, although this highlights the sensitivity of markets to tensions in the MENA region. This should continue to provide for support precious metals. Gold support is at $1,370 and $1,362. Resistance is a

Gold have been buoyed by rising tensions and the threat of political instability spreading across the MENA region. This has dampened appetite for risk and seen renewed safe-haven buying of precious metals. The lower-than-expected print of China’s consumer inflation has also emboldened investors as fears of monetary tightening (and consequently lower global liquidity) have eased. However, we would caution that the threat of monetary conservatism in China is still very real. Yesterday’s new yuan loans data was particularly weak on a seasonally adjusted basis. In addition, producer inflation rose by 6.6% y/y, much more than expected and a sign of mounting pipeline inflationary pressures. As such, we believe that China’s monetary tightening is set to continue and will remain a weight on commodities, although more so for base metals than precious metals. From an inflation-hedge perspective, precious metals received a boost this morning from UK inflation figures. CPI rose to 4% y/y (in line

Precious metals were dealt a blow as safe-haven demand fell away on the news that Egypt’s president, Hosni Mubarak, has stepped down. With equities and equity futures on the up, it seems as if risk appetite is firmly entrenched, leaving little potential for gains in precious metals today. Nevertheless, physical buying should provide support levels. For gold, we find physical interest emerging below $1,360. Gold support is at $1,352 and $1,346. Resistance is at $1,367 and $1,375.

Although trading down for most of yesterday, precious metals made a strong rebound in the afternoon session. The betterthan- expected jobless claims numbers were largely ignored, as risk appetite waned and safe-haven buying resumed. Although activity in China remains muted, there was evidence of strong interest for silver. This contributed to silver’s push above the psychological $30 mark. At these prices though, not much physical demand is forthcoming. Inflation concerns are once again returning to view, as investors anticipate next week’s release of Chinese price data. Expectations are for the upward trend in both consumer and producer inflation to continue (consensus estimates are 6.2% y/y and 5.4% y/y, respectively). China’s recent rate hike is also fuelling these inflation worries. This is providing support for precious metals, especially gold, as investors seek to hedge against rising global prices. The ongoing political instability in Egypt is also contributing to increased inte

Trade in Gold was rather uninteresting yesterday. Bernanke’s testimony to the House Budget Committee did spark some volatility, although ultimately prices ended the day mostly flat. As expected, Bernanke’s statement revealed nothing new about the Fed’s stance on the US economic recovery and its commitment to monetary accommodation. Although risk appetite appears to waning, investment demand for precious metals is not forthcoming. Physical demand too, especially in Asia, remains on the sidelines. With little buying to counter it, a resurgence in the dollar is pulling the complex down, exacerbated by some light profit-taking. Perhaps the lack of interest in China, after the return from holidays, is also contributing to investor unease. While we only expect a pick-up in Chinese trading from Monday, we would caution that there is a risk that this will disappoint. As always US jobless claims data might prompt some price action, with disappointing numbers providing limited lift. Gold support

Gold sustained a fall of $78 (on a fi xing basis) or just over 5% during January under investor liquidation and a build-up of short positions as a result of improving economic confi dence. Extremely strong demand in China and India particularly helped to cushion this fall. This demand is now on the retreat, pointing to the likelihood of further price falls in February. Conditions are likely to be volatile given the frequent shifts in the economic and political environment, with tests of $1,300 a possibility, although we adhere to our medium-term bullish stance.

Trading in gold remains lacklustre, with investors hesitant to commit. While appetite for risk seems to be growing, gains in equities remain modest, indicating that markets remain apprehensive. For now, this uncertainty is preventing a strong sell-off of gold. Some dollar weakness is providing some support, although, given the lack of both investor and physical interest, we don’t expect this to push prices significantly higher. As copper shows signs of weakness, silver has begun to lose momentum. Currently, silver seems to be trading more in line with the rest of the precious metals complex. Gold support is at $1,345 and $1,339. Resistance is at $1,355 and $1,359.

Amid a knee-jerk reaction to the very poor headline non-farm payroll numbers. However, a closer look revealed that bad weather during the survey week had depressed the payroll statistics. In addition, the drop in the unemployment rate to 9%, from 9.4% previously, once again fuelled hopes of a strengthening economy and saw gold prices fall back towards their early-afternoon levels. With the US economic data still pointing towards a general recovery, the easing of tensions in Egypt has contributed to an increase in risk appetite. This has helped support the equity markets, but is also keeping precious metals on the back foot. The notable exception however is silver, which is benefiting from its semi-industrial nature and is looking more towards copper for direction. Copper is trading comfortably above the $10,000 (after touching new highs), on the back of global recovery hopes. Gold support is at $1,343 and $1,337. Resistance is at $1,357 and $1,364.

Gold jumped to two-week highs on week before CNY, buoyed by political unrest in Egypt and comments by Fed Chairman Bernanke.However, technical trading, which might have triggered some short covering, was most likely responsible for the speed and extent of the move in gold. Bernanke acknowledged that economic growth was accelerating and stressed that without a faster decline in US unemployment, the Fed remained unsure of the sustainability of the recovery. His comments allayed fears over any early scaling down of the Fed’s planned $600bn in monetary stimulus. This confirms our view that an increase in global liquidity (though at a slower pace than 2010) leaves room for gold to push higher in 2011. We target $1,500 during Q3:11. For today, expectations that a positive trend in US data flow may continue (with this afternoon’s non-farm payrolls release) are weighing on Gold. Given our bullish view for the year ahead, we would advocate buying on these dips, but warn that further near-term w

Gold and silver managed to shrug off better-than-expected US personal spending data, and regained some ground in Asian trade. Rising tensions in Egypt have fuelled uncertainty and pushed oil prices higher, threatening the global economic recovery. This has seen investors return to the relative safety of precious metals, with some exchange-trade funds seeing a rise in gold holdings after last week’s consistent outflows. With fairly thin trading in Asia though, ahead of Chinese New Year celebrations, gold has not managed to push beyond the $1,350 level, while silver is meeting similar resistance at $28.50. For today, a weaker dollar and continuing turmoil in the Middle East should provide some lift to Gold. However, a strong US ISM manufacturing reading might discourage interest, especially in gold. Analysts are expecting an increase to 58.0 in January. ISM data on prices might be of secondary significance as markets look for signs of inflationary pressures. Gold support is at $1,325 and

Gold shrugged off data showing an acceleration in US economic growth, as investors remained assured that the Fed’s monetary stimulus plans would not be altered. Perhaps the lower-than-expected rise in the GDP price index (0.3% q/q; consensus: 1.6% q/q) reduced worries that rising inflation might force the Fed to curtail stimulus plans. After relatively little activity last week, physical buying has begun to gain momentum supported by comparatively low prices. Investor demand is also picking up as political tensions in Egypt prompt renewed safe-haven interest. News that AngloGold has had to shut down one of its mines after a seismic event could also be lending support to gold. Gold support is at $1,312 and $1,291. Resistance is at $1,352 and $1,369.