Malaysia Gold Investment

Gold in particular, were buoyed by disappointing US consumer confidence numbers. The Conference Board’s measure fell to 63.4 in March, from a revised 72.0 in the previous month. Given that expectations were already quite low at 65.0, this result proved particularly disheartening. As an indication that the US economy was still fragile (consumption expenditure accounts for 70% of GDP), the consumer confidence figure would ease worries over a premature exit from the Fed’s monetary accommodation. Given the strong positive relationship between global liquidity and precious metals (especially gold), this is supportive of the complex. However, subsequent comments by various Fed members shows that the FOMC might be increasingly polarised on the issue of the timing of monetary tightening. Such uncertainty and increased speculation, could spark a rise in volatility in Gold markets as the QEII deadline of June draws near. Physical buying of gold has been relatively quiet overnight, dampened perha...

Gold once again came under pressure off the back of encouraging US data flow. Personal spending figures for February increased by 0.7% m/m, a better-than-expected result (consensus: 0.5% m/m) and a marked improvement on January’s increase of 0.3% m/m (revised). Pending home sales data also showed an unexpected increase, showing a 2.1% m/m in February. This was particularly encouraging after the 2.8% m/m and 3.2% m/m declines seen in January and December, respectively. The uptick in consumer spending and signs of a strengthening housing market have boosted investor optimism that the US economy is entering a more solid phase of growth. Consequently, the appeal of precious metals as a safe-haven has been diminished. However, over the medium term, global uncertainty (unrest in the MENA region, the Eurozone debt crisis and the prospects for the Japanese economy) remains high and we could see renewed interest in the complex, especially if there are any developments perceived as negative on t...

Last week saw open interest begin to climb after having reached the lowest point for March in the previous week. As of last Friday, gold open interest stood at 1,622 tonnes on COMEX, from 1,609 tonnes the previous Friday. Accompanying this rise in open interest was a modest 0.8% w/w rise in the gold price. Net speculative length also signalled tentative interest in gold, as it too rose from March’s low of the previous week. Rising 15.8 tonnes over the past week, the net speculative position for gold now stands at 676.9 tonnes. The rise was largely due to a removal of 35.5 tonnes in speculative shorts, even though at the same time, speculative longs fell by 19.7 tonnes. Although the increase was modest, it is an encouraging sign that investors are less bearish on gold. Should safe-haven demand remain intact, we could see gold recover from the liquidations seen in the immediate aftermath of the earthquake in Japan. Speculative shorts, currently at 111.2 tonnes, are within touching distan...

Yesterday saw an aggressive bout of speculative selling and profit-taking in afternoon trade. For gold and silver the trigger occurred around the $1,450 and $38 levels. Since then, gold and silver have started to rebound, with silver leading the way. Continued conflict in Libya, growing focus on the European debt crisis and uncertainty surrounding the longer-term impact of the Japanese earthquake should keep investors interested in gold and silver. Poor durable goods out of the US, may also be lending support. Durable goods orders fell 0.9% m/m in February, far short of the 1.2% m/m increase the market expected. Signs that the US economy remains fragile are bullish for precious metals as it alleviates fears over an early reigning in of monetary accommodation. To this end, US Consumer Confidence numbers, out later today, could prompt some reaction. Given that consumer buying remains the engine of the US economy (consumption expenditure accounts for around 70% of GDP), a poor result migh...

Gold yesterday on raised risk aversion, stemming from several developments. A bombing in Jerusalem further raised concerns over political stability and the possibility of further turmoil in the MENA region. The rejection of austerity measures by the Portuguese parliament has once again brought the Eurozone sovereign debt crisis into the spotlight. In addition, sentiment has been soured further by speculation that Moody’s will downgrade Spanish banks. The threat of financial contagion throughout the Eurozone is continuing to encourage interest in precious metals as a safe-haven. Not much is expected, in terms of a comprehensive package to address the debt crisis from the EU Summit starting today. For the most part, the rally in gold and silver continues, with silver leading the way on approach of new highs. Gold support is at $1,430 and $1,420. Resistance is at $1,446 and $1,451.

COMEX gold has seen the net long non-commercial position decline to 27.96% of OI, down from 30.5% the previous week. Current levels are below the average level of 33% over the past 2 months. We believe that gold could touch $1,500. At this stage, we target $1,500 in Q3:11, as in the interim we foresee seasonal weakness in the physical gold market. The end of Q1 and Q2 typically see gold scrap volumes increase, which is likely to subdue the gold price. The Gold support is at $1,406 and $1,393. Resistance is at $1,436 and $1,458.

Gold is finding resistance on approach of $1,430. While this may continue for some time, and we do not discount a correction towards $1,380, we still believe that gold will touch new highs in 2011. As pointed out on in Commodities Daily of 25 Feb 2011, apart from heightened risk aversion due to the political tensions in the Middle East, the rise in crude oil is resulting in secondary developments which we believe are adding further support to gold. Also, real interest rates have been dropping like a stone again. Currently, the US 5 year inflation linked bond yield is at its lowest level since at least 2004. The decline in real interest rates is the result of a rapid increase in inflation expectations in recent days, while nominal interest rates remain largely unchanged. As pointed out in Commodities Daily yesterday, given that inflation has been largely absent in the US, and the US Fed doesn't target inflation explicitly, the likelihood of the US raising nominal rates remains small...

Gold rebounded briefly yesterday off light physical interest and investor bargain-buying. However, with the open of New York markets, investor confidence faded and selling ensued. This liquidation gained momentum overnight ahead of the Asian market open, as investors grew anxious about a repeat of the previous day’s massive sell-off on TOCOM. In addition, sales of gold and silver were mostly likely worsened by the need to cover losses on equities and other commodities. Asian trade began with initial bout of good buying of gold and silver, and even a light uptake of PGMs, however sentiment once again soured as the Nikkei initially plummeted 4%. Equities subsequently recovered bringing the Nikkei to close down by only 1.4%. Gold mirrored the rebound in equities, and the momentum as continued into this morning’s trading session. Buying interest remains relatively strong, although PGMs remain vulnerable to liquidation. Developments in the nuclear crisis in Japan will have a significant inf...

Financial markets across the globe remain focused on Japan. Problems at the Fukushima nuclear plant are keeping Japan in the headlines and raising uncertainty about the extent of the damage to this economy and, more specifically, the manufacturing sector. As highlighted yesterday, among the precious metals, PGMs have borne the brunt of this uncertainty and the prolonged disruption to Japanese manufacturing. Nevertheless, the liquidation of positions by Japanese investors has also affected gold and silver, with the selling spilling over into the European and US markets yesterday. Overnight, along with a rebound in Nikkei stocks, the sell-off of precious metals seems to have abated (although platinum and palladium still look vulnerable). As is the case for equities, it would appear that investors consider yesterday’s sell-off as overdone and are cautiously re-entering the precious metals market. This, together with a weaker dollar and some interest from the physical market, could see som...

Global markets are fixated on Japan. Equity markets are under pressure following the plummet in the Nikkei this morning. We saw not only selling of equities, but also panic-selling of gold, silver, platinum and palladium in Japan today. The behaviour of the bond market in Japan and the US indicates that Friday’s disaster in Japan will be negative for economic growth. Both markets saw a decline in bond yields which is consistent with higher risk aversion and lower growth expectations. A slump in growth in the world’s third-largest economy may have a substantial impact on the outlook for global monetary policy. It may move monetary tightening into the future. If so, it would be bullish for especially gold. In the physical gold market, there is buying interest on approach of $1,400 since Thursday last week. However, our view remains that resistance is great when gold approach $1,430. Gold break below $1,400, we would look at $1,370 as the next major support level.

Gold and silver are benefiting from a renewed flight to safety in the wake of the earthquake in Japan. Ongoing unrest in the MENA region is also contributing to uneasy investor interest. Over the next few weeks, further support could come from a weaker dollar, as Japanese financial institutions are forced to repatriate funds through the sale of dollar-denominated assets, in order to pay out insurance claims and rebuild the Japanese economy. New yuan loans eased substantially in February, and although this slowdown is partly seasonal it does indicate continued monetary tightening in China. This caused some price weakness in gold and silver, although this proved temporary, given the elevated levels of risk aversion. Gold support is at $1,410 and $1,397. Resistance is at $1,430 and $1,437.

As anticipated, Gold are rebounding after several days of profit-taking and lacklustre investor demand. Once again, it is the demand for safety that is driving the buying of Gold, as geopolitical tensions in the MENA region escalate and spread. Gaddafi forces have resumed air strikes on opposition forces in key oil centres along the Libyan coastline. The threat of political instability spreading to Saudi Arabia (the world’s largest exporter) has been raised by calls for today to be a “Day of Rage”. We believe that the risk of significant political turmoil in Saudi Arabia remains low. Nevertheless, the markets are anxious. The recent downgrade of Spain’s sovereign credit rating has seen market fears surrounding the Eurozone debt crisis resurface. This is most likely also contributing to renewed interest in the safe-haven appeal of Gold. The earthquake in Japan and yesterday’s disappointing US jobless claim numbers could also be contributing to the markets unease, adding to support for G...

Some profit-taking by short-term investors continues to weigh on Gold. Nevertheless, light buying is evident on dips (especially in gold) which is keeping prices in a relatively tight range. With no news on developments in the MENA region most investors are waiting on the sidelines. There has been no change in physical market activity, which remains lacklustre even though prices have moved lower. However, given the poor performance in equities across the globe, it is safe to assume that risk aversion is still in play. As such, we still see the potential for upside in precious metals (especially gold and silver) as long as the situation in Libya remains unresolved. Gold support is at $1,424 and $1,417. Resistance is at $1,439 and $1,445

Despite ongoing unrest in Libya, appetite for risk appears to be making a tentative reappearance. In addition, the possibility that OPEC might increase output has tempered the rally in oil prices, easing concerns over rising global inflation. The factors have seen investor interest in precious metals dwindle, pushing the complex marginally lower. Physical buying remains on the sidelines, which is also weighing on gold and silver. However, we maintain that this dip is temporary and that the potential for more upside exists as long as the conflict in Libya remains unresolved and as the political upheaval spreads to other oilproducing countries in the MENA region. Gold support is at $1,424 and $1,417. Resistance is at $1,439 and $1,445.

While the political turmoil in the MENA region is inflating investment demand for gold, physical demand for the metal has been lacklustre. The rise in investment demand is evident in the increase in the net long non-commercial gold position in the physical market over the past 4 weeks, but also in the steady rise in gold ETF holdings since the start of February. However, the physical market is in a seasonally weak period. With gold approaching $1,440, we see physical selling consistently outpacing physical buying. The intensity of selling activity as a result of resistance to a higher gold price, is not yet as strong as the same period in 2009 and 2010. The main difference between now and the two previous years, is buying interest continues to appear on dips at the moment (currently dips towards $1,400), which is offsetting some of the selling pressure. The move in the physical market, from providing support in January and early February, to providing resistance, is evident in our Stan...

Gold and silver benefited from a resurgence in risk aversion and inflationary fears, as the conflict in Libya intensified. Gold touched an all-time high, while silver reached a 31-year peak. With nothing much in terms of data flow today, precious metals markets should continue to take direction from developments in the MENA region. The prospect of an easing off of tensions dim, at best, gold and silver should continue to enjoy support from safe-haven buying and inflation-hedge demand. Gold support is at $1,423 and $1,409. Resistance is at $1,442 and $1,447.

Ongoing speculation that the conflict in Libya might come to an end weighed heavily on precious metals in yesterday’s trade. This pressure has since faded on news of renewed attacks by Gaddafi forces and the outright rejection by opposition leaders of mediation offers from Venezuelan President, Chavez and the Arab league. With oil prices once again tracking higher, precious metals should follow suit on both safe-haven demand and inflation hedging. As always, developments on this front will be key to the day’s move. Adding to yesterday’s downward momentum, was ECB President Trichet’s hawkish remarks which raised fears of dwindling global liquidity. We believe that these fears are unwarranted, and forecast that the global liquidity will continue to grow this year, albeit at a slower pace, but still sufficient enough to provide support to precious metals, especially gold. Also in the spotlight will be today’s release of US nonfarm payrolls data, although it is unlikely that this could tak...

For the most part New York and Asian trade was not particularly interesting. Gold did manage to post a record high of $1,440 as oil prices moved higher, but was unable to hold onto these gains. For silver, the $35.00 mark remained an impenetrable resistance level. Some profit taking and position squaring saw some dips, but otherwise trade was mostly sideways. Earlier this morning, however, news of a possible end to the crisis in Libya has quelled investor demand for precious metals prompting a sharp fall in prices. With no firm statements or commitment from the conflicting parties in Libya, gold and silver have since rebounded but remain on the back foot. Developments on this front should be closely watched as any announcements could spark another sell-off. Gold support is at $1,425 and $1,420. Resistance is at $1,439 and $1,446.

Risk aversion and fears over global inflation came firmly back into focus yesterday, as the turmoil in Libya intensified and reports of unrest in other oil-producing nations surfaced. US officials have warned of an impending and protracted civil war in Libya as it moves military assets to the region. This has spurred a renewed flight, from higher-yielding assets, into the safety of precious metals. In addition, the associated strength in oil prices is not only fuelling concerns over rising inflation, but investors are also pondering the threat higher energy prices might pose towards the global economic recovery. Bernanke downplayed inflation concerns in his testimony to the US Senate yesterday. He stated that the recent surge in commodity prices would only result in a “temporary and relatively modest” increase in inflation. He reiterated the Fed’s commitment to the current accommodative monetary stance, and while he did not specifically mention plans post QEII, his view of limited infl...

Although the political turmoil in Libya remains unresolved, it would appear that markets have grown weary of this story and that investors are tentatively regaining some appetite for risk. US equities posted modest gains yesterday, and Asian stock indices ended in the black. European equities are following the trend and US equity futures point to further upside today. This cautious enthusiasm for risk is dampening investor interest in precious metals, although there remains sufficient support to avoid a sell-off. With oil prices relatively subdued, and price data flow out the US and Eurozone coming out largely in line with expectations, the threat of rising global inflation has also taken a back seat for now. This has withdrawn the inflation-hedge demand for precious metals we’ve seen over the past few days. Nevertheless, this afternoon’s testimony by Fed Chairman Bernanke will attract interest as investors look to hear the Fed’s views on the oil price and its impact on the inflation...

Gold continued to rally on Monday as investors attempted to hedge themselves against the fallout of the growing MENA tensions. In Asian overnight trade, the start of the week saw an extension of precious metal gains, although trading volumes were relatively low. Markets have shrugged off talk of social unrest in China, after Premier Wen pledged to root out corruption and ensure a more equitable distribution of the gains of economic expansion. Even comments that the annual economic growth target would be lowered to 7% failed to discourage investors in Chinese equities. However, this should be a negative for the commodities complex, although more so for the base metals. For today, headlines in the MENA region should continue to influence investor participation in precious metal markets. However, US income and spending data, if particularly encouraging might dampen investor interest. The US consumption expenditure deflator will also be watched closely for emerging signs of inflation. A sh...