Malaysia Gold Investment

After a relatively quiet period throughout most of yesterday, Gold rallied in the wake of the FOMC decision and the subsequent press conference given by Fed Chairman Bernanke. As we anticipated, there were no real surprises. The Fed Funds rate remained unchanged and the Fed stated its commitment to QEII, but made it clear that it does not intend to expand monetary stimulus. Bernanke also reiterated the Fed’s view that inflationary pressures from rising commodity prices are temporary, and do not warrant a change in the course of monetary accommodation. He did however, caution that “if inflation persists or if inflation expectations begin to move” that the Fed “would have to respond”. Since the Fed’s announcement was as expected our view on gold remains the same. We still believe that upside towards year-end is a strong possibility, given that real interest rates remain low, government borrowing is high and global liquidity though easing is still growing. However, from a fundamental pers...

Gold are expected to maintain their upward trends in the near-term, with gold advancing toward $1,540 resistance. Support will come from easy monetary policy, a lack of serious spending cuts, and inflows of investment. In our 2011 outlook, we looked for a price range in gold of $1,250-$1,550 for the year, with a peak around mid-year. After the disappointing spending cuts of the Congressional FY11 budget deal secured on Apr 11th, we noted that we were considering raising our forecast upper range based on a lack of spending-cutting credibility by both the President and House Republicans. We didn’t make an increase because we thought that the end of QE2 could still lead to incremental tightening and thus price pressure. However, yesterday’s indication from Fed Chairman Bernanke regarding the maintenance of accommodative monetary policy at least through Sep is more than we can accept and still argue for a potential $1,550 peak. Therefore, we’re incrementally raising our upside objective to...

The Gold market is very quiet and range-bound ahead of the Fed FOMC meeting today. While we expect no surprise in Mr Bernanke’s press conference following the decision. The Fed’s Fund rate is to remain unchanged and indications should be that there will be no further quantitative easing after the current bond purchase program has been completed. Because the Fed is unlikely to embark on further quantitative easing does not change our view on gold. We still believe the metal may find upside support towards year-end. Real interest rates remain exceptionally low and government borrowing high. These tow factors are core to our bullish view on gold. Short term however we would not be surprised to see gold dip lower. We believe fundamentally gold should see a pull-back first before the next move higher. We see value in gold on approach of $1,450. Gold support is at $1,500 and $1,493. Resistance is at $1,516 and $1,525.

Gold will witness an environment today that is nearly as positive as has recently been the case, but we favor taking on a more cautious tone today. The market will look for support from the potential that the Fed leaves monetary policy accommodative at tomorrow’s meeting, ongoing tensions in the Middle East, and to inflows of investment in order to keep the rally in motion. Gold has long-term resistance at $1,540/oz. Opposing pressure will be offered by signs that silver has entered a speculative frenzy due to wide price swings and from yesterday’s 9.2% hike in silver margins by the CME. We had been treating both gold as positive affairs in the last few weeks, but would go neutral in the short-term until the markets settle down a bit. The second focus of the market will be the Fed. An article in yesterday’s WSJ suggested that the Fed is discussing how to raise rates rather than when to raise them. The article was a change from Thursday’s suggestion in the paper that Fed Chairman Bernan...

The environment for Gold trade should remain favorable this week, with a fresh focus on the Fed likely to offer strong support. Gold prices should advance toward $1,540/oz over the next couple weeks, while silver could easily rise toward $50/oz. Support will come from accommodative monetary policy, tensions in the Middle East, a weaker dollar, and signs of investment inflows. First-notice in silver is on Friday and any potential squeezes could keep it buoyed. Thursday’s news regarding Scotia Mocatta’s registered silver inventories could do the same. Moderate pressure will come from overbought conditions and strength in the stock market, but we think these will be fairly minor. We favor trading gold and silver as positive trading affairs, and maintaining our long position in July platinum from $1,740. We’ve been unable on our long gold recommendation for the last week. The focus this week will be on the FOMC meeting on Tuesday and Wednesday, with a policy decision to be communicated on ...

Despite a resurgence in risk appetite (equities are up across the globe and emerging market currencies are strengthening), Gold continue to benefit from steady safe-haven demand. Gold posted another record high, for the fifth consecutive day, while silver pushed to the highest price seen since January 1980, before easing slightly lower. Even PGM, the laggards in recent weeks, have posted some strong gains. The main impetus appears to be concerns over rising inflation, leading investors into Gold as a means of protecting their wealth. Lingering concerns over the Eurozone debt situation (speculation is that the Greek fiscal restructuring might occur as early as this weekend) and the Libyan stalemate are also making for healthy interest in precious metals. Extended dollar weakness (a trade-weighted basis the dollar currently stands at 16-month low) is another factor providing support for the metals. We expect the impetus to remain to the upside today. However, markets are relatively illiq...

Overnight there was little movement in the gold price as bulls found it difficult to break through the $1,500 level. A quiet trading session saw the price confined to a $10 range. Resistance was short lived however with a combination of dollar weakness and fresh buying this morning finally propelling gold above $1,500 during London trade. Fears that the global economic recovery might be in jeopardy, sparked by S&P’s ratings outlook downgrade of the US, have been dispelled by strong corporate earnings results and a steady improvement in US housing data. US Treasury Secretary Geithner’s assurances that the government was making progress towards a deficit-reducing budget might also have emboldened markets. He even ventured so far as to say in a television interview that the US would “absolutely” keep its AAA credit rating. Despite the general sentiment appearing to have shifted to a risk-on stance, precious metals are still managing to gain ground. Part of this can be explained by res...