Gold Prices Fall Below $1200 as US Data Reverse Jobs Surprise, ETF Flows Defy 'Bullish' Investor Surveys
Thursday, 4/02/2015 15:45
GOLD PRICES fell hard mid-afternoon Thursday in London, dropping back through the $1200 level to head into the long Easter weekend unchanged from last Friday.
Following Wednesday's weaker-than-expected ADP estimate of net US jobs hiring for March, new data today showed the number of claims for jobless benefits falling last week.
March's US trade deficit was 15% smaller than consensus forecasts, while factory orders recorded in February rose 0.2% month-on-month, defying analyst expectations for a drop.
"Gold prices," reckons the commodities team at French investment and bullion bank Natixis, "[had] rallied this week on the back of weak US employment data and rising geopolitical tensions."
Despite "significant progress", no deal was reached today between Iran and Western negotiators over Tehran's nuclear research program, while Saudi air-strikes again failed to push back rebel Houthi forces in neighboring Yemen, where they over-ran the presidential palace in Aden.
Militant al-Shabab gunmen meantime killed 15 people and took more hostage at Garissa university in north-east Kenya.
With offers to sell outweighing demand to buy at the first round of Thursday's
3pm LBMA Gold Price, bullion fell from near 1-week highs at $1206 per ounce below $1198.
On the FX market the Euro currency also fell back from 1-week highs to the Dollar at $1.09, while US Treasury yields rose and US crude oil contracts fell back below $50 per barrel.
Further ahead, market participants "are convinced that precious metal prices will climb," says Germany's Commerzbank today, with "more than half" of its corporate clients and other financial institutions saying they "envisage higher gold prices in a year's time" when polled for its latest survey.
Nearly 40% of London-based investment professionals surveyed in January and February, adds ETF Securities, said they believed that precious metals "
would be the best-performing sector" in 2015 when surveyed at the trust-fund provider's conferences.
Since the survey was taken however, ETF Securities own data show the quantity of gold bullion needed to back its gold trust funds shrinking more than 7% from February's spike to 18-month highs as investors sold out.
US-listed gold ETF products meantime saw$1.5 billion "pulled out" last month, says Bloomberg, "the most since December 2013."
This week has seen the New York-listed
iShares Silver Trust (NYSEArca:SLV) shed another 60 tonnes, taking its holdings down to 10,014 tonnes – some 8% below November's 3-year high.
Silver bullion followed gold prices lower at 3pm London time Thursday, dropping back to $16.73 per ounce to show a 1.3% loss for the week.
Stock markets in Europe and the US will be closed tomorrow for Good Friday, as will London's bullion dealers and electronic trade on the CME's Globex precious metals futures exchange.
Volume in the Shanghai Gold Exchange's international bourse contract today eased back from
Wednesday's near-record level as its price fell $1 per ounce below comparable quotes for delivery in London – heart of the world's wholesale physical trade.
"The onshore SGE [contract] was sitting around $1 over [London] spot," says refiner MKS's trading desk, while Tokyo prices also slipped to a discount.
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