Gold News

Gold steady in thin trade ahead of busy week for US data

Spot gold prices held steady in thin trade on Monday, opening a quiet session in Europe unchanged at $656.40 per ounce.

Both London and New York remained closed for a long holiday weekend.

Once the spot gold market returns to business on Tuesday, bullion traders face a busy week for crucial data releases.

Rising above £330 per ounce, gold priced in Sterling began the week £5 lower from last Monday.

German and French investors wanting to buy gold now found the metal €3 lower at €487.71.

"Expect the metal to continue to be range bound," advises Monday's note from Standard Bank, "with key breakout points situated at $665 and $648.

"Although sentiment does seem to favor a break to the downside, bargain hunting and physical demand seem to be able to hold the market up."

Overnight in Tokyo the benchmark gold futures contract for delivery in April '08 rose ¥11 per gram today to the equivalent of $662.32 per ounce.

US crude oil contracts dipped below $65 per barrel as oil workers in Nigeria – the world's fourth-largest producer – cancelled a strike.

And the Chinese stock market, already doubled since the start of 2007, rose 2.7% to a fresh all-time high.

Shanghai's benchmark CSI 300 index closed above 4,000 for the first time ever. It has quadrupled since the start of last year.

In the Eurozone, German inflation data for April – forecast to repeat March's 1.9% annually year-on-year – is due early Tuesday, followed by the latest US consumer confidence numbers.

Wednesday brings the latest Fed minutes, with the key jobless claims and non-farm payrolls due Thurs and Fri respectively. (For the big picture, keep reading here...)

"It will be very volatile with a lot of economic numbers," says one US investment officer to Reuters.

"You're going to need four eyeballs because it's going to be a lot to watch."

More than half the 28 professional gold traders surveyed by Bloomberg worldwide forecast that gold may fall for a fourth week running.

But away from the sound and fury of the spot market, longer-term gold investors continue to grow their holdings.

Dubai gold sales last month rose 32% in value from April '06, said the emirate's Gold and Jewelry Group today.

And meantime, gold mining output in Australia – now the world's second-largest producer – failed to grow during the first quarter according to research just released by Surbiton Associates in Melbourne.

Cyclones and heavy rains hurt output, capping total output at 60.3 metric tons between Jan. and April. That was down from 61 tons a year ago.

To learn more about the outlook for gold mining output in 2007 and beyond, click here now...

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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