Central Bankers Get Tired of Gold as Lower Exports Cut Cash

  • Purchases plunged 40% in second quarter to lowest since 2011
  • Bank’s share of world demand shrank to 9% from 13% last year

The biggest owners of gold are tiring of the metal.

orig_gold and silver

Central banks — holders of about 32,900 metric tons of bullion — cut their purchases by40 percent during the three months through June, compared with the same period a year earlier, to the lowest since 2011, World Gold Council figures compiled by Bloomberg show. It was the third-straight quarterly drop, the longest such streak in at least five years.

Buying declined in 2016 as prices were rallying for their biggest first-half gain in 40 years. Central banks in emerging-market nations have been adding less gold as the amount of cash they get from exports declined, said John Nugee, a manager of Bank of England reserves in the 1990s.

“The flows have slowed dramatically,” said Thorsten Proettel, a commodity analyst at Landesbank Baden-Wuerttemberg in Stuttgart. “This could be a very important factor for the market.”

Central banks have been a bullish influence on gold, especially after the financial crisis, when prices rallied to a record high in 2011. Before then, government bullion reserves had been dropping for almost two decades. But central banks have been net buyers every year since halting the selloff in 2008, and as of June had the biggest hoard in almost 15 years.

The recent slowdown may signal buyers’ fatigue, especially for countries with fewer exports. Through April, global trade in general has fallen to the lowest since 2010, according to the International Monetary Fund, while currency reserves are down almost 8 percent from a peak two years ago, data compiled by Bloomberg show.

A prime example is China, which has amassed the world’s fifth-largest gold reserves as it became the world’s second-largest economy.

NEW FOREX NEWS

Oil Companies Seen Investing $8 Billion to Start Uganda Output

The Oil

Uganda expects three oil companies to invest $8 billion in the East African nation before they start producing oil in 2020, Energy Minister Irene Muloni said.

The government on Tuesday issued production licenses to London-based Tullow Oil Plc and Total SA of France and said that together with Cnooc Ltd., the state-owned Chinese producer, the country expects to pump as much as 230,000 barrels per day of crude.

“The companies are expected to invest over $8 billion in the infrastructure required for all the production licenses,” Muloni said in the capital, Kampala. “This investment will be for the drilling of about 500 wells, construction of central processing facilities and feeder pipelines, among others.”
oil

The companies are expected to make their final investment decisions within 18 months, Muloni said. The licenses will run for 25 years, with the possibility of them being renewed for a further five years, she said.

Forex Trading | News Daily Update |  Analysis Department.

NEW FOREX NEWS

Forex Technical Analysis 30.08.2016

(EUR/USD, GBP/USD, USD/CHF, USD/JPY, AUD/USD, USD/RUB, GOLD)Analysis for August 30th, 2016

EUR USD, “Euro vs US Dollar”

The EUR/USD pair has formed another consolidation range. We think, today the price may break it downwards and then continue falling inside the downtrend as the third wave with the target at 1.1030. Later, in our opinion, the market may be corrected to return to 1.1120 and then form the fifth wave to reach 1.1000.

GBP USD, “Great Britain Pound vs US Dollar”

The GBP/USD pair is forming the first descending structure. We think, today the price may form the second part of this wave with the target at 1.2925. After that, the instrument may be corrected towards 1.3100 and then fall to reach 1.2650.

USD CHF, “US Dollar vs Swiss Franc”

The USD/CHF pair has formed another consolidation range and right now is moving to break it upwards. The main scenario suggests that the price may continue growing to complete the second part of the wave. The target is at 0.9935. Later, in our opinion, the market may be corrected towards 0.9800 and then form the fifth structure with the target at 1.0035.

USD JPY, “US Dollar vs Japanese Yen”

The USD/JPY pair is still being corrected. Possibly, the price may reach 103.50. After that, the instrument may continue falling inside the downtrend to reach 99.66. » Read more

NEW FOREX NEWS

Market Overview for 30.08.2016

The Big Picture:009market

The DAX on Monday retraced initial weakness, ending above the important resistance level of 10500. Chancellor Merkel toured Europe in the last week, meeting with her Estonian, Czech, Polish, Hungarian and Slovakian counterparts. It became apparent, that Angela Merkel is in a very isolated position, regarding her policy towards refugees. Eastern European officials see policy on migration as a national question. There were no signs that these countries will follow Mrs. Merkel´s policy on refugees. The EU is experiencing its largest crisis in its history since the Brexit-Vote. There is no country nor Politician who would be able to carry over Mrs. Merkels lead role, yet Mrs. Merkel has isolated herself in Europe. It will be interesting to see if Eastern European States unconditionally follow her in important decisions, such as the Brexit negotiations with Britain. Collaboration amongst European states is weaker than ever and that in difficult times

DAX

The DAX is in an upward trend. Next resistance is seen at 10860, support at 10500.

Euro / USD

The Euro is trading sideways in a large trend. Support is at 1,0822, resistance at 1,1429. Short term the Euro is in a downward trend.

JPY / USD

Support at 100.31 has held. The Yen is in a downward trend.

» Read more

NEW FOREX NEWS

S&P 500, Dollar Gain as Consumer-Spending Data Bolster Fed Bets

  • Probability of September U.S. rate increase jumps to 42%
  • Japan’s shares lead gains in biggest markets on stimulus bets

THE S&P 500

U.S. stocks traded near a record and the dollar gained after data showing an improvement in consumer spending reinforced bets the Federal Reserve will have room to boost interest rates next month.

Consumer spending advanced for a fourth straight month in July, bolstered by stronger income gains, sending the biggest part of the U.S. economy to a solid third-quarter start, Commerce Department figures showed Monday in Washington. Fed Chair Janet Yellen said Friday in Jackson Hole the case for an increase is getting stronger, while Vice Chairman Stanley Fischer indicated a tightening is possible at the next review. Those comments will sharpen the focus on Friday’s monthly U.S. payrolls report to gauge whether the economy is strong enough to sustain higher borrowing costs.

QUICKTAKEFed Liftoff

“Investors would like to believe that fundamentals improve enough to keep this rally going but share prices are up quite a bit in recent weeks without necessarily strong fundamental support,” said Bruce McCain, who helps oversee $35 billion as chief investment strategist at Key Private Bank in Cleveland. “The Fed seems to see a lot more strength than investors have.”

Stocks

The S&P 500 rose 0.4 percent at 9:53 a.m. in New York.

The Stoxx Europe 600 Index retreated 0.3 percent. A gauge of auto makers posted the biggest decline, while sliding oil prices dragged energy producers lower. The volume of shares changing hands today was 70 percent lower than the 30-day average as U.K. markets were closed for a holiday.

The MSCI Emerging Markets Index fell 0.8 percent as almost two stocks declined for every one that advanced.

Fischer reiterated in an interview on CNBC that the possibility exists for two rate increases this year, starting as soon as September.

“The market has realized that the Fed meant it when it said two hikes are possible this year, repricing the September Fed hike chance,” said Aurelija Augulyte, a strategist at Nordea Markets in Copenhagen. It’s negative for “dollar-financing needs and puts pressure on commodity prices and hence, emerging-market exports,” she said.

Japanese stocks advanced as a weaker yen boosted the outlook for exporters. The Topix index climbed 2 percent as Toyota Motor Corp. and Mazda Motor Corp. jumped at least 3.9 percent.

Currencies

The Bloomberg Dollar Spot Index gained 0.3 percent, after surging 0.8 percent on Friday. The yen fell 0.4 percent, after sliding 1.3 percent in the last session, and the euro fell to a two-week low. The pound weakened 0.5 percent.

Fed policy is seen diverging further from the ECB and the BOJ, Bloomberg surveys show
Fed policy is seen diverging further from the ECB and the BOJ, Bloomberg surveys show

The MSCI Emerging Markets Currency Index fell 0.8 percent, with South Korea’s won sliding 1 percent. Most of the central banks that are tracked by Bloomberg in both Asia and Europe have cut interest rates this year.

South Africa’s rand weakened 1.1 percent, after a 5.9 percent weekly loss. The currency posted its steepest slide of the year last week on concern that a stand-off between South African Finance Minister Pravin Gordhan and the country’s police could lead to Gordhan’s ouster.

Commodities

The Bloomberg Commodity Index, which measures returns on raw materials is down a fourth day, trimming a monthly advance as oil and precious metals fell.

West Texas Intermediate crude slid 1.4 percent to $46.98 a barrel amid doubts producers will agree on a deal to stabilize the market when suppliers meet next month for informal talks. A similar proposal was made in February, but a meeting in April endedwith no final accord.

“The likelihood of them actually agreeing to some kind of production freeze is relatively low,” Daniel Hynes, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney, said in a Bloomberg television interview.

Gold extended its longest losing run since May to a 7th day, falling as much as 0.5 percent after losing 1.5 percent last week. Silver touched the lowest price in almost two months.

Bonds

Germany’s benchmark 10-year bund yield increased as much as four basis points to minus 0.035 percent, before being one basis point higher at minus 0.06 percent. The yield on similar-maturity French bonds was one basis point higher at 0.178 percent, having jumped earlier by four basis points.

Euro-area bonds are also coming under pressure with Spain’s acting Prime Minister Mariano Rajoy set to face a confidence vote Tuesday, and governments set to reissue debt after a summer lull that saw Germany the sole issuer last week. Countries in the region may sell about 30 billion euros ($34 billion) this week, according to Commerzbank AG.

“We treat the market rather defensively over the coming days and weeks” partly due to “heavy supply and Fed repricing,” Ciaran O’Hagan, head of European rates strategy at Societe Generale SA in Paris, wrote in a client note.

The yield on 10-year Treasuries fell three basis point to 1.60 percent, after jumping six basis points to a two-month high in the last session. Fed funds futures showed there is a 65 percent chance that Yellen will raise interest rates by year-end.

Forex Trading | News Daily Update |  Analysis Department.

NEW FOREX NEWS

Gold in Longest Stretch of Declines Since May as Fed Bets Climb

The Gold

Gold dropped for a seventh day, heading for the longest run of declines since May, and silver fell to a two-month low as comments from leading central bankers boosted speculation that U.S. interest rates may rise as soon as next month, buoying the dollar.

Bullion for immediate delivery lost as much as 0.5 percent to $1,314.99 an ounce, the lowest since July 26, and traded at $1,319.73 at 9:12 a.m. in London, according to Bloomberg generic pricing. Silver slumped to the lowest level since June 30.

Gold’s rally this year has been pegged back as a September rate hike is now on the cards after Federal Reserve Chair Janet Yellen said on Friday that the case for tightening had strengthened, while her deputy, Stanley Fischer, said an increase at the Sept. 20-21 meeting was possible. On Saturday, Bank of Japan Governor Haruhiko Kuroda reiterated a pledge to ease policy further if necessary, potentially hurting the yen.

“Fischer clarified that Yellen’s comments were consistent with a potential rate hike in September, and possibly more than one for the year,” Bryan Lum, a Singapore-based strategist with Phillip Futures Pte, said in an e-mail. “Markets took this as a signal to reposition themselves with a more hawkish outlook, which consequently saw gold turn more bearish. ”

The focus this week will be on Friday’s U.S. non-farm payroll numbers, and should the reading again be strong, a further selloff of gold can be expected, Lum said. Fed funds futures as of Friday indicated a 42 percent chance that the Fed will hike as early as next month, up from 22 percent a week earlier. Higher rates tend to hurt bullion while boosting the U.S. currency, which rose as much as 0.2 percent on Monday.

  • Holdings in bullion-backed exchange traded funds lost 1.4 metric tons to 2,032.25 tons on Friday, data compiled by Bloomberg show.
  • Spot silver lost as much as 1.4 percent to $18.3990 an ounce, platinum added 0.1 percent and palladium retreated 0.5 percent.

Forex Trading | News Daily Update |  Analysis Department.

NEW FOREX NEWS

Forex Technical Analysis 29.08.2016

(EUR/USD, GBP/USD, USD/CHF, USD/JPY, AUD/USD, USD/RUB, GOLD)Analysis for August 29th, 2016

EUR USD, “Euro vs US Dollar”

Being influenced by the news, the EUR/USD pair has broken 1.1200 downwards. If fact, the market has resumed falling inside the downtrend to reach 1.0720. At the moment, the instrument is forming the first part of this wave with the target at 1.1100. We think, today the price may reach 1.1110 and then return to 1.1233 to test it from below.

GBP USD, “Great Britain Pound vs US Dollar”

Being influenced by the news, the GBP/USD pair is still falling. We think, today the price may reach 1.3000 and then consolidate and form a reversal pattern. The next target is at 1.2800.

USD CHF, “US Dollar vs Swiss Franc”

Being influenced by the news, the USD/CHF pair has reached the first upside target. Possibly, the price may be corrected towards 0.9660 (an alternative scenario). Taking into account the continuation pattern at 0.9727, the market may extend this structure towards 0.9900 without any correction (the main scenario).

USD JPY, “US Dollar vs Japanese Yen”

Being influenced by the news, the USD/JPY pair is growing. Possibly, the price may be corrected towards 103.55. After that, the instrument may continue falling inside the downtrend to reach 96.00. » Read more

NEW FOREX NEWS

Market Overview for 29.08.2016

The Big Picture:009market

The DAX traded up on Friday, gaining 0.55%.
Janet Yellen, the Chair of the US Fed, during her speech at Jackson Hole, signaled that rates would rise. No schedule for the rise was given. Her reasoning for this action, were the good climate in employment and rising US consumer spending. Concurrently, she also pointed to that further monetary action, will depend on coming economic data. Simply put, she communicated like a politician. Should the next economic data prove good, rates will rise. Should this not be the case, the decision will be postponed. In total, investors were not left any wiser than before the speech. There are opposing view on rates direction amongst the Fed´s board of Governors. In regards to the next Fed meeting in September, The possibility of a rate hike has risen from 20% to 30% on the CME, rising to 60% for December. The USD reacted very positively. This week`s ISM and employment data will be of importance.

DAX

The DAX is in an upward trend. Next resistance is seen at 10860, support at 10500.

Euro / USD

The Euro is trading sideways in a large trend. Support is at 1,0822, resistance at 1,1429. Short term the Euro is in a downward trend.

JPY / USD

Support at 100.31 has held. The Yen is in a downward trend.

» Read more

NEW FOREX NEWS

Open. Market Overview for 26.08.2016

Pre-Market

The Standard & Poor`s 500 Future is trading unchanged. Trading, ahead of Fred President Janet Yellen´s speech is uneventful. The biggest gaining stock in the DAX is Volkswagen, adding +2 %. VW is making progress in regard to their emissions scandal. VW is looking to offer their 650 US dealers compensation, to the amount of 1.2 Billion USD.
oil
The US economy grew less than expected. Lower state expenditure and a bigger drop in inventories could not be countered by higher consumption. Economists were expecting growth for the third quarter. Gold added +0.61% and WTI Oil added 0.21%. We expect an unchanged open on Wall Street

S & P 500

The S&P 500 is in an upward trend. Short term it is trading sideways. Upward resistance is at 2197 and support comes in at 2150.

Nasdaq 100

The Nasdaq 100 is in an upward trend. Short term we see a sideways move. Resistance is at 4837 and support is to be found at 4767.

Forex Trading | News Daily Update | Analysis Department.

NEW FOREX NEWS

The Pound can’t keep its momentum going. Overview for 26.08.2016

The Pound0005uk

It seems to be a good opportunity for the British Pound to strengthen backed by the statistics, but the currency has been going round in circles for the third day is a row.

The British Pound is lacking initiative: three consecutive trading sessions are no different from each other for GBP/USD pair, and intraday numbers, in general, remain stable. The current quote for the instrument is 1.3207.

Today’s statistics indicated that the growth rates of the country’s GDP, according to the revised numbers, are the same as expected. The British economy expanded by 0.6% q/q (+2.2% y/y). The numbers are in complete accordance with the predictions.

All fine and dandy, as the British say, but on June 23rd the United Kingdom held a popular vote relating to the brexit. At that time, only one week was left until the end of the quarter, which was probably quite neutral, and it means that all negative consequences, such as doubts, avoiding risks, and capital outflows, will mostly influence the third quarter. In this light, it is quite possible that the second quarter was the most successful for the British economic system. We’re highly unlikely to see a lot of optimism in the GDP numbers until the end of the year.

The components of the GDP report show that from April to July 2016, business and enterprise investments increased significantly. In the third quarter, this indicator is sure to fall, not plummet, no – the country hasn’t left the Union after all. However, quite often doubts destroy the system much faster than any decisive actions.

Forex Trading | News Daily Update | Analysis Department.

NEW FOREX NEWS

1 2 3 99