1. Gold clings to gains on softer equities, dollar

Gold clings to gains on softer equities, dollar

Spot gold had eased 0.2 percent to $1,064.16 an ounce by 0039 GMT, but largely retained its 1.4-percent gain from the previous session.

By: | Singapore | Published: December 21, 2015 9:06 AM

 

Gold prices

Gold’s Friday move followed a 2-percent loss in the session prior to that, the metal’s biggest single day loss in five months, as the Federal Reserve raised US interest rates for the first time in nearly a decade. (Reuters photo)

Gold steadied on Monday, retaining sharp gains from the previous trading session, as weakness in the dollar and equities helped the metal recoup some losses from a US interest rate hike last week.

Spot gold had eased 0.2 percent to $1,064.16 an ounce by 0039 GMT, but largely retained its 1.4-percent gain from the previous session.

The metal saw some safe-haven bids on Friday after global equity markets fell sharply as slumping oil prices raised concerns about slower growth, while the dollar slipped against the yen on views the Bank of Japan may not ease policy as much as expected.

Asian share markets got off to a lacklustre start on Monday following a dive on Wall Street, though losses were limited by a general lack of investor interest in a holiday-heavy week.

Gold’s Friday move followed a 2-percent loss in the session prior to that, the metal’s biggest single day loss in five months, as the Federal Reserve raised US interest rates for the first time in nearly a decade.

Concerns that demand for non-interest-paying bullion will take a hit from the rate hike continue to cast a shadow, and will likely limit any rally in gold.

The Fed will raise interest rates again in the next three months, according to two-thirds of economists polled by Reuters, although many say rates won’t rise as quickly next year as policymakers have suggested.

Bullion is still not too from a near-six-year low of $1,047.25 reached last week. The metal could revisit $1,000 for the first time in six years if it breaks below its early December low at $1,045, according to technical analysts.

Speculators built a record bearish bet in COMEX gold in the week leading up to a long-awaited decision from the Fed to hike US interest rates, US Commodity Futures Trading Commission data showed on Friday.

Their bearish stance in bullion surpassed a record set two weeks ago, as they added 7,793 lots to build a net short position of 21,881 lots.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 2.98 percent to 648.92 tonnes on Friday, the first increase in two months.

The total assets had fallen to a seven-year low last week.

 

  1. S
    Stan
    Dec 21, 2015 at 3:00 pm
    "SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 2.98 percent to 648.92 tonnes on Friday, the first increase in two months." This reference is frequently mentioned here but how reliable are GLD's holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loop in their prospectus that states they have no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this backdoor to the fund. Some other red flags I've verified and welcome everyone else to do the same: "Did anyone try calling the GLD hotline at (866) 320 4053 in search of numerical details on GLD's insurance? The prospectus vaguely states "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." When I asked about how much of the gold was insured, the representative proceeded act as if he didn't know and said they were just the "marketing agent" for GLD. What kind of marketing agent would not know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors. I remember there was a well doented visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities."
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