Precious-metals were generally positive in Asian trade Wednesday with silver registering a small drop in the session as other metals chalked up modest gains as traders awaited data from the U.S. and Europe.
Gold rose $ 2.10 to $ 1,433.90 a troy ounce at 0630 GMT, while silver lost two cents to $ 37.65/oz. Platinum climbed $ 8 to $ 1,772 / oz, while palladium gained $ 3 to $ 765/oz.
The poor showing came against a background of local share markets, which mostly higher on the back of the news of increased production in China, in March, the first of a series of releases from production data during the day.
“Today the power has surprised us all today. After the flat U.S. lead, we thought the risk was clearly the downward heading into today’s session,” said Ben Potter, a strategist at IG Markets in Melbourne. “We thought that participants would be looking to close out positions before the weekend.”
Positive economic news is generally negative for gold, which is most popular as a hedge against economic weakness, although the picture is more mixed for silver, platinum and palladium, which are widely used in the automotive industry.
However, with continuing concern about the unrest in the Middle East, sovereign debt in the eurozone and the nuclear issues in the earthquake-hit Japanese economy, there are strong headwinds for the market optimists.
Gold chalked its 10th consecutive quarter bullish in the three months to March 31, and Barclays Capital estimated a technical note that the metal was likely to post new highs – towards $ 1,500 / oz, while silver could hit $ 44/oz.
A number of important data releases due later in the day, including U.S. March non-farm payroll figures and purchasing managers index for Germany, France, the United Kingdom, Italy and the Eurozone.
The U.S. will also keep its ISM Manufacturing index in the same month, while the EU releases in February unemployment data. Meanwhile speeches by Federal Reserve members William Dudley and Richard Fisher may shed more light on the direction of U.S. monetary policy.
That would be crucial to the prospects of gold as the yellow metal performs best when interest rates are low, and many Fed-watchers have argued that the recent speeches of some Fed members suggested that the U.S. central bank can be moved to the to raise rates sooner than expected and put an early end to its quantitative easing program, which is seen as being pushed down the value of the U.S. dollar and gold prices helped.
Standard Chartered said in a research note that it still expects the first increase in U.S. interest rates is about two years away, putting an end to a policy known as quantitative easing.
“The dominant position on the Fed remains one of the accommodation, the focus on high unemployment. Although this is still the case, we do not expect the Fed funds target rate will increase to Q1-2013. We do not expect QE2 to expand, but the Fed will wait and see that the market effectively the end of the QE-Programme, “he said.
source: onlinewsj
Gold Price: A golden era for the yellow metal
A bull market consistently sets the current economic uncertainty was willing to continue to increase in coming years, although at a slower pace than in recent times. . . Read more »
Attacked Egypt Gas Pipeline
A gas pipeline in the Egyptian Sinai peninsula was attacked Saturday, cutting off supplies to Jordan and Israel. . . Read more »