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Will Gold End Above $1,270?

By The Real Asset Company (Jan Skoyles)CommoditiesFeb 09, 2014 01:15AM ET
Will Gold End Above $1,270?
By The Real Asset Company (Jan Skoyles)   |  Feb 09, 2014 01:15AM ET
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It’s Non-Farm Payrolls Data Day today, yay! Another day where analysts and commentators try and guess what the key numbers will be and how the Fed will react.

We’ve been through this enough times together to know that if the number is as predicted, or better than then there will be much speculation/expectation that the FOMC will push on with tapering at the current rate. This is likely to hurt the gold price in the short-term. Jobless data released yesterday did not disappoint.

The SPDR Gold Fund, the world’s largest gold ETF, has not seen any outflows for over a week. Holdings have climbed by 6.59 tons since the end of January to 797.05 metric tons.

Yesterday there was no mention of any further changes to monetary policy by the ECB. This helped the euro climb against the dollar, a positive move for the gold price.

India – no change to duties

India’s Finance Ministry said earlier today that they are not looking to cut the gold import controls. India’s Financial Express reports, ‘”At present, there is no proposal under consideration to reduce the import duty on gold, taking into account the likely impact on the Current Account Deficit,” Minister of State for Finance J D Seelam told the Lok Sabha in a written reply.’

This comes after Sonia Gandhi had called for an end to the restrictions and Finance Minister P Chidambaram said the controls would be reviewed at the end of March.

I wrote earlier this year of the interest surrounding palladium and how the metal may be set up for a good year. Swiss data shows that Russia’s palladium shipments to the country have continued to decline into January, continuing the trend of falling exports since 2011. “Full-year Russian palladium shipments into Switzerland totaled 517.3koz in 2013, similar to 2009-11, albeit more than treble 2012 shipments,’ said Barclays in a note yesterday.

Silver and record demand

Silver continues to be a little super-star, climbing 3.3% this week, its biggest weekly-gain since mid-August. It is clearly tracking gold, but it is likely to making gains in emerging economies where currency wars mean metals are becoming comparatively more expensive.

Gujarat in India, certainly has an appetite for silver. Mineweb reports that silver imports to the region between April 2013 and January 2014 reached over 1,500 tonnes – higher than the last high seen back in 2008.

China makes a comeback

Speaking of big swingers in the physical gold market China returns to the market today after the Lunar holiday. This may impact the price and certainly the sentiment surrounding the gold price. However, it is still the non-farm payrolls data that will provide the next foothold for the gold price.

Will Gold End Above $1,270?

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Will Gold End Above $1,270?

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