Silver Futures Optimistic After Precious Metals Dive

coins-57264_640Thursday saw the precious metals futures dive with gold posting its biggest loss in 13 months, and silver with its 19 month drop. On the Comex division of the New York Mercantile exchange, Gold for April delivery tumbled 2.4 percent, and ended at $1,255.90 an ounce. Silver for March delivery dipped 7.3 percent, closing at $16.77 an ounce. This recent decline for silver marks the lowest it’s been since June 20, 2013.

On the plus side, U.S. Mint bullion sales posted gains of 1,000 ounces in American Gold Eagles and 111,500 ounces in American Silver Eagles. Gold Eagle sales are the highest they’ve been since Jan. 2014, at 81,000 ounces for the month. At 5.4 million, Silver Eagle sales are at their highest since reaching 5,790,000 in October when the U.S. Mint declined to ration the amount they sold.

“The market was expecting the Fed to be more dovish and was disappointed, and it seems that the bulls in gold and silver are exhausted,” Bloomberg News quoted Mike Dragosits, a senior commodity strategist at TD Securities in Toronto. “At the moment, Europe seems calm, and there is really no reason for flight to safety.”

The UAE is scheduled to meet next Thursday at the Almas Towers of the Dubai Multi Commodities Centre for their annual conference. And for precious metals traders and investors, expect the conversations to be in high spirits.

Silver investors are hoping January is a sign of things to come for the marketplace. Though silver prices are still far behind the 1980 high of $50 an ounce, the precious metal is off to its best start since 1983 with prices being up 15 percent these first three weeks of the year. All that being the case, equites are still stuck in a rut.

Silver moves hand in hand with gold prices, and are leveraged to the upside and contrariwise. Gold prices have certainly reaped the benefits of the Swiss National Bank’s decision to de-peg its franc from the euro, surging from $1,220 to $1,305 an ounce. And if this year proves to be good for gold, expect it to be great for silver.

Silver supplies are constrained presently most likely due to slouching copper prices, given that silver is produced mainly as a by-product of copper and zinc mining. So as copper mining slumps, the price of less-available physical silver will go up in accordance.

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Before Fed Statement, Gold Climbs on Slumping Dollar

Federal_ReserveYesterday, Jan. 27th, Gold rose 1 percent while the dollar and shares softened just as the U.S. Federal Reserve policy meeting began. Experts believe this meeting could be the catalyst for U.S. interest rates and the eventual rise.

As the first of two annual meetings for the Fed, investors presume the uncertain global outlook will be the key talking point and expect promises of patience on tightening to be kept. Spot gold was up 1 percent at $1,293.06 an ounce. The precious metal fell 1.6 percent in the following two sessions due in part to strong equities and reservations over the Greek election. Gold also reached a five-month high of $1,306.20 this past Thursday.

February options expired with heavy open interest around $1,275, $1,280 and $1,300 as traders reported U.S. gold futures for delivery in February settling up 1 percent at $1,291.70 an ounce. “February options expiry today is helping gold, also of course the weak dollar, weak politics in (European) areas,” said George Gero, precious metals strategist for RBC Capital markets in New York. Safe-haven buyers returned to the gold market after these recent events combined with the Fed meeting.

On the heels of unfortunate U.S. corporate earnings reports and with declining U.S. durable goods orders, the global stock indexes dropped with the dollar falling 1 percent amidst a bevy of leading currencies. “The FOMC (Federal Reserve’s Federal Open Market Committee) meeting could give a bit of a boost if the Fed acknowledges the global … headwinds and that inflation is not a problem,” says Robin Bhar, a Societe Generale analyst.

The Fed’s timetable is still scheduling a mid-year increase in rates, which would boost the dollar and negatively affect bullion. With an average of $1,234 an ounce on the year, gold is looking at its thirds year of losses. The U.S. on the other hand, is looking at a hike in interest rates for the first time in almost a decade.

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After Greek Vote, Equities Recover as Gold Prices Dip

No 741831On Monday, gold fell roughly 1 percent and had traders cashing in on last week’s gains from the precious metal’s five-month high. This was also just after the snap election on Jan. 25th, where the wider markets based their buying decisions on the Greek anti-austerity party taking office.

Alexis Tsipras and his Syriza party swept the victory on Sunday. The Greek leftist is set to become prime minister of the first Eurozone government outwardly opposed to the bailout conditions given by the EU and International Monetary Fund during the economic crisis. And though Greek stocks fell after news was released of the election, the broader European share market was much steadier.

The focus rests on the bond-buying plan set by the European Central Bank (ECB) last week, and its potentially positive effects. The market saw spot gold drop 1 percent off an early low of $1,275.75 to $1,280.80. U.S. gold futures for February delivery also settled by 1 percent to $1,279.40. Last week’s rise for gold was its best since mid-August, but left the precious metal exposed and vulnerable. “With the event risk out of the way, now that everyone knows what’s going on in Greece, sentiment has calmed somewhat,” says Georgette Boele, and analyst for ABN Amro. “The recovery in sentiment is hurting gold prices somewhat.”

The newly elected Greek prime minister’s pledge to confront global lenders should have ruffled some tail feathers. But the euro and European shares and bonds seemed unaffected, a clear sign of confidence regarding the abilities of the ECB’s new money printing program. The currency rebounded after the election, but not before reaching an 11-year low against the dollar. “We are now seeing profit-taking in the wake of the expected victory of the radical left-wing Syriza party in the Greek parliamentary elections,” said Commerzbank in a recent statement. “Now that the ECB’s bond purchases and the new Greek government, which had buoyed gold prices, have been announced, investors have followed “the old adage of ‘buy the rumor, sell the fact.'”

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