Gold Breaks 2014 High

Gold is trading at 1305.40 this morning gaining $5.30 in the Asian session as traders took advantage of the weak dollar to buy up the commodity. Risk aversion slightly pushed the shiny metal giving it the momentum to break the all-important 1300 resistance level. Global gold extended gains to hit its highest in a month after a surprisingly weak U.S. retail sales and unemployment release stoked expectations that the Reserve could temper the pace of its stimulus wind-down.

Chinese data over the past few days has controlled the market of late, with Chinese trade balance printing well above expectations and this morning Chinese inflation printed within forecasts. In China, the biggest physical market for gold, demand has picked up since the beginning of the month in the buildup to the Lunar New Year, when the metal is bought for good fortune and given as gifts. As traders returned last Friday from their holiday, buyers have continued to purchase gold in frenzy. The U.S. Mint said it sold 3,180,500 ounces of 2014 American Eagle silver investment coins, the first day of sale for such coins, representing nearly 90 percent of the Mint’s weekly allocation limit of 3,575,000 ounces.

 

Silver climbed 345 points as it continues on its roller coaster ride, moving well within its $20 range but gain and losing on dramatic levels each day. Silver is trading at 20.740. Silver climbed to its highest since November and was poised to post its second straight weekly gain. ell above expectations and this morning Chinese inflation printed within forecasts. In China, the biggest physical market for gold, demand has picked up since the beginning of the month in the buildup to the Lunar New Year, when the metal is bought for good fortune and given as gifts. As traders returned last Friday from their holiday, buyers have continued to purchase gold in frenzy. The U.S. Mint said it sold 3,180,500 ounces of 2014 American Eagle silver investment coins, the first day of sale for such coins, representing nearly 90 percent of the Mint’s weekly allocation limit of 3,575,000 ounces.

Gold appears to be regaining favor with investors, rallying 5 percent over the past two weeks, and gains look set to continue in the near term driven by a strong technical picture, according to ANZ. Gold held above $1,300 on Friday and looked set to post its biggest weekly gain since October as U.S. data raised concerns about the outlook for economic growth. In addition to technical factors, sentiment among long and short-term investors appears to be turning more positive, he said.

Speculators have covered short positions, pushing the net longs in Commodity Exchange (Comex) to a three-month high while gold holdings in physically-backed ETFs are increasing. gold holdings in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, said its holdings rose 7.50 tons to 806.35 tons on Thursday – its biggest inflow since late December. One key factor that may determine the sustainability of the rally, however, is whether Chinese physical demand will wane with higher gold prices. There could be selling due to the rally above $1,300 as investors try to take profits. There is not much upside beyond $1,350. Traders would be sellers as markets move beyond $1,320.

Base metals and industrial metals are trading in a fairly tight range after the disappointing data as traders are unsure how the lackluster US data will affect metal demand. Copper is trading at 3.248 flat this morning. Market sentiment dampened after US retail sales fell unexpectedly in January and more Americans filed for jobless benefits last week,” an analyst in Beijing said. The Commerce Department said on Thursday February 13 that retail sales fell 0.4%.