Precious Metals Down – Industrial Metals Up

The precious metals family has no support as predictions of $1000 gold by Goldman and JPMorgan may just be realized. Gold fell at 1139.90 while silver tanked giving up 120 points to trade at 15.293. Platinum fell $1.55 to 1193.00 keeping pace with gold’s decline. Goldman Sachs Group Inc. and ABN Amro NV are among those predicting further losses as the Fed moves to raise interest rates. Gold may end this year at $1,100 and finish 2015 at $800, says ABN analyst Georgette Boele, while Goldman Sachs forecasts a drop to $1,050 by the end of this year. Holdings in the SPDR Gold Trust contracted by 3 metric tons to 732.83 tons yesterday, shrinking for a third day to the lowest level since September 2008.

Gold may decline for a second consecutive year for the first time since 2000 as the U.S. Federal Reserve prepares to raise interest rates, while central banks in Europe and Japan ease monetary policy to boost growth. Data today may show U.S. employers added 235,000 jobs in October, according to a Bloomberg survey. The European Central Bank signaled yesterday it’s ready to intensify stimulus. December central bank meetings could be of great interest. Even the RBA made mention of the possibility of stimulus which send the Aussie to a new low.

The cheapest gold in four years is proving irresistible for shoppers in China and India, where rebounding demand may signal an end to the longest price slump in more than a decade. China supplanted India as the world’s largest buyer last year, when the metal plunged 28 percent. Jewelry and bullion are viewed in both countries as a store of value and are popular as gifts. China’s gold imports from Hong Kong in September were the highest in five months. Indian jewelers are forecasting a surge in fourth-quarter sales.

Gold and silver are set for a volatile session after being offered a brief reprieve in trading on Thursday. Another healthy reading from tonight’s eagerly-awaited US Non-Farm Payrolls report would likely bolster expectations for firmer Fed policy, which in turn could renew pressure on gold and silver.

Industrial metals are suffering due to the strong US dollar, but better than expected US data and promises of stimulus from the Peoples Bank of China, the Bank of Australia and the European Central Bank are all supportive as massive new programs are giving a bump up to implied demand for metals. Copper climbed to 3.029 after hitting a 2014 low earlier this week. Palladium gained almost $2 to trade at 753.50.