Forbes: Analysts Expect Central Banks To Add To Gold Reserves Despite Turkey's Decline

News that nine central banks are selling some of their gold reserves is not expected to hurt gold prices, according to analysts.

According to monthly data released Thursday by the International Monetary Fund, Turkey, Germany, Suriname, Guatemala, Mexico, Zimbabwe, Costa Rica, Czech Republic and Denmark all sold some of their reserves. At the same time for the ninth straight month, Russia added to its reserves along with Ukraine, Azerbaijan, Kazakhstan, Kyrgyzstan, Greece, Belarus and Bulgaria.

Colin Cieszynski, senior market analyst at CMC Markets Canada, said he is not surprised that some banks are selling some gold, but added that he doesn’t expect the sales to impact global markets.

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Forbes: METALS OUTLOOK: Gold Traders' Full Plate Next Week Includes FOMC, U.S. GDP, Payrolls, ECB

Gold Traders and investors in other markets have a full economic calendar to monitor next week.

“There’s no shortage of potential market movers,” said Nomura, listing a meeting of the Federal Open Market Committee, July U.S. employment report and second-quarter gross domestic product. On top of that, the Institute for Supply Management releases its manufacturing report, and the European Central Bank and Bank of England hold policy meetings.

In particular, market participants will be watching U.S. data and a policy statement after the FOMC for more signs on when tapering of quantitative easing might start, and the impact of this on Treasury yields.

“They (gold traders) will be keying off interest rates and the dollar,” said George Gero, vice president and precious-metals strategist with RBC Capital Markets Global Futures.

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Forbes: Bernanke Tells Congress: I Don't Really Understand Gold

While Ron Paul is no longer part of the Congressional committees that grill Ben Bernanke twice a year, the Fed Chairman was forced to answer questions about gold on Thursday again. Asked about the falling price of gold, which is down nearly 25% this year, Bernanke admitted he doesn’t understand the yellow metal.

“No one really understands gold prices,” Bernanke told the Senate Banking Committee, adding he doesn’t portend to either.

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Forbes: Technical Trading: Gold Bulls Eye $1,300, 'Green Light' Level For Another Rally Leg

While gold prices firmed overnight in Asia and European action, pre-New York trading has seen August Comex gold futures erase gains and push to slightly weaker levels, on the heels of a stronger U.S. dollar index.

August gold futures have posted a solid near term rally in recent days, climbing from the June 28 low at $1,179.40 to $1,297.20 on Thursday. The minor uptrend pattern is bullish.

But, for now, the bulls are being turned away by a stiff psychological resistance ceiling at $1,300—and that will remain the key near term zone for traders to monitor.

So-called “round-numbers” like $1,300 often act as both magnets for price action and also resistance. Also, the contract marked out minor congestive resistance on June 21 and 24, with daily highs right around $1,300.

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Forbes: Steve Forbes Talks Gold on Kitco News

The fact that gold is now seen as an investment vehicle reflects the poor state of the U.S. global economy said Steve Forbes, publishing magnate and chief executive officer of Forbes Magazine.

Forbes was one of the keynote speakers at FreedomFest, an annual convention that looks to gather free minds for open discussions on politics and the economy. In an interview with Kitco News’ Daniela Cambone, Forbes said that if investors and consumers had faith in the economy then there would be no need to hold the yellow metal.

He added that only jewelers and gold miners should be buying gold. However with little confidence in the dollar, he added that investors are either looking for defensive securities or are sitting on the sidelines.

“When [gold] has to be bought as an asset class it tells you that the politicians are making a hash of things, central bankers are making a mess,” he said. “If it’s fixed in value, the only ones who would buy it would be jewelers.”

“If the politicians do things right then you can invest your money into productive assets instead of trying to defend what you have,” he added.

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Forbes: More volatility in gold prices

Investors can expect to see more volatility in gold prices in the next two years as the yellow metal forms a “complicated bottom,” said famed investor and author Jim Rogers.

Rogers was one of the keynote speakers at FreedomFest, an annual convention that looks to gather free minds for open discussions on politics and the economy. In an interview with Kitco News’ Daniela Cambone, Rogers said he doesn’t think that gold has found a bottom despite the fact that prices managed to rally after comments from Fed Chairman Ben Bernanke, who said on Wednesday that a “highly accommodative policy is needed for the foreseeable future.”

On Thursday spot gold managed climb to $1,298 an ounce, its highest intraday high since June 24. However Rogers said he doesn’t care what the Fed does as it only knows one thing which is to print money.

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Forbes: Any Green Flags For Gold?

Recent data of ETF inflows and outflows is pretty much what most investors might expect but many have wondered whether this data can be used as a contrary indicator for various markets. The WisdomTree Japan Total TOT +1.72% Dividend Index (DXJ) that I reviewed yesterday had the largest inflow of $8.3 billion in the 1st half of 2103.

It should be no surprise that the biggest outflows—$18 billion—were in the SPDR Gold Trust (GLD), which was over double the $8.2 billion outflow from the iShares Emerging Markets (EEM). Also high on the list was the iShares Barclay TIPS Bond ETF (TIP), which lost $4.7 billion.

The bearish sentiment on gold has been very high for many months but that did not help GLD from avoiding a double digit slide in June. In the early May article, The Most Vulnerable Market, the technical outlook on both the SPDR Gold Trust (GLD) and the gold miners pointed to still lower prices.

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Forbes: SHFE Extends Gold-Trading Hours As China's Market Continues To Develop

The Shanghai Futures Exchange launched after-hours trading in gold this week and initial volume was described as high, all of which observers say reflects the country’s growing role in the gold market.

“It’s one more indicator of China’s significant interest in gold and desire to become a global force in the gold market,” said Jeffrey Nichols, managing director of American Precious Metals Advisors and senior economic consultant to Rosland Capital. Nichols provides consulting services for a number of entities in Asia, including China.

The country has been looking to expand its gold market infrastructure and participation to become one of the leading marketplaces for gold, Nichols said. The move also helps the exchange meet competition from others in the region, he added.

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Forbes: Is Gold Really Worth $40,000 Per Ounce?

My mom – who is going on 95 years old – grew up on a farm in rural California. Her home did not have electricity and she studied by kerosene lantern. An uncle who lived in the city came for a visit and gave my mom and her two siblings a rectangular piece of paper measuring about 3 inches by 6 inches. It had pretty pictures printed on each side. Based on his demeanor, she could tell that her uncle thought it was a special gift and expected some level of reaction from her, her sister, and her brother. But, there was none. They held in their hands a novelty and they were more filled with curiosity than excitement. My mom, her sister, and her brother asked, “What is it?” Their uncle replied, “Why, that’s a dollar bill. That’s money.” The kids began to laugh, “Who are you trying to kid? That’s not money. Real money is made out of gold and silver.” When my mom told me that story, it reminded me of one particular scene in the movie “Old Yeller.”

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Forbes: Metal Outlook: Gold Market To Keep Focusing On Fed Expectations, Also Eye Egypt, ETF Flows

Gold traders are likely to remain preoccupied next week with thoughts about when the Federal Reserve might scale back its quantitative-easing program, although the ongoing conflict in Egypt and exchange-traded-fund flows also will be on their collective radar.

Gold has suffered since mid-June when Fed Chairman Ben Bernanke suggested policymakers could start to taper their bond-buying program yet this year if the economy continues to improve. Analysts say that notion was reinforced Friday when the U.S. jobs report for June was stronger than what markets had factored in. Gold fell as the dollar and Treasury yields rose.

Gold and silver were higher for the week until the Labor Department early Friday reported a stronger-than-forecast 195,000 rise in June non-farm payrolls, along with upward revisions for May and April. The market then turned south, with the most-active August futures finishing the week with a loss of $11 to $1,212.70 an ounce on the Comex division of the New York Mercantile Exchange. September silver lost 73.4 cents for the week to $18.736.

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Forbes: How Gold Miners Became A Terrible Investment

It’s tough to find an entire investment sector that has tumbled by 50% this year, but that’s how far the shares of gold mining companies have fallen in 2013. The price of gold, of course, has also plunged in 2013 by some 25% to $1,240 an ounce. But gold mining stocks have performed much worse than broader market indices and even gold itself.

For nearly eight years now, shares of gold producers have underperformed in a very bad way, which is remarkable because until recently these companies were operating in the most favorable gold price environment imaginable. This year will probably be the first time since 2000 that gold will have a negative annual return. Gold mining companies, however, have managed to underperform gold in both good gold markets and bad—with the underperformance getting exceptionally ugly in the down times. Gold miners have given investors little upside when the price of gold rises and handed them serious losses when gold falls. Gold producers have consecutively underperformed gold since 2006, Deutsche Bank notes in a recent metals and mining report. They only outperformed gold in four instances in the last 12 years as gold soared starting in 2000 from a decade of lows to a high of $1,900 an ounce in 2011. For gold miners, all the overperforming years came prior to 2006.

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Forbes: Gold Could Fall To $1,000 If It Breaks Through Key Resistance On QE Taper, Weakness In China And India

Not too long ago, gold was making all-time highs as investors poured into the yellow metal seeking safety. That is old news: the gold trade has completely broken down since last September, with bullion now down more than 30% since then, and possibly making its way down to $1,000 an ounce if it breaks through key levels of resistance that are fast approaching. Initially fueled by a rotation into stocks, and currently exacerbated by fears that the Bernanke Fed may taper QE sooner than expected, the recent rout in gold doesn’t seem set to stop any time soon.

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Forbes: FOCUS: Speculators Net Bullish Gold Positions Fall -- CFTC

The net-long positions for large speculators in gold futures and options on the Comex division of the New York Mercantile Exchange fell as the new short positions they added more than offset the new bullish positions, according to U.S. government data released late Friday.

For the week ended June 11, large speculators in the Commodity Futures Trading Commission’s weekly commitment of traders report added both gross longs and gross shorts in gold, but they added many more gross shorts, effectively lowering the net-long position. In silver, large speculators flipped to a tiny net-short position in the disaggregated report, while in the legacy report they cut their net-long silver holdings.

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Forbes: Technical Trading: Gold Trade Remains Lethargic, Volatility Narrows Into FOMC

Comex August gold futures are slightly weaker heading into Monday’s New York trade, but the yellow metal continues to consolidate within recent ranges.

Traders should brace for a potentially big move this week. There is an old market adage: “the longer a market coils, the longer and stronger the breakout is once it occurs.” Gold has been coiling or consolidating in recent weeks and this week’s Fed meeting has the potential to ignite some fireworks.

The main event this week will be this week’s U.S. Federal Open Market Committee (FOMC) meeting. The meeting summary is slated for release Wednesday, with Fed Chairman Ben Bernanke speaking in a press conference to follow.

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Forbes: Feature: Is It Sustainable To Mine Gold In This Current Price Environment?

After seeing gold prices plummet in 2013 and with gold miners battling high operating costs, gold companies find themselves with razor thin profit margins with the ounces they’re pulling out of the ground.

The cost to mine and produce an ounce of gold, on average, ranges from $1,100 to $1,250.. Some mines produce gold at a very affordable cost while others are now producing gold at costs that are higher than the metal is valued.

As gold rose to over $1,900 an ounce in the fall of 2011, the general thought process that accompanied the rise was that gold miners were reaping enormous profit margins.

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Forbes: Labor Dispute Shuts Down Mexican Tycoon Carlos Slim's Gold Mine

The Minera Frisco company, owned by Mexican mogul Carlos Slim Helú, reported that its El Coronel mine suspended production of gold and silver as a result of being shuttered by workers during a conflict between two rival unions. Located in the north-central state of Zacatecas, El Coronel is Minera Frisco’s biggest mine. In 2011 El Coronel produced 197,631 ounces of gold and 20,419 ounces of silver.

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Forbes: Gold Survey: Higher Prices Expected In Gold Next Week -- Survey Participants

Gold values could rise next week, at least within the current price range, said a majority of participants in the Kitco News Weekly Gold Survey.

In the Kitco News Gold Survey, out of 36 participants, 23 responded this week. Of those 23 participants, 15 see prices up, while six see prices down and two see prices moving sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

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Forbes: METALS OUTLOOK: Gold May Stay Range Bound, To Watch Dollar

Economic data and U.S. dollar movements will continue to influence the gold market next week, but market watchers said they wouldn’t be surprised if the yellow metal remains within its established range.

August gold futures fell Friday, settling at $1,383 an ounce on the Comex division of the New York Mercantile Exchange, down 0.72% on the week. July silver slipped Friday, settling at $21.743 an ounce, down 2.25 % on the week.

In the Kitco News Gold Survey, out of 36 participants, 22 responded this week. Of those 22 participants, nine see prices up, while seven see prices down and six see prices moving sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

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Forbes: Goldilocks Bashes Gold

In the nursery tale, Goldilocks is a vulnerable child, but in financial markets Goldilocks is a powerful force and on Friday she abruptly reversed the gold comeback.

The May U.S. jobs report that was released on Friday indicated a kind of perfect environment for stocks, reflecting an economy that was marching ahead at a measured pace that was less likely to provoke the Federal Reserve into making any sudden and drastic moves. It was disastrous for the yellow metal, which slumped by more than 2% on Friday, falling back down to $1,382 an ounce. Gold has now dropped by 15% since late March when the gold sell-off started in earnest.

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Forbes: Gold Survey: Survey Participants Torn Over Gold Market Direction For Next Week

Friday’s U.S. monthly jobs report did not provide any guidance for market direction, so market participants are back to debating whether or not gold can break out of its current range. Participants in the weekly Kitco News gold survey are equally torn over next week’s price direction.

Until Friday’s sell off, gold was looking to end the week with gains, but the late-session break erased those hopes.

In the Kitco News Gold Survey, out of 36 participants, 22 responded this week. Of those 22 participants, nine see prices up, while seven see prices down and six see prices moving sideways or are neutral. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

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