Goud: vooruitzichten komende week.......
Gold is likely to hold in its current trading range of $1,550 an ounce to $1,640, with the yellow metal expected to hold at the upper end of that range, but not breaking through the ceiling.
Prices were mixed on the day and up the week. The most-active December gold contract on the Comex division of the New York Mercantile Exchange settled higher Friday, at $1,622.80, up 0.297% on the week. September silver settled lower on Friday, at $28.062 an ounce, up 0.939% on the week.
In the Kitco News Gold Survey, out of 32 participants, 19 responded this week. Of those 19 participants, 11 see prices up, while two see prices down, and six are neutral or see prices moving sideways. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.
Gold prices are holding above $1,600 an ounce, which gives some market participants a bullish bias toward the metal. However, they also point out that there is little reason for gold to try and take out the $1,640 area. August is a seasonally slow time for the metal and for financial markets in general as this month is a popular time for vacations, particularly in Europe. That leads to reduced volume.
This lighter volume is showing up in trading data from the Comex, with open interest about 390,000 contracts. Open interest is the number of trading positions left outstanding at the end of the session. Open interest is a sign of liquidity and can show trading activity in a market.
George Gero, vice president with RBC Capital Markets Global Futures and a precious metals strategist, said current open interest levels are some of the lowest since 2009. Normally, he said at this time of the year, open interest is around 450,000 contracts.
“When we rally, it’s on short covering. When we fall, it’s on liquidation. When the December contract first began the most-active it was building open interest, but not now. I think what we’re seeing (are) asset allocators moving to better-performing commodities, like grains and crude oil,” Gero said, adding that he expects gold to drift higher next week.
Ken Morrison, founder and editor of online newsletter Morrison on the Markets, said he believes the light volume and low open interest is a sign of disinterest in gold at current price levels. Since August 2011, gold has been in a pattern of lower highs and that there’s no catalyst to push gold out of the upper end of the trading range.
“As an indication of the low level of interest in gold, this past week saw four consecutive days when the lead-month contract traded less than 100,000 contracts. The last time that happened was a holiday week in December 2010. In contrast, Aug. 9, 2011 saw record volume in the lead month (of around) 398,000 futures contracts. Price needs to go lower to attract more interest,” Morrison said.
Gold prices, which have held in the $1,550 to $1,640 range since about late May, are up 3% on the year so far, but other markets like crude oil are up about 7%, the e-mini S&P contract is up about 12.5%, while corn is up roughly 33% and soybeans are up around 39%.
Gold traders have been keeping an eye on grain prices lately, Gero said, with concerns about food inflation picking up after the U.S. Department of Agriculture slashed U.S. national crop yields for corn two months in a row because of a devastating drought in the U.S. Midwest. Corn prices are near all-time record highs and soybean prices are also near all-time highs.
On Friday, USDA estimated the U.S. corn crop its lowest level since the 2006-07 growing season.
Yet not everyone is convinced that gold should rally on possible food inflation. Daniel Pavilonis, senior commodities broker with RJO Futures, said while USDA lowered the size of the crop, it also cut use, such as for exports. “Those countries (who buy corn) will seek alternatives. I don’t think the corn crop is a factor for gold,” he said.
Next week the U.S. Commerce Department will release its producer and consumer price index reports for July, which measure wholesale and retail inflation. The core PPI and CPI are both expected to rise 0.2%. Some economists said the overall figure may be higher to account for rising food prices.
Charlie Nedoss, senior market strategist with Kingsview Financial, said next week’s inflation reports may not yet register the surge in grain prices, but he added that higher food prices will work their way into the economy in the next six to 12 months.
By Debbie Carlson