Author: Teofan9ew

Original post:
Gold, silver eye best month in over 3 years

Non-OPEC oil production has been on the rise since 2009 and is expected to be so at least until 2015. In recent years, production growth in non-OPEC countries has been mainly driven by the US and Canada. Indeed, non-OPEC countries excluding the US and Canada recorded contraction in output from 2011 to 2013, further evidencing the importance of North America on the supply side of the ledger.

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Non-OPEC Oil Supply Growth to be Driven by US and Canada in Coming Years

Asian shares dropped as China’s GDP growth moderated in 4Q13. The stock market was also dampened by some disappointing US earnings results released last week. In the commodity sector, crude oil prices eased again in Asian session while gold firmed a tad as a report showed that Asian physical demand climbed higher.

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China’s GDP Growth Eased in 4Q13

The price of silver fell back closer to $19 an ounce this week, pushed lower in part due to the US Federal Reserve’s action to taper their bond buying program by $10 billion dollars per month, a move which supports a stronger US dollar.

Latest Silver Price

The spot price of silver closed the week at $19.33, down from the $20 mark on Monday, falling by more than four percent on Thursday and Friday.

US Fed Taper

While most analysts had expected the Fed to wait a few months into next year before announcing it would trim its monthly $85 billion of bond purchases, the fact it did so on Wednesday by $10 billion was welcomed by respondents. Also, Ben Bernanke said the purchases would likely be cut at a “measured” pace through much of 2014 if job gains continued as expected, with the program fully shuttered by late 2014.

So what does this mean for the price of silver and other commodities? Most analysts are agreed that the price of silver going forward will remain under some pressure, however 2014 could well be a positive year for the precious metal. Precious metals expert David Morgan commented “I think we’ll see $30 to $34 silver and $1700 gold by the end of 2014.”

Most analysts see silver trading between $19 and $26 or so in 2014. The majority, in fact, place the white metal at a conservative $21, as is evidenced by the following estimates:

Barclays — $19.50 per ounce
Morgan Stanley — $21.01 per ounce
UBS — $20.50 per ounce
Bank of America — $26.38 per ounce
Thomson Reuters — $20.42
Bank of Montreal — $21
Commerzbank — $21.50 per ounce

Investors in silver may also do well to keep in mind what David Morgan, publisher of The Morgan Report said in June this year “There’s only so much silver available under $20 an ounce. There’s even less available under $19 and even less available under $18. So the lower it goes, the shorter time frame it’s going to stay there. Even if people panic when it goes short term into the lower prices, the reality is that the entire silver market can’t be bought at $19.70 per ounce. There are only so many offers of physical silver at that low price, and it’s a small, small amount. Once that’s taken off the market, then it starts to pressure the market back up.”

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Silver price falls back closer to $19 following US Fed taper news

The US Dollar Index is once again seeing renewed strength as investors make flight back to safe haven assets which is helping the greenback move higher, supported by Fed Chairman Ben Bernanke’s comments last month laid out a road map for scaling back its asset buying program.

Latest Dollar Index Rate

The ICE US Dollar Index, which tracks the US dollar against a basket of major world currencies was trading at 83.253, 08:41 GMT this morning.

US Data & Policies

Better data from the US economy prompted investors to start reconsidering the Fed scaling back its stimulus programme sooner, paving the way for further US dollar upside swings. “The Fed tapering story is likely to remain popular so long as the run of data is at least decent. DXY is a buy on dips, with EUR and CHF weakness key contributors.” commented a research team at Westpac.

However analysts remain divided on the dollar’s short term direction. “Expectations on the Fed’s policy will probably go back and forth, depending on upcoming economic numbers. Still, it seems reasonable to think US bond yields are gradually rising, which should underpin the dollar,” said a trader at a Japanese bank.

“People are rotating out of assets that they overreached for as the grab for yield unwinds,” Brian Kim, a currency strategist at RBS Securities in Stamford, Connecticut, said in a telephone interview. “The dollar will be the beneficiary of people looking to unwind liquidity.”

Meanwhile, analysts at BNP Paribas said the stabilisation in US bonds appeared to be encouraging a cautious rebound in risk positions which should help a number of emerging market currencies and put a squeeze on short positions in commodity currencies.

Originally posted here: 
US Dollar Index firm around 83 on renewed flight to safe haven assets

The price of an ounce of gold continues a path downwards, nearing three year lows, trading considerably under $1300 an ounce and according to some analysts the precious metal may fall further this year and into next.

Latest Gold Price

Gold futures dropped this morning as much as 2.6 percent to $1244 an ounce, the cheapest since September 2010, and was at $1247.27 at 11:25, Singapore time this morning. Gold prices now seem to be heading for the worst quarterly drop since 1920…

Gold has plunged 26 percent this year, entering a bear market in April, after some investors lost faith in the metal as a store of value.

Latest Gold Price Forecasts

Goldman Sachs has recently updated their gold price forecast predicting further falls over the next couple of years for the precious metal as the more stable economic situation and higher real interest rates encouraged investors to seek returns elsewhere.

“We expect that gold prices will decline further given our US economists forecast for improving economic activity and a less accommodating monetary policy stance. We expect this decline in prices to coincide with rising jewellery/retail demand, which we view as price responsive and not price setting,” it added.

Goldman said the price would fall to around $1,050 an ounce by the end of next year.

Meanwhile, Morgan Stanley has lowered its gold price forecast citing the possibility of reduced US Fed stimulus or outright withdrawal from the current quantitative easing program.

“With investor demand for safe-haven assets waning against the backdrop of a strengthening US dollar and rising US bond yields, market conditions for gold and silver have become markedly less favourable,” the bank said in a note. The bank cut its 2013 gold price forecast by 5 percent to $1409 an ounce and its 2014 estimate by 16 percent to $1313.

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Price of gold continues downward trend under $1300 and may fall further

Asian shares remained pressured on Monday amid concerns over H7N9 cases in China and escalated tensions on the Korean Peninsula. The MSCI Asia Pacific (ex Japan) index slipped about -0.5% in the morning session. In the commodity sector, crude oil prices recovered after plummeting over the past 3 trading days.

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H7N9 Worries Weighed On Financial Markets

Early last week, the market attention was mainly on the hung parliament formed after the Italy election. Sentiment was also damped by Moody’s downgrade of UK’s triple A credit rating. Later in the week, investors’ risk appetite improved after Italy’s bond auctions and ECB President Draghi’s Assurance that the central bank would not exit monetary easing soon.

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Weekly Fundamentals – Brent Crude Extended Decline on Easing Iranian Tensions