Gold sees loses despite falling consumer confidence

Then again, the reference to upcoming higher rates was precisely the one that also shaped Mr. Trichet’s speech this morning. In this case, the markets have pretty much already factored in a perhaps quarter-point-large lift in euro rates and have circled the month of April as the one within which one might see such a first adjustment take place. Mr. Trichet certainly did not shy away from reinforcing the rate hike expectation and he thereby gave euro buyers an added level of confidence when they set out to accumulate the currency this morning.

The “race to the bottom” that many a hard money newsletter had declared was in full swing, and would last for years to come, now has apparently but a few weeks before it begins to turn in the opposite direction. As of this morning however, the not-so-hot data regarding the state of US home prices (declines in value were noted by Case-Shiller in almost all tracked US urban markets) and the fairly large decline in March US consumer confidence levels both reinforced the view that while the period following the June expiration of QE2 is likely to see less Fed accommodation, for the time being, the conditions are not quite ripe for an early termination of such monetary policy. Thus, gold and silver trimmed early losses in the wake of the Conference Board’s consumer confidence (or lack thereof) data, even though such a drop had been anticipated by economists. Subsequently, most of the trading focus shifted back towards the general month-end book-cleanup and the upcoming US payrolls data due prior to the weekend.

Other market-shaping news offered very little in terms of material changes from yesterday’s tenor. The situation in Libya continued to point towards a turning of the military tide in favor of the rebels at the expense of Mr. Gaddafi’s forces, while the situation in Japan continued to point to signs that one of the damaged Fukushima complex reactors is leaking radiation at levels that might only be possible to be construed as implying that either a partial or complete core meltdown is likely in progress. Japan’s dead and missing toll has now surpassed the 28,000 figure while nearly a quarter million people continue to live in temporary shelters.

Over in the MENA region, the Syrian Cabinet tendered its resignation amid on-going civilian unrest, while Yemeni protesters continued to keep the pressure on their government at intense levels. A deadly but accidental blast at an ammunitions factory in Sanaa killed 78 people and only served to heighten the already extreme levels of tension within the country.

Finally today, please be advised that this afternoon will mark the release of the CPM Group’s Gold Yearbook. The New York-based consultancy company is considered the foremost authority on markets for precious metals, and provides detailed and highly regarded research on specialty and base metals, energy, and agricultural markets. CPM Group provides advisory services relating to commodity risk management and asset management as well. Any precious metals investor who does care about the markets’ fundamentals and wishes to avail himself of a thorough analysis of the markets should not hesitate in picking up a copy of this seminal publication. Kitco is proud to be a sponsor of the fine research work that CPM carries out each and every year.

Our good friends at the CPM Group have been producing annual yearbooks on gold, silver, and platinum group metals, in a series of reports that began in 1971. This year’s reports are being published by Euromoney Books and Metal Bulletin. This year’s reviews have been priced at $150.00 plus shipping and handling to make them readily available to individual investors as well as institutions, corporations, and governments.

The Gold Yearbook 2011 is sponsored by Barrick Gold Corporation, Bahrain Financial Exchange, CME Group, Commodities Now, The Electrum Group of Companies, Goldcorp Inc., Global Board of Trade Ltd., Institute of Scrap Recycling Industries, Inc., Kitco Metals Inc., MKS Finance S.A., Multi Commodity Exchange of India, New Zealand Mint, Noah Financial Innovation, Primero Mining Corp., Sabin Metal Group of Companies, Singapore Mercantile Exchange, and Timmins Gold Corp.

Jon Nadler is a Senior Metals Analyst at Kitco Metals Inc. North America

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About the Author
Jon Nadler Jon Nadler is a Senior Analyst at Kitco Metals Inc. North America
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