Gold traders bearish for first time in 2012 on Fed

Fewer Bonds

“Markets seem to be assuming all is OK now, but any re- emergence of problems -- Iran, Europe, U.S. economic front -- would see gold higher again,” said Adrian Day, the president of Adrian Day Asset Management in Annapolis, Maryland.

Spain sold fewer bonds than its maximum target in auctions yesterday and its borrowing costs rose, adding to concern that Europe is struggling to contain its debt crisis. Finance ministers from the 17-member euro zone agreed to a package last weekend that included 500 billion euros ($657 billion) of new bailout funds on top of 300 billion euros already committed.

Investors bought 62,500 ounces of American Eagle gold coins from the U.S. Mint last month, almost three times the amount sold in February, data on its website show. The 210,500 ounces purchased in the first quarter is still at least 22% less than in the first three months of the previous two years.

Spot gold’s 100-day moving average dropped below the 200- day measure for the first time in three years last week, reinforcing a bearish trend, UBS said in a report yesterday. Its 14-day relative-strength index is at 39.3, with a level of 30 indicating to some analysts that a rebound may be due.

Supply Surplus

Nine of 11 people surveyed expect raw sugar to drop next week, the most bearish the traders have been since July. Czarnikow Group Ltd., which traded sugar in more than 90 countries last year, anticipates the first supply surplus in four years. The commodity gained 1.7 percent this year to 23.7 cents a pound on ICE Futures U.S. in New York.

India, the world’s second-largest sugar producer after Brazil, will remain a net exporter of the commodity for a third year in 2012-2013 as supplies exceed domestic demand, the Indian Sugar Mills Association said on April 3.

Fourteen of 33 traders and analysts surveyed by Bloomberg expect copper to fall next week and eight were neutral. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, rose 10 percent to $8,372 a ton this year.

Thirteen of 27 people surveyed anticipate lower corn prices next week, while 13 of 28 said soybeans will gain. Corn rose 1.5 percent to $6.5625 a bushel this year as soybeans climbed 18 percent to $14.2275 a bushel.

“If you take out quantitative easing, the liquidity that was one factor driving prices higher is not there anymore,” said Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “The market right now is more about confidence, but it’s too early to say there’s a recovery for sure.”

*T Gold survey results: Bullish: 9 Bearish: 15 Hold: 5
Copper survey results: Bullish: 11 Bearish: 14 Hold: 8
Corn survey results: Bullish: 11 Bearish: 13 Hold: 3
Soybean survey results: Bullish: 13 Bearish: 11 Hold: 4
Raw sugar survey results: Bullish: 1 Bearish: 9 Hold: 1
White sugar survey results: Bullish: 1 Bearish: 9 Hold: 1
White sugar premium results: Widen: 3 Narrow: 6 Neutral: 2 *T

Bloomberg News

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