Gold bulls persist on dollar drop as stimulus kept

Inflation Outlook

Bullion slid from its 2011 all-time high partly because unprecedented money printing failed to stoke inflation. Expectations for gains in U.S. consumer prices, as measured by the break-even rate for 10-year Treasury Inflation Protected Securities, reached a five-week low yesterday.

India, last year’s biggest gold consumer, restricted imports of the metal this year to curb a record current-account deficit. A shortage pushed premiums over the spot price to a record this week, according to the All India Gems & Jewellery Trade Federation. Demand for bullion before the Diwali festival that takes place at the start of November may support prices, said James Moore, an analyst at FastMarkets Ltd. in London.

Four of 11 people surveyed expect raw sugar to gain next week and four were bearish. The commodity lost 2.5% to 19.02 cents a pound on ICE Futures U.S. in New York this year.

Grain Surveys

Nine of 24 people surveyed anticipate lower corn prices and seven said the grain will rise, while 12 of 26 said soybeans will climb and eight expect lower prices. Eleven predicted gains in wheat and nine were bearish. Corn fell 37% to $4.41 a bushel this year in Chicago. Soybeans slid 7.9% to $12.985 a bushel, as wheat slid 11% to $6.92 a bushel.

Six traders and analysts surveyed expect copper to advance next week, two were bearish and nine neutral. The metal for delivery in three months, the London Metal Exchange’s benchmark contract, dropped 9.5% to $7,175.50 a ton this year.

The S&P GSCI gauge of raw materials rose as much as 5.4% and declined as much as 7.8% since the start of January. A report from HSBC Holdings Plc and Markit Economics showed yesterday that manufacturing in China strengthened this month more than economists had expected. The world’s second- biggest economy will expand 7.4% next year, the least since 1990, economist estimates compiled by Bloomberg show.

“From a pure fundamental perspective you probably don’t have major upside at the moment but you don’t have major downside either,” said Michael Widmer, head of metal markets research at Bank of America Merrill Lynch in London. “The delay to Fed tapering is probably supportive for commodity prices. On the macro-economic side you do have a few conflicting signals.”

Gold survey results: Bullish: 17 Bearish: 9 Hold: 6
Copper survey results: Bullish: 6 Bearish: 2 Hold: 9
Corn survey results: Bullish: 7 Bearish: 9 Hold: 8
Soybean survey results: Bullish: 12 Bearish: 8 Hold: 6
Wheat survey results: Bullish: 11 Bearish: 9 Hold: 2
Raw sugar survey results: Bullish: 4 Bearish: 4 Hold: 3
White sugar survey results: Bullish: 4 Bearish: 4 Hold: 3
White sugar premium results: Widen: 4 Narrow: 2 Neutral: 4

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