Friday, October 26, 2012

Gold prices prediction next week october 29 2012

Gold prices prediction next week october 29 2012 Gold rose 9.4 percent to $1,711.30 an ounce in London this year, heading for a 12th straight annual gain, the longest winning streak in at least nine decades. October’s average of $1,749 is set to be the third-highest month ever. The Standard & Poor’s GSCI gauge of 24 commodities lost 0.9 percent since the start of January, and the MSCI All-Country World Index of equities climbed 9.7 percent. Treasuries returned 1.7 percent, a Bank of America Corp. index shows.

The BOJ, which holds a policy meeting Oct. 30, will consider raising its asset-purchase program by 10 trillion yen ($125 billion) to 90 trillion yen, the Nikkei newspaper reported yesterday. The Fed said Oct. 24 it will maintain $40 billion in monthly purchases of mortgage debt and probably hold interest rates near zero until mid-2015. The European Central Bank has said it is ready to buy bonds of indebted nations and China approved a $158 billion subways-to-roads construction plan.

Some investors buy bullion as a hedge against inflation and a weaker dollar, and the metal generally earns returns only through price gains, increasing its allure as interest rates decline. Inflation expectations measured by the break-even rate for five-year Treasury Inflation Protected Securities jumped 33 percent this year and reached a 16-month high in September.

Investors Buy Gold

Gold ETP holdings gained 7.9 percent since the end of July and now account for almost a year of mine production, according to data compiled by Bloomberg and Barclays Plc. Speculators’ wagers on a rally were the highest since August 2011 in the week to Oct. 9, CFTC data show. They cut their net-long position by 12 percent to 161,987 futures and options by Oct. 23, the second straight reduction, data show.

Gold dropped below $1,700 this week as “fatigue set in” among fund managers after they boosted bets and as prices failed to reach $1,800, said Edel Tully, an analyst at UBS AG in London. Higher prices also curbed physical demand, said Walter de Wet, an analyst at Standard Bank Plc in Johannesburg.

The U.S. Mint sold 48,500 ounces of American Eagle gold coins so far this month, 29 percent fewer than throughout September, data on its website show. This year’s sales of 530,000 ounces are down 41 percent from the same period in 2011.
Gold imports by India, last year’s biggest buyer, slid to as low as 170 tons in the third quarter from 205 tons a year earlier, according to Bachhraj Bamalwa, chairman of the All India Gems & Jewellery Trade Federation. Local prices fell 5.7 percent since setting a record Sept. 13. Gold’s drop this month may spur more physical demand in Asia, Standard Bank said in an Oct. 24 report. Indian consumers usually boost purchases before the wedding season and religious festivals later this year.

Central banks have been expanding bullion reserves to diversify from currencies. Nations may add almost 500 tons this year, the London-based World Gold Council said in August. Brazil raised its gold reserves last month for the first time since December 2008 and countries from South Korea to Russia increased holdings this year, International Monetary Fund data show.

Bloomberg surveyed Gold prices for next week october 29 2012
Fourteen of 26 analysts surveyed by Bloomberg expect prices to rise next week, nine were bearish and three were neutral. Investors boosted holdings in exchange-traded products to an all-time high of 2,585.1 metric tons yesterday, valued at $142.4 billion, data compiled by Bloomberg show. Hedge funds’ bets on a rally are near the biggest in more than a year, according to U.S. Commodity Futures Trading Commission data.

Kitco News Gold Survey for next week october 29 2012
In the Kitco News Gold Survey, out of 33 participants, 24 responded this week. Of those 24 participants, nine see prices up, while five see prices down, and 10 are neutral or see prices moving sideways. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Those who see prices moving sideways or are neutral on price direction said there’s a fair amount of uncertainty still in the markets for next week and that could keep people on the sidelines and prices trapped in a range. The month ends on Wednesday, there’s the October U.S. unemployment report on Friday and the U.S. presidential election is on Nov. 6.

Gold prices dipped under $1,700 an ounce briefly this week, but have not followed through on the downside. While that’s a potentially price-supportive sign, Mark Leibovit, editor of the VR Gold Letter, said he’s still waiting for a better signal, so he’s neutral right now.

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