News

(Bloomberg) -- Gold Futures in New York Rise, Heading for Third Weekly Advance
Gold for April delivery in New York gained 0.1 percent to $1,364.20 an ounce at 10:05 a.m. Melbourne time, heading for a weekly advance. Bullion for immediate delivery fell 10 cents to $1,363.70 an ounce.

(Bloomberg) -- Gold May Gain on Federal Reserve Policy Outlook, Survey Shows
Gold may advance on speculation the Federal Reserve’s plans to maintain near-zero interest rates will spur investment demand, a survey found.

Twelve of 15 traders, investors and analysts surveyed by Bloomberg, or 80 percent, said the metal will rise next week. One predicted lower prices and two were neutral. Gold for April delivery was up 0.9 percent for this week at $1,361.80 an ounce at 11:15 a.m. yesterday on the Comex in New York.

While a lower jobless rate gives “some grounds for optimism,” unemployment will take “several years” to return to a “more normal level,” Federal Reserve Chairman Ben S. Bernanke said on Feb. 9. The U.S. needs faster employment growth for a sufficient time before policy makers can be assured the economic recovery has taken hold, he said last week. The Fed has kept plans to buy $600 billion of Treasuries through June and hold borrowing costs “exceptionally low.”

“The Federal Reserve will continue its quantitative easing of monetary policy as planned, and there are no signs yet that the Fed could raise interest rates any earlier than assumed,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “Both are positive news for gold prices.”

As of last week, futures indicated that traders expected the Fed to begin raising rates in a year’s time.

The weekly gold survey that started six years ago has forecast prices accurately in 198 of 349 weeks, or 57 percent of the time.

This week’s survey results: Bullish: 12 Bearish: 1 Neutral: 2

(Bloomberg BusinessWeek) -- Carlos Slim Beats Out Buffett and Gates
Mexican billionaire Carlos Slim topped Bill Gates and Warren Buffett in the money game for the second straight year. The value of Slim's publicly disclosed holdings, in industries ranging from mining to telecommunications, surged about 37 percent, to $70 billion, in 2010, according to data compiled by Bloomberg. The 22 percent jump in Berkshire Hathaway (BRK.A) shares wasn't enough for Buffett to catch up, and Gates's Microsoft (MSFT) stock fell 8.4 percent, hurting his returns even as he spread his investments to other companies.

Slim's best-performing asset last year was holding company Grupo Carso, which almost doubled in value as it prepared for this year's spinoff of its mining operations amid soaring gold and silver prices.

(Commodity Online) -- Marc Faber: Gold, Silver prices to fall [may fall in the short term]
Legendary investor, economist and commodities analyst Marc Faber says that prices of precious metals, especially gold and silver, could fall, but investors need not worry because the dip in the prices of these commodities will be shot term.

In his February outlook on commodities, Faber who is better known as the editor and publisher of the Gloom Boom and Doom report said that commodities have reached the parabola stage.

Warning that investors should prepare for some downside volatility in commodities, Faber said that long term he is still bullish on the metals.

But Faber said that precious metals, especially gold and silver could fall in the short term with the general market.

Gold could fall to the $1,100-1,200 area, Faber said.

For investors this should not cause any alarm because with the fiscal problems of the US and further monetization, the future for gold is still bright, he said.

Faber would use any decline in precious metals to add to his positions.

Faber is concerned about commodities, as they are currently very overbought by almost any measure. He goes on to say that commodities seem to have reached the parabola stage--going straight up, which is usually the very end of the move. Yes, it could last longer than anyone expects, but at some point prices will collapse again, as they did back in 2008.

This cycle, Faber notes, always occurs as higher prices lead to an increase in supply, which eventually overwhelms the market causing prices to fall. The cycle is longer for industrial commodities compared to agricultural prices as it is harder to build a new copper mine than it is for a farmer to plant more soybeans.

This cycle will play out even with the Fed's money printing. Investors should prepare for some downside volatility in commodity prices.

(FT) -- EU plans to lift import curbs on soaring food commodities
Europe has moved to loosen import restrictions on important agricultural commodities in response to tightening domestic markets and skyrocketing prices.

The European Commission’s agriculture committee proposed suspending import duties on feed wheat and barley – as well as allowing additional sugar imports at lower tariffs than usual. The proposals are only in draft form and will need to be voted on at forthcoming committee meetings, which are held twice a month.

The measure is the clearest acknowledgement yet of the tightness in European agricultural markets.

Cairo (AP) -- Investors Shift Money From Gold to Riskier Assets
Greater confidence in the economy is leading investors to move money out of gold and into riskier assets in search of bigger profits.

Gold prices have fallen 4.2 percent since the beginning of the year as more evidence surfaced that the economy is strengthening.

Today's newsletter is published on the GoldCore Blog here.

-- Posted Friday, 11 February 2011 | Digg This Article