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Norilsk wants to acquire the rest of Gold Fields
By Choy Leng Yeong
Bloomberg News Service
Sunday, April 25, 2004
http://www.bloomberg.com/news/markets/commodities.html
Gold may rise this week, ending four straight weekly
declines, on speculation the Federal Reserve will limit
any interest-rate increases this year, a Bloomberg
survey shows.
Twenty-one of 35 traders, investors, and strategists
polled in New York, London, Singapore, Sydney, and
other cities on Thursday and Friday advised buying
gold. Seven recommended selling, and seven said
they would hold the precious metal.
Gold futures in New York have fallen 8.6 percent from
a 15- year high of $433 an ounce on April 1. The drop
was spurred in part by the dollar's 6.4 percent rally
against the euro this year on expectations the Fed
will boost its loan-rate benchmark from a 45-year
low. A rising U.S. currency erodes the appeal of gold
as an alternative to other dollar-denominated assets.
"It will soon dawn on the financial community that the
Fed will be hamstrung to raise rates in any meaningful
way without deep-sixing the American consumer and,
by extension, the entire U.S. economy," said Douglas
Pollitt, an analyst at brokerage Pollitt & Co. in Toronto.
Gold for June delivery fell to $5.90, or 1.5 percent, to
$395.70 an ounce last week on the Comex division of
the New York Mercantile Exchange. The dollar rose
for the third week in a row and on Thursday reached
its highest against the euro since late November.
Economic reports signaling the prospect of higher
interest rates boosted the dollar. The U.S. currency
rose Friday after a jump in durable goods orders
boosted speculation that by September the Fed will
raise its target interest rate of 1 percent. Gold had
its biggest drop in five weeks on April 2, after U.S.
employers in March added the most jobs in four
years.
Fed Chairman Alan Greenspan, who last week said
the central bank's benchmark rate "must rise" to
prevent inflation, probably won't seek a large
increase because of the burden higher loan costs
would place on consumers, Pollitt said.
Consumer credit totaled $2.02 trillion at the end
of February as Americans took advantage of the
lowest interest in 45 years to finance purchases of
cars and other goods. Consumer spending drives
the economy, accounting for two-thirds of growth.
The U.S. had a record current account deficit of
$541.8 billion last year. The deficit represents 5
percent of gross domestic product, above the 1.3
percent average for the 30 nations tracked by the
Organization for Economic Cooperation &
Development.
The White House had forecast the budget deficit in
the fiscal year that ends Sept. 30 to grow to a record
$521 billion. The deficit in fiscal 2003 was a record
$374.2 billion as the U.S. boosted spending on the
military and homeland security, while tax cuts and
a stagnant job market diminished receipts.
"The economy is still very tricky, and there's still a
lot of debt," said John Kinsey, who helps run C$1
billion ($734 million) in assets at Caldwell Securities
Ltd. in Toronto. "Gold is still a good hedge. It's a bit
like insurance."
Gold touched $390.20 an ounce on Wednesday, the
lowest since early March and close to the 200-day
moving average during the past year of $390.56.
"Unless the price retreats below $390, the bull trend
will remain in place," said Daniel Hynes, resources
analyst at Natural Resources Group, ANZ Institutional
Banking Group Ltd. in Melbourne.
Hedge funds reduced their holdings in gold futures by
almost half as prices fell, statistics from the Commodity
Futures Trading Commission showed on Friday.
Hedge funds and other large speculators bought 73,276
more gold futures on the Comex than they had sold as
of Tuesday, down from 138,696 as of April 13 and the
second straight weekly decline, the report showed. The
so-called net-long positions on April 6 reached
144,253 contracts, the biggest in more than 20 years.
"Some of the speculative froth has dissipated," Pollitt
said. "The hedgers might be beneath the market with
bids, and the Asian trade has picked up.'"
Gold rose on Friday even as a surge in U.S.
durable-goods orders boosted speculation that an
accelerating economy may prompt the Fed to raise
rates soon.
"The impact of Greenspan's comments hinting a rise
in interest rates seems to be wearing off somewhat,"
said Alec Kim, manager at Korea Exchange Bank
Futures Co.'s international marketing division in Seoul.
Gold "may attempt to rally next week, breaking away
from the recent weak prices," he said.
The decline in gold prices may attract demand from
jewelers. India is the largest jewelry consumer, followed
by the United States and China, according to the Gold
Survey 2003 report by London-based researcher, GFMS
Ltd.
India's exports of jewelry and gems rose a
higher-than-forecast 31 percent in the year ended in
March, the Gems & Jewelry Export Promotion Council
said this month. Overseas sales of gems and jewelry
are India's biggest export earner.
"Indian demand is meant to be at record levels," said
Matthew Turner, an analyst at Virtual Metals, a
London-based metals researcher.
China may soon cut its 38 percent import tariff on gold
jewelry, the Oriental Morning Post reported this month,
citing the China Gold Association. Six Chinese jewelry
companies, were authorized by the People's Bank of
China to import gold jewelry. The sole importer now is
China National Arts & Crafts (Group) Corp., the paper
said.
"Slashing tariffs will provide an even more underlying
fundamental support for gold,' said Lawrence Edelson,
an analyst at Palm Beach Gardens, Florida-based
Weiss Research.
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RECOMMENDED INTERNET SITES
FOR DAILY MONITORING OF GOLD
AND PRECIOUS METALS
NEWS AND ANALYSIS
Free sites:
http://www.cbs.marketwatch.com
http://www.capitalupdates.com/
http://www.silver-investor.com
http://www.thebulliondesk.com/
http://www.goldismoney.info/index.html
http://www.minersmanual.com/minernews.html
http://www.a1-guide-to-gold-investments.com/euro-vs-dollar.html
http://www.investmentrarities.com
http://www.kuik.com/KH/KH.html
(Korelin Business Report -- audio)
http://www.plata.com.mx/plata/home.htm
(In Spanish)
http://www.plata.com.mx/plata/plata/english.htm
(In English)
Subscription site:
http://www.lemetropolecafe.com/
Eagle Ranch discussion site:
http://os2eagle.net/checksum.htm
Ted Butler silver commentary archive:
http://www.investmentrarities.com/
----------------------------------------------------
COIN AND PRECIOUS METALS DEALERS
WHO HAVE SUPPORTED GATA
AND BEEN RECOMMENDED
BY OUR MEMBERS
Centennial Precious Metals
3033 East 1st Ave.
Suite 403
Denver, Colorado 80206
www.USAGold.com
Michael Kosares, Proprietor
US (800) 869-5115
Canada 1-800-294-9462
European Union 00-800-2760-2760
Australia 0011-800-2760-2760
cpm@usagold.com
Colorado Gold
222 South 5th St.
Montrose, Colorado 81401
www.ColoradoGold.com
Don Stott, Proprietor
1-888-786-8822
Gold@gwe.net
El Dorado Discount Gold
Box 11296
Glendale, Arizona 85316
http://www.eldoradogold.net
Harvey Gordin, President
Office: 623-434-3322
Mobile: 602-228-8203
harvey@eldoradogold.net
Investment Rarities Inc.
7850 Metro Parkway
Minneapolis, Minnesota 55425
http://www.gloomdoom.com
Greg Westgaard, Sales Manager
1-800-328-1860, Ext. 8889
gwestgaard@investmentrarities.com
Kitco
178 West Service Road
Champlain, N.Y. 12919
Toll Free:1-877-775-4826
Fax: 518-298-3457
and
620 Cathcart, Suite 900
Montreal, Quebec H3B 1M1
Canada
Toll-free:1-800-363-7053
Fax: 514-875-6484
http://www.kitco.com
Lee Certified Coins
P.O. Box 1045
454 Daniel Webster Highway
Merrimack, New Hampshire 03054
www.certifiedcoins.com
Ed Lee, Proprietor
1-800-835-6000
leecoins@aol.com
Miles Franklin Ltd.
3015 Ottawa Ave. South
St. Louis Park, Minn. 55416
1-800-822-8080 / 952-929-1129
fax: 952-925-0143
http://www.milesfranklin.com
Contacts: David Schectman,
Andy Schectman, and Bob Sichel
Missouri Coin Co.
11742 Manchester Road
St. Louis, MO 63131-4614
info@mocoin.com
http://www.mocoin.com
Resource Consultants Inc.
6139 South Rural Road
Suite 103
Tempe, Arizona 85283-2929
Pat Gorman, Proprietor
1-800-494-4149, 480-820-5877
Metalguys@aol.com
Swiss America Trading Corp.
15018 North Tatum Blvd.
Phoenix, Arizona 85032
http://www.swissamerica.com
Dr. Fred I. Goldstein, Senior Broker
1-800-BUY-COIN
FiGoldstein@swissamerica.com
----------------------------------------------------
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