Commodities » Precious Metals

Gold and silver daily review (March 16, 2010)

Contributed by Nirmal Bang

By Nirmal Bang

MARKET ROUNDUP

Gold futures ended higher on Monday in the face of a stronger dollar, as sovereign credit worries prompted investors to buy the metal as a safe haven. Silver too traded range bound in last trading session.

IN FOCUS

- The world's largest gold-backed exchange traded fund, SPDR Gold Trust, said its holdings stood at 1,115.511 tonnes as of March 15, unchanged from the previous business day.

- The world's largest silver-backed exchange- traded fund, the iShares Silver Trust, said its holdings stood at 9351.40 tonnes as of March 15, unchanged from the previous business day.

- The amount that gold miners cut their hedging positions rose to 4 million ounces in the fourth quarter from 3.18 million ounces in the third quarter as Barrick Gold Corp closed out its entire hedgebook.

- Noncommercial net long U.S. gold futures positions inched up 0.4 percent to 208,194 contracts in the week ended March 9 from 207,372 contracts a week earlier, according to the weekly Commitments of Traders report published by the Commodity Futures Trading Commission. It was the highest in five weeks.

- Bulgari chief executive Francesco Trapani forecast rising sales in 2010 as luxury spending picks up helped by product launches, after the Italian jeweller posted its first full-year loss in 26 years.

- Russia's central bank has sold gold coins containing 2,300 ounces of the precious metal in January -- an 85 percent slump compared with 15,700 ounces a year earlier. In January 2009, Russia was at the height of an economic crisis, the rouble was being devalued and the public's confidence in banks was low.

- South Africa's gold production fell by 5.8 percent in 2009, pushing the country to the fourth-biggest producer after China, Australia and the United States, the nation's Chamber of Mines said on Friday.

- Chief executives of gold producers almost always voice bullish sentiments about the price of the yellow metal, but mining executives lately have backed their conviction with actions.

FUNDAMENTAL OUTLOOK

Gold prices inched up in early trade session, underpinned by ongoing concerns over Europe's debt problems, but rises were capped with investors wary about a possible monetary tightening in China and ahead of a U.S rate decision. Later in the night we have FOMC meeting, we expect dollar to remain volatile during the day thus may drive preciuos metals prices in either of the direction.