At one point on Friday, bullion was a bit more than $5 from striking that milestone price. But it tracked the downward drive of stocks after economic data released by the U.S. indicated consumer sentiment presently is hovering about its lowest level in more than 12 months.
Demand from China, the globe’s second-largest consumer of the yellowish metal, underpinned prices on Friday. The Asian nation is preparing to celebrate its new year next month and it released economic data that was better than anticipated.
And the Chinese gold market merits being watched very closely, senior broker Kurt Pfafflin with Daniel’s Trading said.
“The People’s Bank of China is highly secretive and has not updated their official Gold Holdings in over 3 years,” the senior broker said. “But they’ve been accumulating big time. In 2012 alone, China imported more gold from Hong Kong than the European Central Bank’s entire official 502.1 tons of holdings.”
At 2:12 p.m. on Friday, gold futures fell 0.16 percent, a $2.69 fall to $1,684.90 per troy ounce.
Chinese economic growth
The Asian nation, which hosts the globe’s second largest economy – trailing only that of the U.S., saw the fourth quarter of last year develop at a pace of 7.9 percent, Reuters reports.
That gross domestic product figure is a little higher than what economists anticipated from the country as it aims to bounce back from the rough patches of last year.
“For gold we had some good physical demand from Asia, particularly China, after better-than-expected GDP data,” analyst Howard Wen with HSBC told the news source. “We expect physical buying to pick up ahead of the Chinese New Year on Feb. 10.”
U.S. central bank to provide boost?
The U.S. could be poised to resume its monetary stimulus program, which typically supports gold prices.
Concerns are growing about fiscal circumstances in the nation hosting the globe’s largest economy and gold is one strategy of hedging against inflation and nebulous circumstances.
Additionally, political leaders in the U.S. once again are preparing to take up negotiations for the situation with debt ceiling, which Pfafflin said is likely to impact the price of gold futures.
“The current legal limit of $16.4 trillion on the federal government’s debt would need to be raised in the next few weeks by another $2.4 trillion,” the senior broker said. “President Obama has declared he won’t negotiate it, Senate Leader Harry Reid said they’ll raise it. That would set the new debt limit at $18.794 trillion.
Yearly gains campaign begins anew
Gold is less than three weeks into another drive toward achieving yearly gains.
In 2012, bullion increased in value 7.1 percent, according to Bloomberg.
The monetary stimulus programs of the U.S., Europe and Japan were large drivers of gold’s upward drive, which resulted in the precious metal marking a 13th consecutive year of annual gains.
Yet the climb could have been better, the senior broker said.
“The fourth quarter last year and 2012 overall was very disappointing for gold and silver bulls,” Pfafflin said.
Forbes magazine reports a Kitco News Gold Survey indicates 18 of 33 participants forecast the yellowish metal to gain value next week.
The poll, which inquired of dealers, investment bankers, futures traders, money managers and technical chart analysts, indicated signs for gold’s rise are favorable.
THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.
THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.
TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.
YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.
GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.