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Gold trades quietly during Thanksgiving Holiday 25 November 2010, 2:46 p.m.



Market Nuggets: MKS: Gold trades quietly during Thanksgiving Holiday
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25 November 2010, 2:46 p.m.
By Daniela Cambone
Of Kitco News
http://www.kitco.com/
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(Kitco News) -- Gold was trading quietly during the entire day with the US being closed for Thanksgiving, hovering between $1370 and $1374, says a research note from MKS Finance. Concerns over Euro Zone debt issues were the main facts supporting gold today like in the previous sessions, MKS said. “The market was bound in a tight range between $1371.70 and $1374.50 in an extremely thin environment for the entire morning session. Spreads had also widened considerably as a result across all metals,” it said. Adding support was the news that Vietnam’s Central Bank allowed gold imports into the country in an attempt to bring prices in line with those on the international gold market. MKS anticipates more action tomorrow and a fairly volatile market, “due to the fact that not all market players will be back.”

By Daniela Cambone of Kitco News; dcambone@kitco.com

Market Nuggets: Gold Well Below Inflation Adjusted 1980 High in Deutsche Mark – GoldCore

25 November 2010, 10:54 a.m.
By Daniela Cambone
Of Kitco News
http://www.kitco.com/
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(Kitco News) -- Gold remains nearly half of its price in 1980 when adjusted for inflation in many currencies which should give those calling gold a bubble pause for thought, says GoldCore. When adjusted for inflation, the record high price of gold in 1980 in Deutsche mark (converted to euros) was over €1,800/oz, it said in its newsletter. “Rather than gold rising in price, what is actually happening is that the world’s major currencies are being devalued through unprecedentedly loose monetary and fiscal policies which is seeing paper currencies fall in value versus the finite currency that is gold,” says GoldCore.

By Daniela Cambone of Kitco News; dcambone@kitco.com

25 November 2010, 10:40 a.m.
By Daniela Cambone
Market Nuggets: China Concerns Pressure Copper - BMO

(Kitco News) -- Copper is heading for a third weekly drop on concerns demand may slow as China lifts interest rates to control inflation, says the Bank of Montreal. China’s central bank said Thursday that it will “normalize” monetary conditions, reinforcing expectations for higher interest rates, moderating economic growth and slower copper demand. “However, it is unlikely that China does much to slow its economy in 2011 as the inflation experienced in the country is mainly a food price story,” BMO said. BMO Research expects investors to again concentrate on the pending deficit in the copper market, lifting prices higher. BMO Research expects the price to average US$4.00/lb in the first half of 2011, up from the current US$3.75/lb.

By Daniela Cambone of Kitco News; dcambone@kitco.com

25 November 2010, 8:47 a.m.
By Allen Sykora
Market Nuggets: SEB Commodity Research Retains Bullish View On Gold
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(Kitco News) --SEB Commodity Research says its strategic and short-term tactical views on gold remain bullish. Analyst Filip Petersson lists a number of factors helping gold rise lately, including a run for safe-haven assets amid European debt worries and the Korean conflict. Markets have not reacted with relief toward efforts to bail out Ireland, with other nations’ bond yields rallying and the focus turning toward Portugal and Spain. Furthermore, Chinese inflation and a lack of inflation-protected investment alternatives could send Chinese retail investors into gold. “Our strategic gold-market view remains bullish,” SEB says. The tactical view is influenced by rallying bonds of peripheral European nations and the Korean conflict. “The later is likely to blow over quickly, but the prior could get out of control if Spain heats up,” SEB says. “In that case, gold would rally in parallel with the dollar as Europeans rush for an alternative to the euro. Our tactical view remains bullish.”

By Allen Sykora of Kitco News; asykora@kitco.com

25 November 2010, 8:35 a.m.
By Allen Sykora
Market Nuggets: Barclays: MF Global Sees Worrying Parallels With Spring For Commodities

(Kitco News) -- MF Global analyst Edward Meir says he sees some worrisome parallels between current conditions and spring, when European worries hurt a range of commodities, including base metals. In March/April, the U.S. economy was showing signs of perking up, only to be derailed in part by a debt crisis in Europe when problems emerged in Greece. “We seem to be going through the same pattern this time around, and although the crisis has yet to fully play out, some parallels are striking,” Meir says. There are record high yields in the debt market for the “problem countries,” he points out. “Also, just as we saw last spring, the European authorities seem to be sending mixed messages about what to do, although in Ireland's case, they made all the right moves only to be rebuffed, at least initially, by a reluctant borrower,” Meir says. Meanwhile, markets are keeping an eye on China and expectations for more tightening moves to ward off inflation. “All this does not bode well for commodity prices going into the year-end, and we would therefore be reluctant to go long here until a more meaningful correction sets in,” Meir concludes.
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By Allen Sykora of Kitco News; asykora@kitco.com

25 November 2010, 8:18 a.m.
By Allen Sykora
Market Nuggets: Barclays: Rebounding Copper-Scrap Supply Not Enough To Plug Gap

(Kitco News) -- A rebound in scrap copper supply isn’t enough to fill an expected supply/demand deficit for the metal, says Barclays Capital. “Global copper scrap supply has improved markedly this year, which is in stark contrast to 2009, when the combination of a sharp decline in industrial activity and low prices resulted in a huge contraction in scrap availability, subsequently forcing consumers to use more primary metal,” Barclays says. A widening of scrap discounts in the U.S. Midwest is evidence of improved availability, and consumers and traders in Europe say they have had no difficulty sourcing scrap. “Could scrap plug the copper raw material gap? We don’t think so,” Barclays says. “Successive years of high prices and strong emerging-market demand have cleared latent scrap out of the system, leaving slim pickings in the market for old scrap.” Even with recovery in scrap supply this year, the refined copper market is expected to be in a 455,000-metric-ton deficit, and even after a 150,000-ton positive adjustment for increased Chinese domestic scrap supply, the forecast rises to 780,000 tons in 2011, Barclays concludes.

By Allen Sykora of Kitco News; asykora@kitco.com

25 November 2010, 7:28 a.m.
By Allen Sykora
Market Nuggets: Barclays Capital Sees Technical Support Building For Gold

(Kitco News) -- Technical-chart analysts with Barclays Capital say gold is generally retaining a bid tone due to ongoing peripheral euro-area concerns. Referring to gold prices in dollar terms, they write in a research note: “Support is building over the 1,314/1,335 lows and whilst that remains the case, we look for a break above interim resistance at 1393/1404. Extension through the 1425 high would confirm a run at 1440.”

By Allen Sykora of Kitco News; asykora@kitco.com

25 November 2010, 7:28 a.m.
By Allen Sykora
Market Nuggets: Harbor: Aluminum In 'Buying Zone' Below $2,300 Per Metric Ton

(Kitco News) -- Harbor Intelligence says aluminum prices may be in a “buying zone,” especially below $2,300 per metric ton. After hitting $2,500, prices entered a short-term correction or pause phase, Harbor says. The metal closed Wednesday at $2,259 per metric ton. “Nevertheless, fundamentals, macroeconomic cycle signs and technical indicators point to higher prices ahead,” Harbor says. Factors that Harbor cites include the dollar, which has “recovered some lost ground but remains in bearish mode,” demand that remains in an upward trend despite losing “some dynamism,” rising output costs, and a contraction in Chinese production and frequent disruptions in Western nations. Harbor also notes inventory coverage has continued to fall toward historical averages, and premiums are climbing to multi-year highs.
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By Allen Sykora of Kitco News; asykora@kitco.com
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