Friday, April 17, 2009

Gold: longest losing streak since August. AND: "Metal Maneuvering: Copper Yea, Gold Nay"

UPDATE: I used early numbers for the daily percentage moves, they've been changed.
Original post:
It's been 36 days since we posted "Gold & silver vs. copper & uranium". Gold has been down for the last four weeks, copper up for the last five. Sometimes you get lucky. Sometimes a lot of time spent at the market pays off. I don't intend for this to be a heavy metal* blog so I'll probably get off the subject but this was a interesting, both for the profit potential and for the insight we might gain as to the direction of the broader economy. For the day, copper reversed it's earlier weakness and closed up 1.28% while gold ended down $11.90 or 1.35%. First up, Bloomberg via The Telegraph:
Gold headed for its fourth weekly decline, the longest losing streak since August, as a global stock rally eroded demand for the metal as a store of value.

Gold eased as Asian stocks advanced on growing confidence the global recession is easing. Investment in the SPDR Gold Trust, the biggest exchange-traded fund backed by bullion, dropped to 1,119.43 metric tons after holding at a record high of 1,127.68 tons the previous four days.

“Further strength in equity markets would signal an increasing risk appetite, which would be detrimental to precious metals, which have relied on safe-haven demand for support as the majority of commodity prices collapsed under the weight of rapid and severe economic deterioration,” said Toby Hassall, an analyst at Commodity Warrants Australia Pty....MORE

Next, in an example of tight writing, David Gaffen at MarketBeat gets more information into four hundred words than I've managed in the last ten gold posts:

When investors talk heavy metal these days, it isn’t gold on their minds. The decline in world-wide currencies had been a benefit to the gold markets through the beginning of March, but since then, the strongest metals markets have been the industrial ones, those with uses in manufacturing, such as aluminum, zinc, and particularly copper, a popular bellwether for economic demand.

Copper prices have risen for five consecutive weeks, bolstered in part by purchases of copper by China’s government as part of its efforts to renew demand in the emerging economic power. The country has been buying copper to help its struggling smelters, who have reduced production of copper because of weak demand. Undaunted, China has continued to buy copper scrap from around the world.

“China, rather than buy gold to diversify away from the dollar, is buying something they feel they have an immediate or shorter-term need for,” says Andrew Montano, director of precious metals at ScotiaMocatta in Toronto. “In lieu of buying gold, they’re buying the base metals.”>>>>MORE

*If anyone has the link to Jon Udell's video on the evolution of Wikipedia's "Heavy Metal Umlaut" page, I'd appreciate it. Here's our last post on Rock Dots "Metal Goes Soft".

Here's a 1997 idea from America's Finest News Source:

Ünited Stätes Toughens Image With Umlauts
WASHINGTON, DC—In a move designed to make the United States seem more "bad-assed and scary in a quasi-heavy-metal manner," Congress officially changed the nation's name to the Ünited Stätes of Ämerica Monday. "Much like Mötley Crüe and Motörhead, the Ünited Stätes is not to be messed with," said Sen. James Inhofe (R-OK). An upcoming redesign of the Ämerican flag will feature the new name in burnished silver wrought in a jagged, gothic font and bolted to a black background. A new national anthem is also in the works by composer Glenn Danzig, tentatively titled "Howl Of The She-Demon."