Likely Trigger Liquidation

(Reuters) - Gold steadied in Europe on Thursday after falling to a four-month low in the previous session, as an uptick in the euro after Spain moved to clean up its banks and Europe's bailout fund approved a key payment to Greece took some pressure off prices. While the euro zone debt crisis is continuing to simmer, moves to address some of its problems are improving appetite for assets seen as higher risk, like stocks and commodities, as well as the single currency. Spot gold was at $1,589.40 an ounce at 05.26 a.m. EDT against $1,590.45 late on Wednesday, when it fell as low as $1,579.30 an ounce, its weakest since early January. Prices have fallen 3 percent this week as concerns over the euro zone debt crisis pressured the euro and other risk assets. While investors bought gold as a ...

Gold fell in quiet trade on Monday on weakness from equities and other commodities and fading hopes of more U.S. monetary easing could further weigh on bullion prices. The metal, which has tended to follow riskier assets, was pressured by a one-percent drop of the S&P 500 index .SPX on renewed Europe debt fears. Heavy losses in crude oil and copper also triggered a sharp sell-off in silver which has a strong industrial demand component. Trading volume of U.S. gold futures was sharply below average after it posted a 2012 low in the previous session, as some investors have reduced their bullish position in gold amid a brighter economic outlook. Sentiment in the gold market remains cautious ahead of an outcome of a Federal Reserve policy meeting on Wednesday. Gold has lost more than $150 ...

FUNDAMENTAL OUTLOOK at 0800 GMT (EDT +0400) WORLD The RBA sounded a cautious but steady note with its release of policy meeting minutes, but this did not prevent AUD from taking a knock after commercial entities voiced concerns about Chinese demand for resources. The reaction function for the AUD just goes to show how the individual exposures for various currencies matter at this point, especially within the risk bloc, and investors have become more mindful of individual catalysts. Our flow monitor for the past week, in emerging markets for example, showed broad-based liquidation out of these risk currencies in favour of the dollar, yet the past sessions have been characterised by a positive risk environment, another confirmation of our view that the market is continuing to price out the ...

(Reuters) - Gold fell 2 percent in heavy volume on Tuesday after breaching a key support, as renewed concerns about Greece's debt triggered economic fears, while some analysts say the metal looks oversold and poised for a rebound. Silver fell 3 percent, and platinum and palladium headed for their largest one-day falls this year after caution grew about global economic outlook a day after China cut its growth forecast and data showed the European Union is unlikely to avoid a recession. Bullion broke below its 200-day moving average for the first time since mid-January, tracking U.S. equities' slide on worries Greece could miss a deadline to complete a deal swap to avert a chaotic default. Gold investor sentiment was already cautious after a sudden 5 percent drop last Wednesday as ...

(Reuters) - Gold prices rose 1.5 percent on Tuesday as expectations that a Greek rescue deal will be completed drove the dollar down sharply against the euro. Bullion, which had dropped in early trade on nervousness about Greece, rebounded and headed for its biggest daily gain in two weeks as Greece's government was preparing a list of reforms needed to clinch a new financing package. Hopes for a bailout plan that would move Athens closer to avoiding a chaotic debt default boosted gold's inflation-hedge appeal. "If the deal falls apart, the ECB is going to be even more aggressive in monetizing things and create credit to insulate the banking system from a disorganized default," said James Dailey, portfolio manager of the TEAM Asset Strategy Fund. "It's basically a win-win for gold at ...

(Reuters) - Gold prices rose 1 percent on Tuesday as expectations that a Greek rescue deal will be completed drove the dollar down sharply against the euro. Bullion, which had dropped in early trade on nervousness about Greece, bounced and was on track for its biggest daily gain in two weeks as Greece's government was preparing a list of reforms needed to clinch a new financing package. Hopes for a bailout plan that would move Athens closer to avoiding a chaotic debt default boosted gold's inflation-hedge appeal. "If the deal falls apart, the ECB is going to be even more aggressive in monetizing things and create credit to insulate the banking system from a disorganized default," said James Dailey, portfolio manager of the TEAM Asset Strategy Fund. "It's basically a win-win for gold at ...

(Reuters) - Gold prices bounced back into positive territory on Tuesday, paring earlier losses in line with a rallying euro after a Greek official said the government is drafting an agreement on a second bailout. Spot gold was up 0.3 percent at $1,723.89 an ounce at 1502 GMT (10:02 a.m. EST), having earlier fallen as low as $1,709.29 an ounce, while U.S. gold futures for February delivery were up $1.70 at $1,726.60. A Greek government official said Greece's government is preparing the text of an agreement on a 130 billion euro bailout that will be put to political leaders for approval, suggesting Athens had largely wrapped up talks with lenders on the rescue. A conclusion to the discussions would likely to support gold, although it has struggled to maintain upward momentum as the ...

The Week Ahead : 24/12/2011 Highlights Final trading week of 2011 Data and event highlights ECB liquidity measures highlight fragility of EU banks Final trading week of 2011 Next week sees the final trading week for the year and we expect market interest to be significantly reduced due to major holidays on each end, likely leading to largely sideways drift. But reduced market participation also has the tendency to see spikes in volatility on news headlines and data reports, as fewer traders seek reduced liquidity in response to breaking events. In particular, we would note month/quarter-end fixing flows late in the week, where asset managers rebalance currency hedges. Our proprietary models suggest moderate USD selling overall against other major currencies. Fixing flows ...

As the global economic growth is being further damaged by the European debt crisis, while European leaders seam to be unable of finding a strong resolution to this problem, investors continue to avoid riskier assets and head towards the safe haven USD and treasuries. Yesterday the yields on the Italian rose to a record high at 6.47%, while the German yields fell to 0.29% as a sign that traders are heavily targeting safer investments. Today Spain is preparing to sell 3.5 billion euros of bonds maturing in 2016, 2020, and 2021. Fitch downgraded yesterday five major European banks, Banque Federative du Credit Mutuel, Credit Agricole, Danske Bank, OP Pohjola Group and Rabobank Group, and warned of a "broader phenomenon of stronger headwinds facing the banking industry as a whole". As Europe' ...