Media Quotes

Adam Sarhan Gold Quote: Gold Settles at $1619 With Talks of Fed Action

Published: Monday, 30 Jul 2012 | 4:04 PM ET
The metal gained 2.5 percent last week, its biggest weekly performance in eight, after European Central Bank President Mario Draghi pledged to do whatever is necessary, within the ECB’s mandate, to prop up the euro.
ECB insiders said bold action including resuming the central bank’s bond-buying program and even pursuing quantitative easing , or the printing of new money to boost asset prices, is at least five weeks away.
A string of weak U.S. economic indicators has prompted economists to increase expectations that the Fed was exploring new tools to support growth.
“Should we not pass upwards of $1,640, should we get Fed disappointment of doing little prior to September, we could have a good setback,” said George Gero, vice president of RBC Capital Markets.
The Federal Reserve  will deliver its policy statement at the end of its two-day Fed Open Market Committee (FOMC) meeting on Wednesday, while the ECB  and Bank of England are scheduled to hold policy meetings on Thursday.
Spot gold [XAU=  1618.40    -2.09  (-0.13%)   ] fell 84 cents to $1,622.00 an ounce.
Adam Sarhan, CEO at Sarhan Financial, said the metal is expected to move sideways unless it breaks above a downward-sloping trendline on weekly charts at around $1,670, or if gold falls below support at $1,523.
U.S. gold futures [GCCV1  1621.80    2.10  (+0.13%)   ] settled up $1.70 an ounce at $1,619.70, with trading volume largely on track to be in line with its 30-day average, preliminary Reuters data showed.
Physical Demand Still Soft
While the wider markets set gold’s direction, underlying demand for the metal remained soft. Buying in major consumer India was lackluster as high prices in the country, exacerbated by weakness in the rupee, kept local buyers on the sidelines.
The world’s biggest gold-backed exchange-traded fund  , SPDR Gold Trust, reported a fifth consecutive weekly outflow from its holdings on Friday, its longest such run of losses in about 18 months.
The fund was on track for its biggest monthly outflow this year in July, of 30.9 tonnes. Among other precious metals, silver and platinum group metals rose.
All three metals have been underperforming gold so far this year. Silver [XAG= 28.06    -0.08  (-0.28%)   ] gained 1.7 percent at $28.20 an ounce, set for its first monthly gain in five.
Its run of four straight monthly losses to June was its longest such streak since 2000. Spot Platinum [XPT=  1416.24    5.79  (+0.41%)   ] added 0.7 percent at $1,411.75 an ounce, while palladium [XPD=  585.22    1.77  (+0.3%)   ] rose 2.1 percent to $584.00 an ounce.