DEZ
METALS STOCKS
Gold falls despite record 2005 demand
Prices retreat after three-session climb of almost $14
Last Update: 10:27 AM ET Feb 22, 2006
SAN FRANCISCO (MarketWatch) -- Gold futures edged lower Wednesday morning, failing to find support from a report of record gold demand in 2005 after climbing over the past three trading sessions.
Gold for April delivery was down 90 cents at $555.70 an ounce on the New York Mercantile Exchange, trading near the session's high of $556. The contract gained almost $14 an ounce from Feb. 15 to Feb. 21.
"Despite a still rather mixed short-term outlook the combination of oil led inflation concerns and broad geo-political uncertainties should provide gold with good support in the coming sessions as traders and investors seek safe-haven assets," said James Moore, an analyst at TheBullion Desk.com in London.
Chart support remains pegged at $550 with resistance seen at $560/$568, he said in a note to clients.
Meanwhile, a report from the World Gold Council released Wednesday, which was compiled by GFMS Ltd., showed that gold demand reached a record level of $53.6 billion in 2005.
All categories of the demand -- jewelry, industrial and investment -- "recorded double-digit year-on-year growth in dollar terms," the report said.
The fourth quarter saw "substantial inflows of institutional investment into gold," it said, with investment in Exchange Traded Funds (ETFs) up by 79 metric during that quarter alone.
The report estimated that other institutional investment in the period approached 200 metric tons.
The rise in investment inflows had a "negative impact on jewelry demand and on retail investment due to profit taking," the report said.
But "overall demand in Q4 was sufficiently strong to absorb a 10% year on year increase in supply and a 12% increase in the price," it said.
The year "2005 has been a momentous year for gold demand, with record levels of consumer demand in dollar terms and a simultaneous surge in institutional investment," said James Burton, chief executive of the World Gold Council.
Most other metals on the New York exchange fell, with the exception of silver.
March silver futures traded up 2.5 cents at $9.565 an ounce.
April platinum was down $6.50 at $1,028 an ounce and sister metal palladium saw its March contract fall $6.50 to $287.50 an ounce. March copper fell 2.05 cents to $2.253 a pound.
On the supply side, copper inventories were down 696 short tons to 31,857 as of late Tuesday, according to the New York
Gold stocks were down 3,215 troy ounces at 7.53 million troy ounces.
Silver supplies were up 538,956 troy ounces at 126.8 million troy ounces.
On the equities side, the Amex Gold Bugs (HUI : amex gold bugs index equal-$ weight
News , chart, profile, more
Last: 319.84+0.66+0.21%
The CBOE Gold Index (GOX : CBOE Gold Index
News , chart, profile, more
Last: 134.65+0.55+0.41%
DEZ4.97, +0.63, +14.5%) are 16% higher at US$5.03 on the report that the company will be acquired by Yamana Gold Inc. (AUY : yamana gold inc com
News , chart, profile, more
Last: 8.44-0.14-1.63%
AUY8.44, -0.14, -1.6%) For each of their shares, DSM holders will receive 0.6 Yamana share. Based on the five-day weighted-average price of Yamana's shares, the deal values DSM at C$5.47 a share, a 21% premium over DSM's five-day weighted-average price, the companies said. Read more.
Myra P. Saefong is a reporter for MarketWatch in San Francisco.
|
