:: Gold Struggles for Traction as Bulls Wait on Fed and ECB

Gold prices had slipped during the Wall Street trading session but appeared to be gaining steam towards the trading day’s close, with the spot price of gold up 3.35 to $1597.20 per ounce. Since last week when gold prices saw their largest single day’s rally in three years on speculation that the recent dismal employment data could spark another round of QE from the Fed, the commodity has struggled to breach $1,600. Since the beginning of the year, following a 10% price rally in January, prices have steadily declined every month to the point where they are not essentially flat on the year.
However, in a note to clients, one analyst from Goldman Sachs said that they expect that soft economic data from the U.S. will continue to push up gold prices, though there is a limit to any upside gains. That leads into Ben Bernanke and the Fed; another Goldman Sachs analyst said that they believe that the Fed is likely to offer some easing later this month, with the probability rising to 23% from May’s 10%. During his testimony before the U.S. Congress late last week, Ben Bernanke was expected to lay out the Fed’s plans to stoke the economy but quashed those hopes when he made no reference to future easing.
One commodities analyst says that the events in the Eurozone aren’t factoring into gold prices as much as one would expect, and that the markets are really anxious for QE, whether from the Fed or the ECB. The Commodity Futures Trading Commission however showed that net long positions in gold have increased by nearly 30%.

OpenBook’s Aussie Bulls Buy on Dip as China’s Trade Balance Surprises

China’s General Administration of Customs earlier reported that January’s trade balance rose to a 27.30 billion surplus from December’s 16.52 billion, well above the consensus call for a decline to 10.40 billion. With China being Australia’s largest export partner, the news struck the AUD/USD pair almost immediately, which fell from a recent 6-month peak of $1.0845 to 1.0715 as of this writing; sentiment on OpenBook favors bulls by a 2-to-1 ratio as traders look to buy at the dip. Also weighing on the commodity-linked currency is growing doubts that Greece will be able to survive given the harsh austerity demands required as a prerequisite to the next bailout loan.

Trader nurmohd, who just started trading on OpenBook, has successfully executed 15 trades in the pair, and his 100% allocation to the Aussie-Dollar has returned 110% profit. In the past 24-hours this trader has opened and closed both longs and shorts, with each trade returning a profit of no less than 92% with the highest trade returning 126%. Whether this string of successes could be chalked up to beginner’s luck isn’t obvious, but close watching of this trader is clearly warranted.

According to the report imports dropped 15.3% in January as compared to the previous year, while exports dropped 0.5%. Analysts point out that the Chinese trade data could be deceiving, distorted by seasonal data and last month’s Lunar New York holiday and that overall demand remains positive. GDP is expected to accelerate given that Beijing has begun implementing stimulatory measures.

OpenBook trader powerfrank from Germany closed a short position in the pair to a 43.7% return; this trader with 104 followers and 9 copiers has recorded a 160% profit over the past six months. This trader allocates 70% to currencies and 30% to commodities, with the AUD/USD allocation representing 2.5% of the portfolio, and the return on it has been 9.3%.

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OpenBook’s Gold Bulls Anticipate the Return of $1800

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February 7th, 4:18 pm
Friday’s unexpectedly improved U.S. labor data helped to bring about a strong rebound in gold prices. Gold traders took advantage of an earlier 2% price drop – the largest single day decline in a month – to buy into gold bullion which gained 0.6% earlier in the Asian session, and was trading at $1,736 per ounce. On the OpenBook, long positions outnumber shorts by a ratio of more than 4-to-1.
Over the past 24-hours, trader javiviveloz has closed out more than a dozen positions in gold, both longs and shorts with an average return of more than 6% and some as 9.97%.  This trader, who has 437 followers and 87 copiers, trades only in commodities. He allocates 81.8% of his portfolio to gold and the remainder to silver and currently has several long gold positions open, which would not need too big a rally to see gains. Over the past 3-months, this trader has seen his P&L rise 62.7%, and would be a good choice for those OpenBook traders who are considering branching away from currencies.
Uncertainty over the Greek situation, specifically, and the Eurozone, in general, is likely to continue to support gold prices. Analysts say that the uncertainty is likely to compel the majority of the world’s central banks to maintain a more accommodative monetary policy. While the likelihood of any additional quantitative easing from the U.S. is less likely now given the labor data, the outlook remains supportive of gold prices in light of the Fed’s commitment to low-interest rates for an extended time.
OpenBook trader XenderX expects that gold prices will likely hit $1800 before the trading day ends, and has opened up two long positions in anticipation. This primarily high-risk trader is on the verge of returning a 474% profit for the last six months, and allocates 36.5% of his portfolio to gold with another 17% to silver; the allocation has returned 16.8% and 18.8%, respectively, over the last quarter.