Asian Gold Trust ETF (NYSE:AGOL) New, Gold Shares ETF (NYSE:GLD), Comex Gold Trust Fund (NYSE:IAU), Swiss Gold ETF (NYSE:SGOL), Gold ETF (LSE:BULL), Comex Gold ETF (TSX:IGT)

The Overall Fundamentals

Players attention shifts from chaos in the MENA region, to natural disaster in Japan

Player attention shifted from the Middle East and North Africa to Japan’s huge earthquake on Global economic growth.

This coming week, the aftershock of Japan’s earthquake will be one of the Key issues, the BOJ will hold a policy board meeting on March 14, a day earlier than previously scheduled.

The US Fed’s FOMC will also meet later in the week for policy discussion. I believe Key interest rates will stay unchanged, and the asset-purchase plan will be kept at US$600+.

Though the Bank of Japan (BOJ) has set up an emergency task force, and pledged to provide liquidity, the disaster will delay the recovery of the World’s 3rd largest economy.

Gold futures on the COMEX Division of the New York Merc rebounded Friday, narrowing the 1st weekly loss since January on safe-haven demand.

The most active Gold contract for Apr delivery rose 9.3 oz, or 0.66%, to settle at 1,421.8 oz.

Gold prices closed off 0.5% last week, after hitting a record 1,445.7 oz on March 7.

Silver for May delivery gained 86.9c, or 2.5%, to 35.935 oz. and Apr Platinum rose 16.1c, or 0.9%, to 1,781.7 oz.

Crude Oil prices initially extended the Strong rally of the past few weeks as tensions in the MENA region escalated.

Prices reversed into week’s end on profit-taking as focus shifted to macro-economic data and sovereign risks in the EuroZone.

During the week, the front-month contract for WTI Crude Oil price was -3.12% to settle at 101.16 while Brent Crude contract lost -1.84% to 113.84.

The widening of WTI-Brent spread resumed Wednesday as US Crude Oil inventory rose more than expected.

More on Gold, Silver and Crude Oil

Gold rallied to a record high of 1445.7 last Monday but profit-taking then drove the metal lower Thursday by 40$’s

The price rebounded strongly Friday as Japan’s earthquake and sovereign concerns in the EuroZone on safe-haven demand.

Silver, following Gold’s coattail, also drifted lower after making a new 31 yr high last Monday. The metal’s rebound Friday managed to recoup all losses made in the middle of the week.

The PGMs, both Platinum and Palladium prices slipped as players feared that potential slowdown in growth would limit demand for them.

From our POV here at LTN, both Shayne and I expect the Gold’s price has further room to rise as factors including geopolitical tensions inflationary worries and sovereign crisis concerns remained.

Last week, Moody’s downgraded Greece’s sovereign rating by 3 notches to B-1 as the country’s default risk has ‘materially increased’.

While the government will likely ‘achieve its objectives’ and ‘will not need to impose losses on credits’, the agency believes there are ‘material risks to that outcome’.

The new rating suggests Greece has a 20% chance of default across a 5-yr time line. A few days later, it announced a downgrade on Spain’s rating by 1 notch to Aa-2.

The agency now expects Spanish banks will need as much as 50B Euro to meet new capital requirements, more than double the 20B Euro projected by the government.

Moody’s put the country in ‘negative’ outlook as risks to public finances are ‘skewed to the downside’. EU members began a meeting Friday.

One important issue on the agenda is to discuss measures to help debt-ridden countries

Crude Oil

The impact of Japan’s earthquake is huge, as the demand/supply balance of the energy market has also been disrupted.

As reported so far, 12.5 GW of Nuclear power generation capacity, or 26% of total available capacity, and 935K BPD of refining capacity, or 20% of total, are shut down.

Due to closures in refiners and restricted imports, regional Crude Oil prices will come under pressure, but the impact on Crude Oil prices will be temporary I believe.

So, expect to see upsides again as soon as refineries resume operations + continued disruption in Nuclear generation during the time frame will place more upward pressure on Crude Oil prices IMO.

Saudi Arabia’s Day of Rage turned out to be a non-event Friday as the government deployed police to prevent any riots from escalating.

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Posted by Shayne Heffernan on Mar 13th, 2011and filed underEquities, Latest News, Markets, USA.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site