Analyst Moves: BJRI, LULU

BJ’s Restaurants (BJRI) was rated a new overweight today by Morgan Stanley (MS) with a price target of $59. The brokerage expects above average growth at the company during the upcoming quarters.

Research in Motion Earnings Preview

Research in Motion (NASDAQ:RIMM) is scheduled to release its fourth quarter earnings after the close today.The company is expecting EPS of $0.81 per share and revenues of $4.54 billion.RIM has been struggling in the mobile business falling behind the iPhone and Android.This will also be the first earnings release for the company’s newly appointed CEO, Thornstein Heins.Research In Motion (NASDAQ:RIMM) has potential upside of 15.8% based on a current price of $13.59 and an average consensus analyst price target of $15.74.

Europe Sets Firewall Kitty at 500 Billion


Tradervox (Dublin) – European Finance Ministers have capped the firewall kitty at 500 billion Euros after Germany led a coalition to oppose a further expansion of the region’s firewall power.  This comes as a shock to traders who were expecting a consensus in building a larger firewall kitty. However, the 500 billion lending capacity excludes the 300 billion Euros already given to Ireland, Greece, and Portugal.

Therefore the overall size up to 2013 will be 800 billion Euros but after that the kitty will be at 500 billion Euros. The Finance Ministers did not approve the use of the remaining 240 billion Euros in the EFSF but they indicated that the money would be used to add to the ESM kitty to its full amount of 500 billion dollars.

Austrian Finance Minister Maria Fekter was the first to talk to the press at the meeting indicating that the European leaders have now acted as expected by the IMF and as agreed at the G-20 meeting. Maria Fekter was also quick to add that the sum fixed is important and now the EU is expecting the pledges from the IMF to follow. Euro zone is counting on the pledged amount and the 1 trillion Euros injected by the ECB as a stimulus package.

This new development will affect the bullish trend of the euro as it was expected that the European leaders would endorse an expansion of the kitty to 940 billion Euros. Dutch Finance Minister Jan Kees de Jager indicated that incase the 500 billion in fresh capital is not available the region guarantees the availability of the 240 billion Euros in the EFSF. In reality, this is the only amount that is available excluding the 308 billion Euros that have already been committed to Portugal, Ireland and Greece.

The Chairman of the Finance Ministers meeting canceled his press briefing after the Austrian Finance minster talked to the press before him. Traders are looking forward to a formal statement from the Chairman of the Finance Ministers Jean-Claude Juncker.

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Research in Motion Announces Earnings

BlackBerry maker Research in Motion (RIMM) reported fourth quarter profit and revenue below analyst estimates. The company reported a net loss of $125 million, or 24 cents per share, on a GAAP basis, on revenue of $4.2 billion, 19% lower than a year earlier.

Gold Prices Set to Decrease

Source: ForexYard


• Below is the 4-hour chart for the Gold by ForexYard.

• The indicators used are the MACD, Slow Stochastic and RSI.

• Point 1: The Slow Stochastic shows a bearish cross, signaling that the next move may be in a downward direction.

• Point 2: RSI signals that the price of this pair currently floats in the over-bought territory, indicating downward pressure.

• Point 3: The MACD indicates a bearish cross, which supports the downward notion.

• If the impending breach is indeed downward, going short with tight stops appears to be preferable strategy in the next few days.

Gold 4 hour Chart

Forex Market Analysis provided by ForexYard.

© 2006 by FxYard Ltd

Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.

Silver Avoids 4th Straight Quarterly Loss, Gold Heads for Gains, India’s Imports “Overstate Trade Deficit”

London Gold Market Report
from Ben Traynor
Friday 30 March 2012, 09:00 EDT

U.S. DOLLAR gold bullion prices hit $1669 an ounce ahead of US trading, more or less in line with where they started the week.

Stocks and commodities edged higher and US Treasuries dipped, while the Euro gained ahead of today’s Eurozone finance ministers’ meeting in Copenhagen.

Silver bullion meantime rose to $32.61 – a gain of 1% from the start of the week.

Heading towards the end of the first quarter of the year, gold bullion prices looked set to record their highest ever quarter-end London Fix of in Dollars, Euros and Sterling.

Silver meantime avoided a fourth straight losing quarter, positing gains of 15% in Dollars, 11% in Sterling and 11.6% in Euros.

However, most of the net gains in gold and silver for Q1 came in the first week of January, with gold having fallen sharply since gold failed to break $1800 last month.

“The physical market has stopped playing an important supportive role,” one Singapore dealer told news agency Reuters this morning.

“There is so much physical material, yet we don’t see any good offtake, as people are worried that it’s not the right time to invest in gold now…we don’t expect to see real physical demand until prices drop below $1600.”

Many Indian gold dealers remained on strike Friday, having closed their stores for the past fortnight following the Union Budget on March 16 which doubled the import duty on gold bullion and introduced a 1% tax on gold jewelry sales.

India’s government has said it is reviewing the gold sales tax, but finance minister Pranab Mukherjee says the import duty hike will not be reversed.

India imported an estimated 969 tonnes of gold bullion in 2011, according to World Gold Council data.

Including gold bullion imports in its trade figures may be “overestimating” India’s current account deficit problem, according to Rajeev Malik, senior economist at Asia-Pacific investment group CLSA.

“Although it is technically correct to include gold imports and exports in the current account balance as per IMF guidelines,” Malik says, “we peg the ‘overestimation’ of the current account deficit due to net gold imports to be around 20 to 30%.”

“The close to $200 billion in imported gold over the past decade does not represent a drain on India’s resources,” adds Taimur Baig, chief economist India, Indonesia and Philippines at Deutsche Bank.

“Rather [it is] a diversification of India’s wealth into precious metals.”

One senior gold industry figure, Rajan Venkatesh of bullion bank Scotia Mocatta, suggested this week that the Indian government could encourage gold certificates and other measures to encourage people to deposit gold with the banking sector.

Turkey meantime, which like India has a current account deficit and satisfies much of its gold consumption via imports, is also considering proposals designed to encourage the growth of gold deposit accounts in its banking sector.

“Turkey has historically been affected by repeated currency crises and resultant inflationary pressures, hence households traditionally hold substantial amounts of gold,” says the latest precious metals note from French bank Natixis.

This week, Turkey raised the proportion of Turkish Lira reserves banks can hold as gold from 10% to 20% – while cutting the proportion of foreign exchange reserves that can be held as gold from 10% to zero.

Combined with the move to encourage gold deposits with banks, the moves represents “an easing of monetary conditions, as well as enabling the Turkish banks to bolster their balance sheets through the use of a cheap source of capital,” says Natixis.

Back to Friday, and “focus is firmly on the Eurozone,” says a note from Marc Ground, commodities strategist at Standard Bank.

“We expect precious metals to follow the gyrations of the Euro/Dollar as markets react to speculations and/or announcements on this front.”

Eurozone finance ministers were today expected to approve combining the €440 billion temporary European Financial Stability Facility with the €500 billion permanent European Stability Mechanism when the latter becomes operational in July.

The move is aimed at raising Europe’s so-called ‘firewall’ against sovereign debt contagion, which was identified at last month’s G20 meeting as a prerequisite for additional International Monetary Fund aid.

“If the investors deem the plan as sufficient in reducing near-term Eurozone liquidity issues, we believe risk assets including gold may benefit,” says a note from HSBC today.

Since many Eurozone policy announcements have already been leaked, however, any moves in gold and silver prices are likely to be “knee-jerk reactions, rather than signal a new longer-term trend” says Standard Bank’s Ground.

Spain, which was hit by a general strike yesterday, was due to unveil a so-called austerity budget Friday.

Norway’s $610 billion sovereign wealth fund meantime – which owns 2% of all European stocks – is to cut its exposure to Europe from 60% of its assets to 40%, the Financial Times reports.

Iran has been helping Syria to ship oil to China in defiance of Western sanctions, Reuters reported today.

Ben Traynor

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

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