Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20
QE4EVER! - 9th Sep 20
AMD Ryzen Zen 3 4800x 10 Core 5ghz CPU, Cinebench Benchmark Scores (Est.) - 9th Sep 20
Stock Traders’ Dreams Come True – Big Technical Price Swings Pending on SP500 - 9th Sep 20
Should You Be Concerned About The Stock Market Big Downside Rotation? - 9th Sep 20
Options Traders Keep "Opting" for Even Higher Stock Market Prices - 8th Sep 20
Gold Stocks in Correction Mode - 8th Sep 20
The law of long-term time preference and Gold ownership - 8th Sep 20
Gold Bull Markets: History and Prospects Ahead - 8th Sep 20
Sheffield City Centre Coronavirus Shopping Opera Ahead of Second Covid-19 Peak - 8th Sep 20
Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
From Trump’s TikTok Mess to US Tech Cold War against China - 7th Sep 20
The Federal Reserve vs. Judy Shelton And Gold - 7th Sep 20
Fed Dials Up Inflation Target…Own Gold - 7th Sep 20
Does Gold Still Have Plenty of Potential? - 7th Sep 20
CDC Shock Admission - THERE IS NO PANDEMIC! Over 90% of Deaths NOT From COVID19 - 7th Sep 20
Stock Market SPX to Gold/Silver Ratios Explored – What To Expect Next - 7th Sep 20
Is the Precious Metals Market really Overwhelmed and Chaotic - 7th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold Falls Ahead of Bernanke Testimony

Commodities / Gold and Silver 2010 Feb 24, 2010 - 08:20 AM GMT

By: Adrian_Ash

Commodities

THE PRICE OF GOLD in the wholesale market fell again on Wednesday in Asia and London, erasing the final $7 of last week's 3.4% gain for US investors as the Dollar held steady ahead of Fed chairman Ben Bernanke's two-day testimony on banking reform and his zero-interest-rate policy.


European stock markets reversed a slight drop by lunchtime, while government bonds ticked higher and crude oil fell through $79 per barrel.

Silver bounced higher from $15.67 an ounce for the second time in a week.

"Since the Chinese New Year, there has been little buying interest in the physical gold market, which seems to have capped upside," says Walter de Wet at Standard Bank.

"We anticipate to see range trading [in gold] between $1165 and $1050 in the weeks to come," says Axel Rudolph in his Bullion Weekly for Luxembourg's Commerzbank.

UK buyers saw gold slip to a one-week low of £710 an ounce in morning trade Wednesday.

The Euro-price traded 3% below last week's record peak, turning higher from €804 an ounce.

"I hate living in a world where gold is the only security remaining, but people have lost optimism, and I do not see anything to break this trend," said Peter Munk, founder and chairman of the world's largest gold producer, Barrick Mining, at an investor meeting in Zurich on Tuesday.

"What drives gold is a changing world," Munk is quoted by the Tages Anzeiger newspaper.

"We sit here at the beginning of a new world."

Greek schools, airspace, ports, trains and government offices were closed Wednesday as "hundreds of thousands" civil servants took to the streets in protest against the government's austerity program, aimed at cutting the budget deficit from almost 13% to 8% of gross domestic product over the next 12 months.

Germany also breached Eurozone deficit rules in 2009, new data showed today, with government spending exceeding tax receipts by 3.3% of GDP.

"This year it is going to go up quite a bit, to 6% or just below," reckons Goldman Sachs' chief economist in Frankfurt, Dirk Schumacher, because "Unemployment will increase further."

Spanish banks BBVA and Santander saw their shares fall towards new 7-month lows after Barclays Capital analysts downgraded their outlook to "[reflect] market concerns for a more severe and prolonged downturn in Spain."

Fitch Ratings declared a complex €200 million mortgage-backed security originated by Germany's Hypo Real Estate to have triggered an "event of default", saying it expects Euromax IV "to be the first of several" such European structured finance notes to breach their terms.

Reuters says the European Central Bank is planning to extend its unlimited loan facility for Eurozone banks when it meets next week.

"It all depends on how market conditions develop, nothing has been decided yet," the newswire quotes its un-named source.

Heavy sellers of their "Legacy" Gold Reserves from the late 1980s to 2008, West Europe's central banks have virtually halted their bullion sales according to new data from the mining-financed World Gold Council.

Excluding the International Monetary Fund's gold sale of 213 tonnes – made to India, Sri Lanka and Mauritius between Oct. and Nov. – signatories to the latest Central Bank Gold Agreement have sold only 1.6 tonnes of gold since Sept.

The 18-member agreement limits total gold sales to 400 tonnes per year until 2014. It says IMF sales will be "accommodated within the ceilings."

The IMF said last week it wishes to sell a further 191 tonnes of gold in the open market as part of a refinancing program agreed before the global banking crisis spread to sovereign governments, thus reviving the Washington body's role as advisor and lender of last resort.

"It is not feasible for China to buy the IMF bullion, as any purchase or even intent to do so would trigger market speculation and volatility," said an official from the China Gold Association to the China Daily today.

Speaking on condition of anonymity, he said China would continue to buy gold direct from its domestic gold mining industry – now the world's No.1 by volume.

"The RBI doesn't want to take a credit risk as there are concerns on the Dollar and Euro now," said an un-named official at the Reserve Bank of India to Reuters early on Wednesday.

"Gold is a safe bet...We buy at market prices [and] are closely looking at the gold market."

The world's No.1 consumer market for physical gold, Indian household demand "enjoyed a solid recovery [after] an extremely weak first quarter" in 2009, says the World Gold Council, analyzing data from London's GFMS consultancy – the leading information providers for the global gold industry.

Unlike China, India has almost no domestic gold mining output.

India's private-household gold demand rose 13% by volume and 57% by value between Oct. and end-Dec. from the same period in 2008, say the GFMS figures.

During full-year 2009, mainland Chinese households grew their physical gold demand 9% by volume and 22% by value. Gold investment demand for bars and coins surged 37% to equal $2.5 billion.

By Adrian Ash
BullionVault.com

Gold price chart, no delay | Free Report: 5 Myths of the Gold Market
Formerly City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at www.BullionVault.com , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2010

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules