Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Federal Reserve Rising Interest Rates Positive for Gold?

Commodities / Gold and Silver 2010 Mar 16, 2010 - 06:47 AM GMT

By: GoldCore

Commodities Best Financial Markets Analysis ArticleGold dipped to $1,101.15/oz in early US trading before recovering to close with a gain of 0.37% despite continuing dollar strength. It rose in Asian trading and has range traded from $1,109/oz to $1,113.50/oz so far in European trading this morning. Gold is currently trading at $1,114.00/oz and in euro and GBP terms, gold is trading at €813/oz and £739/oz respectively.


Gold may challenge resistance at $1,119/oz and above that is resistance at $1,128/oz. Technical support is at $1,100/oz and recent action is leading to increasing confidence that gold will remain above the psychological level of $1,000/oz for the foreseeable future.

Asian equity markets were mixed but Eu rope's have gotten off to a positive start. Markets await the Federal Reserve rates decision and FOMC statement later today and they should provide direction. Debate is heating up within the Federal Reserve over how and when to signal that the days of record-low interest rates are numbered. Federal Reserve Chairman Ben Bernanke and his colleagues may soon communicate subtly that higher rates are coming once the economic recovery is on a firmer footing. There is a growing realization that Fed policymakers will soon need to start increasing rates to head off inflation and protect the value of the dollar and the US' credit rating.

In the short term an increase in interest rates could be negative for gold. But, in the medium to long term rising interest rates are likely to be positive for gold as they were in the 1970s. When interest rates return to more normal levels (above 5%) then gold would be vulnerable to a correction as savers and bondholders become enticed by higher yields.

We are a long way from there yet and gold is likely to be correlated with rising interest rates and only fall towards the end of the interest rate hiking cycle. It is worth remembering that the 1970s gold bull market only ended with interest rates close to 20%. Also rising interest rates are not positive for equities and property and volatility and or further falls in these asset classes could lead to further safe haven demand for gold.

Silver
Silver has range traded from $17.14/oz to $17.28/oz this morning in Asia. Silver is currently trading at $17.27/oz, €12.61/oz and £11.46/oz.

Platinum Group Metals
Platinum is trading at $1,626/oz and palladium is currently trading at $465/oz. Rhodium is at $2,535/oz.

News
Prime minister Gordon Brown has been warned by the European Commission to take more action to reduce Britain's soaring debt burden, according to early drafts of Brussels' latest assessment of the UK's finances. The European Commission reports comes just a week before the pre-election Budget, which will be dominated by the size of the UK's debts and how they are going to be cut. The EC's main concern is official growth forecasts may be too optimistic and they also warn regarding the size of the UK government's support for the banks.

Crude oil is stable just below $80 after falling some 2% yesterday. OPEC may be able to leave output unchanged for 2010 if the global economic recovery continues and the oil market remains well balanced according to Saudi Arabia's oil minister.

Japan's central bank began a two-day monetary policy meeting today amid speculation it may announce fresh emergency measures to spur an economic recovery hobbled by deflation and weak demand. The Bank of Japan is widely expected to hold interest rates unchanged at 0.1% - a rock-bottom rate it has kept since December 2008, during the worst of the global financial crisis - to keep credit flowing in the economy.

Europe's finance ministers have agreed how to help Greece in its battle to control its finances. After a meeting in Brussels, they revealed few details, except that they had ruled out any loan guarantees.

This update can be found on the GoldCore blog here.

Mark O'Byrne

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 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