Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24
RECESSION When Yield Curve Uninverts - 8th Sep 24
Sentiment Speaks: Silver Is Set Up To Shine - 8th Sep 24
Precious Metals Shine in August: Gold and Silver Surge Ahead - 8th Sep 24
Gold’s Demand Comeback - 8th Sep 24
Gold’s Quick Reversal and Copper’s Major Indications - 8th Sep 24
GLOBAL WARMING Housing Market Consequences Right Now - 6th Sep 24
Crude Oil’s Sign for Gold Investors - 6th Sep 24
Stocks Face Uncertainty Following Sell-Off- 6th Sep 24
GOLD WILL CONTINUE TO OUTPERFORM MINING SHARES - 6th Sep 24
AI Stocks Portfolio and Bitcoin September 2024 - 3rd Sep 24
2024 = 1984 - AI Equals Loss of Agency - 30th Aug 24
UBI - Universal Billionaire Income - 30th Aug 24
US COUNTING DOWN TO CRISIS, CATASTROPHE AND COLLAPSE - 30th Aug 24
GBP/USD Uptrend: What’s Next for the Pair? - 30th Aug 24
The Post-2020 History of the 10-2 US Treasury Yield Curve - 30th Aug 24
Stocks Likely to Extend Consolidation: Topping Pattern Forming? - 30th Aug 24
Why Stock-Market Success Is Usually Only Temporary - 30th Aug 24
The Consequences of AI - 24th Aug 24
Can Greedy Politicians Really Stop Price Inflation With a "Price Gouging" Ban? - 24th Aug 24
Why Alien Intelligence Cannot Predict the Future - 23rd Aug 24
Stock Market Surefire Way to Go Broke - 23rd Aug 24
RIP Google Search - 23rd Aug 24
What happened to the Fed’s Gold? - 23rd Aug 24
US Dollar Reserves Have Dropped By 14 Percent Since 2002 - 23rd Aug 24
Will Electric Vehicles Be the Killer App for Silver? - 23rd Aug 24
EUR/USD Update: Strong Uptrend and Key Levels to Watch - 23rd Aug 24
Gold Mid-Tier Mining Stocks Fundamentals - 23rd Aug 24
My GCSE Exam Results Day Shock! 2024 - 23rd Aug 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold & Silver Rally to Unchanged for the Week as Bangladesh Buys IMF Gold

Commodities / Gold and Silver 2010 Sep 10, 2010 - 05:13 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD rallied on Friday after falling 1.5% from Wednesday's near-record levels on news that the Bangladesh central bank bought 10 tonnes of bullion from the International Monetary Fund.

Some 222 of the 403 tonnes the IMF has been looking to sell since Sept. '09 have now gone to central banks, according to Bloomberg, led by India's 200-tonne purchase last Oct.


Tuesday's gold sale to Bangladesh was done "on the basis of market prices" the IMF says.

By the AM Gold Fix in London, gold was trading at $1248.75 per ounce. Silver was also unchanged for the week, trading at $19.89.

"Whenever these [central-bank] things come out, they tend to be relatively supportive of the gold price," says Darren Heathcote at Investec Bank in Sydney, Australia.

"It will add more support to what is already a well-supported market."

"The bulk of emerging economies are overweight US Dollars and underweight gold bullion," says the latest analysis from ANZ Commodity Research.

"China is a good example, which could consume the global annual supply of gold mining production and still only hold 5% in gold to total foreign reserves."

Friday's Asian gold trading was "typically quiet" according to one Hong Kong dealer, but "speculative selling" by Chinese traders was matched by buy-orders on the electronic Globex platform.

"Physical gold was also well bid."

Driving gold's recovery from July's dip, "There has been a reversion to the strong relationship between European [credit default swap] rates, the weakness of the Euro and the price of gold," say analysts at French bank Natixis in their Commodities Weekly.

Last month, CDS rates on the "PIIGS" government debt (Portugal, Italy, Ireland, Greece and Spain) jumped by 50%, the bank notes. "The price of gold denominated in Euros jumped 8% from €900/oz to €980/oz."

The gold price in Euros today edged back to that level, down 1.5% from Wednesday's 10-week high.

Eurozone stock markets fell as reports spread that Germany's giant Deutsche Bank is a about to ask shareholders for €9 billion ($11.4bn) to meet the new "Basel III" capital requirements.

Analysis from Merrill Lynch says a further 14 Eurozone banks may lack the necessary Tier 1 capital to meet the new rules.

National Bank of Greece already made a "cash call" on its stockholders this week, asking for €2.8bn.

"As markets gradually stabilize, our non-standard measures...will continue to be progressively phased out," claimed European Central Bank president Jean-Claude Trichet on Friday, speaking to the Financial Times.

"But it is a process which takes time."

Over in Tokyo, new minutes from the latest Bank of Japan meeting showed, policymakers are increasingly worried that "the appreciation of the Yen might depress growth in exports and corporate profits."

The Yen rose half-a-cent to the Dollar this morning, but held shy of Wednesday's new 15-year high.

US Treasury bonds meantime rallied from Thursday's drop following the weak demand for a new auction of 30-year debt.

Crude oil rose once again, hitting $75.91 per barrel on the WTI contract.

"The price of gold should be reflective of where we are in terms of what's happened, what's happening in the global economy, and the expected ongoing demand for gold," says Patrick Connolly of AWD Chase de Vere, interviewed on MineWeb's latest podcast.

"But markets and be they equity markets, or be they markets in commodities, do not act rationally – they tend to overshoot at the top end, and actually get over pessimistic at the bottom end.

"Gold is a rally – it's a sustained bull rally. [But] nobody knows if that stops today, tomorrow in a month, in a year, in five years or 10 years time."

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.


© 2005-2022 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