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
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Jump Again as Fed Threatens to Print Money

Commodities / Gold and Silver 2010 Oct 05, 2010 - 08:46 AM GMT

By: Adrian_Ash


Best Financial Markets Analysis ArticleTHE PRICE OF SILVER and gold bullion leapt overnight in Asian and early London trade on Tuesday, hitting new highs vs. the Dollar as world stock markets also rose on fresh promises of quantitative easing on either side of the Pacific.

Both the central banks of Australia and Japan defied analyst expectations – and Asian Gold Dealing "finally saw a little volatility" said one Hong Kong dealer – by failing to raise and by slashing their interest rates respectively.

Overnight rates were left at 4.50% by the Reserve Bank of Australia, while the Bank of Japan cut its key lending rate from 0.1% to 0.0%.

Tokyo also opened the door to a new round of money creation, establishing a new "asset purchase program" worth an initial ¥5 trillion ($60bn).

Most critically, notes Diapason Commodities' Sean Corrigan, "They've lifted the long-standing bank note vs. JGB cap" – under which the central bank would only buy Japanese government bonds to the value of bank-notes in issue, rather than "monetizing" Tokyo's debt and moving towards "turning all titles [to financial assets] into money."

Over in the United States too, "QE II looks as if it is coming," says Steve Barrow at Standard Bank today, "and there's not much that [Friday's] payroll data can do about it."

"I think it is fair to say that [quantitative easing] is an imperfect policy tool," said the New York Federal Reserve's Brian Sack – head of the US central bank's bond-buying program – in a speech on Monday.

But ahead of Nov.'s widely-expected return to quantitative easing by the Fed, however, "Balance-sheet expansion appears to push financial conditions in the right direction," Sack went on, "in that it puts downward pressure on longer-term real interest rates and makes broader financial conditions more accommodative.

Speaking to college students yesterday, Fed chairman Ben Bernanke also called quantitative easing "an effective program."

Back in the gold and silver markets, meantime, "[Precious metals] had dipped briefly and quickly rebounded – a sign of a short market," says one Japanese broker in a note.

"The Bank of Japan's rate-move was the trigger that started traders' short-covering" – i.e. buying gold and silver to cover the bearish positions they already had in place.

Gold priced in Japanese Yen jumped this morning to a 16-week high above ¥3,567 per gram.

Australian investors looking to Trade Gold today saw the price rise 1.8% to a 5-week high of A$1385 per ounce.

"Last week's anticipated correction lower [in Gold Prices] was very short-lived indeed," says Commerzbank's Axel Rudolph in his weekly report today.

"We will therefore remain bullish," says Commerzbank's technical analyst, for as long as gold trades above last week's low of US$1280.70 per ounce.

"Projected upwards from the March low" and on a short-term view of 1-3 weeks, "$1350.50 [is] in sight."

By the start of New York trade on Tuesday, the US-Dollar gold price stood above $1331 per ounce, some 15% higher from the low hit in late July.

Elsewhere on Tuesday, silver prices jumped to fresh three-decade highs above $22.40 per ounce, adding almost than 3.1% during the first 3 trading days of October alone.

Major-economy government bonds held flat overall, while Japanese stocks rose 1.5% and European equities added almost 1% on average.

Crude oil rebounded to $82 per barrel, while the broader commodity markets also rose.

By Adrian Ash

Gold price chart, no delay   |   Buy gold online at live prices

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 , 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 - 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