Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Slips Amid Critical Week as Emerging Markets & US Investors Fear "Credibly Reckless" Fed

Commodities / Gold and Silver 2010 Nov 02, 2010 - 09:44 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE PRICE OF GOLD retreated from an overnight rally to $1360 an ounce in London on Tuesday lunchtime, slipping back as European stock markets rose for the second day running.

The Euro jumped above $1.40 on the currency market following stronger-than-expected German manufacturing data.



Sterling fell hard on weak UK construction figures, however – taking the gold price in British Pounds back to Monday's 1-week high of £851 an ounce – while crude oil rose together with major-economy government bonds.

Silver prices sat tight around $24.80 an ounce.

"Since seasonality points towards a higher gold price during November," says technical analyst Axel Rudolph at Commerzbank today, "we believe that any corrections will be shallow."

Shorter-term, he expects spot gold "to fizzle out" near last month's all-time high of $1387, but "The psychological $1500 level...remains our medium-term upside target."

Ahead of "the most important week ever" as one wholesale bullion dealer jokes in a note today, exchange-traded investment in gold shrank by 1.5% according to the latest data analyzed by the VM consultancy here in London.

Today's mid-term US election results are followed tomorrow by the Federal Reserve's hotly anticipated monetary policy statement, plus interest-rate decisions in the UK and Eurozone on Thursday, and closely-watched US jobs data on Friday.

Last week's "strong profit taking" by institutional traders in US gold futures contrasted with "strong buying" in Tokyo's gold derivatives market, says VM in its weekly report for ABN Amro bank.

The world's biggest exchange-traded gold ETF – New York's SPDR Gold Shares – ended Monday night unchanged from last week's 5-tonne drop, holding some 1293 tonnes of bullion to back the trust's shares.

"Some level of QE has been built into the gold price," reckons HSBC metals analyst James Steel, who last week forecast that gold prices may dip on a strong Republican win in today's mid-term US elections.

"If we don't get QE [from the Fed on Tuesday], then the market will pull back," Steel says. "A more gradualist, modest approach will keep the gold market steady, slightly higher."

Fifty-three out of 56 economists surveyed by Bloomberg News expect the Fed to re-start its asset purchase program (aka QEII) on Wednesday, with 29 respondents expecting $500 billion of money creation or more.

"The more the West pursues quantitative easing, the more the emerging world, via capital controls, will pursue quantitative tightening," says Stephen King, chief economist at HSBC.

The Reserve Bank of Australia today surprised analysts by raising its short-term lending rate from 4.50% to 4.75% – a two-year high – while India's central bank raised its interest rates for the sixth time this year, again citing strong inflation.

In China, "the current money supply is very high," said People's Bank advisor Li Daokui today, warning that "inevitably [it] will bring about systemic financial risks" as ultra-loose US policy drives speculative flows worldwide.

US investors should "scour every segment of the bond market and the globe" said Pimco strategist Tony Crescenzi to Bloomberg TV on Monday, because they "can't depend on price appreciation...in Treasuries."

"I think a 20% decline in the US Dollar is possible," said his colleague Bill Gross – founder and head of the Pimco bond-fund group – to Reuters yesterday.

"When a central bank prints trillions of dollars of checks, that is a debasement."

China's M2 measure of the money supply swelled by 19% year-on-year in September according to the latest data.

Turkey's financial regulator, SPK, today launched an inquiry into whether comments from emerging-markets investor Mark Mobius of Templeton Asset Management led to a one-day drop of 3% in the Istanbul stock market last week, after he forecast a 15-20% pullback by year's end.

Back in the US, meantime, "If I were Bernanke," writes the Fed chairman's former colleague at Princeton, Nobel prize-winning economist Paul Krugman, "I'd...announce a fairly high inflation target over an extended period...something like 5% annual inflation over the next 5 years.

"It's crucial to understand that a half-hearted version of this policy won't work...The Fed needs to credibly promise to be irresponsible."

By Adrian Ash

BullionVault.com

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 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