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
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Gold Price Falls As Euro and Pound Gain

Commodities / Gold and Silver 2011 May 26, 2011 - 03:16 PM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleTHE DOLLAR price to buy gold slipped on Thursday morning – falling to $1519 per ounce – having retested three-week highs in overnight trading.

A rally on Asian stock markets failed to carry over into Europe, while prices for major commodities also showed limited movement.


Silver prices handed back most of Wednesday's gains, dropping 6% inside three hours before hovering around $37 per ounce.

"Gold and silver ran out of steam" in Asian trading, says one Hong Kong-based bullion dealer.

"We have seen some precious metals come under pressure as early profit-taking emerges in European markets ahead of the weekend and the end of the month," adds Marc Ground, commodities strategist at Standard Bank.

"Adding to gold's weakness, we have seen selling in the physical market outpace buying for the first time in six weeks."

"However, we doubt this will continue," says Ground, expecting net physical demand to buy gold "to return soon."

The British Pound meantime rose against the US Dollar on Thursday morning after the Bank of England was urged to raise its interest rate – now held at a record low of 0.5% for more than two years.

"A modest increase in [Bank of England] interest rates should be taken during 2011 to stave off increases in inflationary expectations, which are already elevated," a report by Paris-based policy institute the OECD said Wednesday.

"As the recovery gathers momentum in 2012, the pace of normalization of interest rates should be stepped up."

"The inflationary trend could become embedded" in the UK economy warned Andrew Sentance – a member of the Bank's Monetary Policy Committee (MPC) who has repeatedly voted for a rate rise since June last year – in a speech on Wednesday.

Sentance leaves the MPC this month.

"It still seems that the center of gravity at the Monetary Policy Committee is very much at [Mervyn King] the governor. I find that reassuring," says the UK's business secretary and member of its coalition government, Vince Cable, in an interview with the left-leaning New Statesman magazine.

 "The Bank's job, as the governor keeps pointing out, is not to look at today's numbers, but to look 18 months ahead.

"We don't have an underlying inflation problem."

The MPC's official upper tolerance of 3.0% for annual consumer price inflation has now been breached every month since Jan. 2010.

Consumer Price inflation for April was 4.5% year-on-year.

Until December 2003 the MPC targeted the Retail Price Index excluding mortgage interest payments – also known RPIX and underlying inflation – with the core target at 2.5%.
RPIX for April was 5.3%.

The Euro also rallied Thursday morning against the Dollar after an academic at China's central bank said the country should buy more Eurozone sovereign debt in a bid to ease the Greek crisis.

"Although China's trade with Greece is only a small portion of China's total trade with Europe, the European Union is still China's biggest export market," Wang Yong, professor at the People's Bank of China's training institute, wrote on Thursday.

"The renewed outbreak of the European sovereign debt crisis will cause a downturn in the entire Eurozone economy...This will affect China's exports in the second half of the year."

Elsewhere in China, the head of the country's largest state-owned gold mining company has predicted a Chinese "investment rush" to buy gold, saying that gold demand will outstrip domestic supply in the years ahead.  

Gold mining supply from world No.6 producer Peru was hit earlier this week by strike action demanding a pay rise at the Orcopampa mine. Buenaventura, the operator, is Peru's biggest precious metals producer, with Orcopampa its largest gold mine.

Gold mining workers in former world No.1 South Africa are meantime seeking a 14% pay rise.

"We are disappointed by this demand, very disappointed," Elize Strydom, chief negotiator for South Africa's Chamber of Mines, said on Monday.

"A 14% pay increase along with all of the other supplementary demands, means an increase in labor costs in real terms of 25%. This bears no relation to the 4.2% [consumer price inflation] and it is very distressing."

"As far as we are concerned low inflation is not being felt in the shopping baskets of our membership," counters Frans Baleni, general secretary of the National Union of Mineworkers (NUM).

"It is clear to me that [our members] are very determined to fight for a substantial wage increase this winter." 

By Ben Traynor
BullionVault.com

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

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

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