Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

Gold and Silver Rise as Germany Angered by Cheating Greece

Commodities / Gold and Silver 2011 May 28, 2011 - 01:15 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleTHE WHOLESALE MARKET gold price traded in a $3 range around $1526 an ounce Friday morning London time, while stocks and commodities rose and the Euro rallied in spite of concerns the IMF may halt the latest payment of Greece's €110 billion bailout.

Heading into the UK and US holiday weekend, gold prices at Friday lunchtime looked set for a 1% gain on the week.


"[The gold price] is presently in no-mans-land" says German precious metals trading group Heraeus in its latest weekly report. 

"Further developments in price will depend on how things evolve on the sovereign debt crisis... should things not ease, then gold should remain expensive."

Safe haven demand "remains bullish" adds Swiss precious metals group MKS, but "we wouldn't rule out a small correction due to investors booking their profits."

"We expect gold denominated in Euros to outperform [the Dollar gold price ] on the back of the debt crisis in Europe," says Friday's note from Standard Bank in London.

Silver prices meantime hovered just below $38 per ounce this morning, a gain of 8% on the week.

"I think people are cautious about silver after seeing what happened [on Thursday]", a Hong Kong dealer told Reuters, referring to the 6%-in-three-hours silver price drop.

"There's only a slight amount of physical [silver] buying. It's a holiday in the US next week, so people may square off positions tonight," said the dealer, adding that sentiment is "still bullish" for the gold price "because of the problems in Greece."

The Euro rallied on Friday morning – after hitting an all-time low against the Swiss Franc on Thursday – despite concerns that the International Monetary Fund may withhold the next payment in the Greek bailout package, as Greece cannot guarantee its solvency.

"There are specific IMF rules and one of those rules says that IMF can only take action when the refinancing guarantee is given over 12 months," said Luxembourg prime minister Jean-Claude Juncker, chairman of the Eurozone finance ministers, on Thursday.

"Greece cheated to get in [the Euro]," said Otmar Issing, former chief economist at the European Central Bank, in an interview from Copenhagen Thursday. 

Greece "didn't meet the criteria" for Euro membership says Issing. Eurozone rules stated that a country's deficit be no more than 3% of its GDP, and national debt no more than 60%.

"I was among many economists in Germany warning against premature entry into the monetary union and against too many countries."

Greece, aided by investment bank Goldman Sachs, used "creative accounting" to "mask the true extent of its deficit", according to a report last year by German newspaper Der Spiegel.

Across the Atlantic, details have emerged of previously undisclosed loans made by the US Federal Reserve to major investment banks.

Goldman Sachs, Credit Suisse and the Royal Bank of Scotland each borrowed over $30 billion in 28-day loans between March and December 2008. 

Interest rates on the loans – which were made as part of the Fed's single-tranche open market operations – were as low as 0.01%.

"This was a pure subsidy," says Robert A. Eisenbeis, former head of research at the Federal Reserve Bank of Atlanta.

"The Fed hasn't been forthcoming with disclosures overall. Why should this be any different?"

Here in the UK, Bank of England Monetary Policy Committee member Adam Posen said on Friday that "the majority of the MPC is right to have held its nerve against calls for [interest] rate hikes".

"Tightening fiscal policy with no offset from additional monetary easing will strengthen the underlying disinflationary pressures," wrote Posen in a Financial Times guest column.

The Bank of England has held rates at 0.5% since March 2009. Consumer price inflation (CPI) for April was 4.5% year-on-year. CPI has now breached the MPC's upper tolerance of 3.0% every month since January 2010.

Over in China, meantime, leading precious metals consultancy GFMS forecast Thursday that Chinese gold bullion imports will rise to 400 tonnes this year – equivalent to 15% of 2010 global mine production and more than equal to China's own gold output – while demand for silver will also outstrip domestic supply.

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