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
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Rebounds, Dollar Looks Strong Despite Debt Ceiling Deadlock

Commodities / Gold and Silver 2011 Jun 28, 2011 - 07:35 AM GMT

By: Ben_Traynor

Commodities Best Financial Markets Analysis ArticleU.S. DOLLAR prices for gold bullion rallied Tuesday morning London time, hitting $1503 an ounce – just above last Friday's closing price – as stocks were mixed and commodities and US Treasury bonds gained after President Obama held meetings on the debt ceiling.


Heavy selling in both Asia and the US saw gold bullion prices twice fall to $1492 an ounce on Monday, with a rally in London in between.

"The break below $1504...has gold in a negative light," reckon technical analysts at bullion bank Scotia Mocatta.

"We would need a close back above $1512 to shake the uncertain outlook."

"The price won't likely fall below $1470," says Park Jong Beom, trader at Tong Yang Futures in Seoul, citing the Euro crisis and continued loose US monetary policy as factors supportive of the gold bullion price.

The silver price meantime climbed to $34.17 per ounce on Tuesday morning – 11% down on where it started the month – before easing back slightly.

"Technically silver is in a falling channel," says a trader in Tokyo.

"Some industrial users have been buying silver, but it is not enough to push prices back up because investors are not buying."

President Obama meantime met with Senate majority leader, Democrat Harry Reid, and Senate minority leader, Republican Mitch McConnell, in separate meetings on Monday to try to break the deadlock on deficit reduction ahead of a vote on whether to raise the $14.3 trillion federal debt ceiling. 

President Obama believes that "a balanced approach is the right approach," said White House press secretary Jay Carney on Monday, arguing that increased tax revenue as well as spending cuts should form part of a deficit reduction package.

The US Treasury has said it will hit the debt ceiling by August 2, after which it will be unable to cover payments to government bond holders unless the ceiling is raised.

"[But] the Dollar is still looking strong in the face of the Eurozone debt crisis," says Hou Xinqiang, analyst at Jinrui Futures in China, adding that the Dollar's strength means "gold is facing more downside pressure in the short run."

Since the start of 2011, however, the Euro has gained 7% against the Dollar. The Euro gold bullion price, meantime, rose to €1054 Tuesday morning – still 0.8% below where it started the year.

Here in Europe, Greece began its fourth general strike of 2011 at midnight on Tuesday, ahead of the parliamentary vote on a new austerity package, agreed as part of a new aid deal.

"The stability of the entire Eurozone would be in danger" were Greece to reject the package, German finance minister Wolfgang Schaeuble said on Sunday, adding that the next tranche of last year's bailout would be threatened.

"Germany's internal debate about whether to pay for the Greek debt is risible," says former German Joschka Fischer.

"Refusing to pay is not a viable option, because Germany and all other Eurozone members are in the same boat. A Greek default would threaten to sink them, too."

"Lying below the surface are much bigger countries, like Spain and Italy," says Steve Barrow, currency strategist at Standard Bank.

"And even if Greece votes itself more austerity and receives more cash...the problems of the Eurozone will deepen, they will not ease." 

Elsewhere in Europe, Norway's trade minister Trond Giske said Monday that the Norwegian Krone would not offer investors protection from a European crisis.

"I don't think the Norwegian Krone and the Norwegian economy is big enough to become a safe haven for the large investors," adding that Norway is "very closely connected" to the Euro as 80% of its exports go to the European Union.

Central banks, meantime, look poised to buy gold over next decade, according to a poll by investment bank UBS. The survey found that 6% of central bank reserve managers expect the biggest change in their reserves over the next 10 years will be the addition of more gold bullion.

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