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
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Ends Up Against US Dollar, Down Against Euro, Debt Ceiling Row turns Constitutional 

Commodities / Gold and Silver 2011 Jul 01, 2011 - 03:09 PM GMT

By: Ben_Traynor

Commodities Best Financial Markets Analysis ArticleTHE U.S. DOLLAR spot price of gold bullion slumped to a one-month low of $1489 per ounce  Friday morning London time – 5.5% down on May's all-time high – as stocks gained and commodities fell.

US newspapers meantime reported Friday that the very existence of a US federal debt ceiling may be unconstitutional.


Going into the weekend, gold bullion looked set for a loss of 0.8% loss for the week at Friday lunchtime London time.

Over in Athens, meantime, the Greek parliament passed the second austerity vote on Thursday.
Despite the Greek crisis, it is not the Euro but the US Dollar that saw the biggest decline against gold of major currencies in the first half of the year.

The wholesale market Dollar gold price rose 6.1% in the six months to the end of June. Gold bullion in Euros, meantime, saw its price fall over the same period, by 2.1%.

"Despite the most recent setbacks we do not see any reason to say that the multi-year gold rally has come to an end," says German refiner Heraeus, adding that financial markets are "still too uncertain".

"Larger setbacks...should be used by investors as well as industrial end users as fresh entry-points to add to stock."

The silver price fell to $33.87 per ounce on Friday morning in London – a 31.8% loss from its 31-year high at the end of April.

"Silver fundamentals remain weak and heavily dependent on investor interest to plug the gap," says a research note by Barclays Capital.

Silver prices were heading into the weekend around 1% down on the week by Friday lunchtime in London. Silver ended a rollercoaster first half of the year up 12.6%.

President Obama could meantime declare the federal debt ceiling to be unconstitutional, newspapers reported on Friday. 

If Congress does not pass a vote to raise the $14.3 trillion limit – which the US Treasury says it will hit on August 2 – Obama may invoke the Fourteenth Amendment to the US constitution, and instruct Treasury secretary Tim Geithner to keep borrowing in order to meet upcoming obligations, such as maturing debt payments.

Section 4 of the Fourteenth Amendment states:

"The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."

"If we didn't pay our bills," Senate Majority Leader, Democrat Harry Reid, said on Thursday, "it would plunge the United States not into a recession, not into the so-called double-dip recession, but into a full-blown depression." 

Geithner says he is confident that Congress "will do the right thing" and agree to raise the debt ceiling.

"You'll see more people out of work, more business fail" if the ceiling is not raised, the Treasury secretary told a Clinton Global Initiative conference on job creation on Thursday.
Geithner added that spending cuts to reduce the federal deficit must be done in a "growth-friendly" way.

Newspapers reported Friday that Geithner may quit as Treasury secretary once the debt ceiling issue is resolved.

Over in Europe, the Euro continued to rise against the Dollar after the Greek parliament agreed on the implementation of austerity measures.

"Does gold [now] lose some of its allure as an alternative currency?" asks a bullion dealer here in London, noting that Thursday was also the scheduled end of QE2 – the Federal Reserve's $600 billion asset purchase begun last November.

"Perhaps for a day or two: the risk bid has certainly been reduced."

"The seeming resolution of the Greece crisis has probably hurt gold," agrees Citigroup analyst David Thurtell.

"But I think there's enough interest from the Chinese and central banks to sustain it at around $1500 for now."

The Greek central bank added slightly to its gold reserves in May, the Wall Street Journal reported Friday. Greece bought 1000 ounces (0.03 tonnes) of gold bullion.

World Gold Council data published last month show official Greek reserves at 111.4 tonnes of gold bullion – just under 79% of total central bank reserves.

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.


© 2005-2022 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