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 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

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 - 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