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
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


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

6 Critical Money Making Rules