Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19
The Exponential Stocks Bull Market Explained - Video - 13th Mar 19
TSP Recession Indicator - Criss-Cross, Flip-Flop and Remembering 1966 - 13th Mar 19
Stock Investors Beware The Signs Of Recession / Deflation - 13th Mar 19
Is the Stock Market Still in a Bear Market? - 13th Mar 19
Stock Market Trend Analysis 2019 - 13th Mar 19
Gold Up-to-Date' COT Report: A Maddening Déjà Vu - 12th Mar 19
Save Fintech? Ban Short Selling. It's Not That Simple - 12th Mar 19
Palladium Blowup Could Expose Scam of Gold & Silver Futures - 12th Mar 19
Next Recession: Concentrating Future Losses & Bringing Them Forward In Time As Profits - 12th Mar 19
The Shift of the Philippine Peso Regime - 12th Mar 19
Theresa May BrExit Back Stab Deal Counting Down to Resignation, Tory Leadership Election - 12th Mar 19
Phase 1 of Stock Market Correction - 11th Mar 19
Long Awaited Stock Market Pullback has Finally Arrived - 11th Mar 19
US Presidential Cycle and the Stock Market - Video - 11th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - 11th Mar 19
Chinese Economic Data Shakes the Global Stock Markets - 11th Mar 19
The Fed Is Playing a Dangerous Game - 11th Mar 19
The Stock Market Has Called the Fed’s Bluff, What’s Next? - 11th Mar 19
Turkey Holiday Bazaar Extreme Jewelry Price Haggling - Fethiye Market - 11th Mar 19

Market Oracle FREE Newsletter

Stock and Finanacial Markets Trading Analysis Worth

Gold Leaps above $1600, US and Eurozone Appear No Closer to Solving Debt Problems

Commodities / Gold and Silver 2011 Jul 18, 2011 - 10:44 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleTHE SPOT MARKET gold price surged to $1602 per ounce Monday morning in London – a new intraday record – while stocks and commodities fell as politicians on both sides of the Atlantic appeared no closer to resolving their respective debt problems.

Silver prices also jumped, up to $40.38 per ounce – 2.8% higher from Friday's close.


The gold price also set new records in Euros and Sterling at Monday morning's London Fix.

With the Dollar price set at $1598.25 per ounce, Euro and Sterling gold prices were €1136.33 per ounce and £992.82 respectively.

"The market has been very firm for precious metals this morning. Silver led the charge and gold followed steadily," says one bullion dealer in Hong Kong.

"Gold prices have hit fresh highs across several currencies on macro unease, the Dollar weakening and the escalation of European sovereign debt uncertainty," adds a research note from Barclays Capital.

US President Obama is due to continue discussions with leading members of Congress on Monday in an effort to find a solution to the ongoing debt ceiling issue.

Republicans want measures to reduce the federal deficit in return for voting to increase the $14.3 trillion borrowing limit – which the US Treasury says it will hit on August 2.

"[The Democrats] are never willing to be specific about the reductions in spending that they would be willing to do," said Republican senator Jon Kyl on Sunday.

Republicans have proposed a "cut, cap and balance" plan – which would involve a constitutional amendment requiring the US government to balance its budget each year.

Republican congressman John Boehner, speaker of the House, described the proposal Friday as "a solid plan for moving forward".

Some economists, however, fear that such an amendment could exacerbate future recessions – since falling tax revenues would have to be offset by spending cuts.

"It's exactly the opposite of what intelligent fiscal policy should do," Dan Seiver, professor of finance at San Diego State University told Reuters.

Should the balanced budget proposal not pass Congress, a possible "Plan B" revolves around Republican Senator Mitch McConnell's suggestion that Congress simply be allowed to vote against raising the debt ceiling.

Obama could then veto their decision, which would require a two-thirds majority in Congress to overturn.

"If we're unable to get an agreement [McConnell's idea] might look pretty good a couple of weeks from now," said Boehner.

Data published Friday revealed US consumer confidence at its lowest level since March 2009.
Over in Europe, German chancellor Angela Merkel said Sunday she will only attend Greek bailout talks in Brussels "if there is a result."

Merkel reiterated Germany's desire to see private creditors share the burden of any rescue, telling German television that the greater the private sector contribution, "the less likely it will be that further steps are needed."

However, European Central Bank president Jean-Claude Trichet repeated the ECB's position on defaulted sovereign bonds in Monday's Financial Times Deutschland.

"If a country defaults, we will no longer be able to accept its defaulted government bonds as normal eligible collateral."

The European Banking Authority published the results of stress tests on Friday, showing that 8 out of 90 banks had insufficient capital to cope with given potential crises – with the aggregate shortfall estimated at €2.5 billion.

One bank, Germany's Helaba, pulled out of the tests last Wednesday.

The tests have been criticized for not considering the impact of a Greek sovereign default.
"This move in gold still has momentum, as Europe is burning to the ground," one US based trader told Reuters.

Over in New York meantime figures from the Commodities Futures Trading Commission for the week ended July 12 show a 26% rise in the net long position of so-called speculative gold futures and options traders on the COMEX – institutional traders defined as non-commercial. The net long figure is a measure of how bullish futures traders are on aggregate.

Speculative long positions in gold futures and options rose to the equivalent of 878.4 tonnes – the highest level in ten weeks, but only 2% above the average over the last 12 months – while speculative short positions climbed to 143.7 tonnes.

"We would beware of the continuing build-up of speculative short positions," warns Marc Ground, commodities strategist at Standard Bank.

"[These are] way above last year's average...indicating a market that is less supportive – which could see the gold price more vulnerable to shifts in investor sentiment."

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