Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Beware Gold Stocks Downside - 13th Dec 19
Fed Says No Interest Rate Hikes In 2020. What About Gold? - 13th Dec 19
The ABC’s of Fiat Money - 13th Dec 19
Why Jo Swinson and the Lib Dems LOST Seats General Election 2019 - Sheffiled Hallam Result - 13th Dec 19
UK General Election 2019 BBC Exit Poll Forecast Accuracy Analysis - 12th Dec 19
Technical Analysis Update: Tadawul All Share Index (TASI) - Saudi Arabia ETF (KSA) - 12th Dec 19
Silver Miners Pinpoint the Precious Metals’ Outlook - 12th Dec 19
How Google Has Become the Worlds Biggest Travel Company - 12th Dec 19
UK Election Seats Forecasts - Tories 326, Labour 241, SNP 40, Lib Dems 17 - 12th Dec 19
UK General Election 2019 Final Seats Per Party Forecast - 12th Dec 19
What UK CPI, RPI INFLATION Forecasts for General Election Result 2019 - 11th Dec 19
Gold ETF Holdings Surge… But Do They Actually Hold Gold? - 11th Dec 19
Gold, Silver Reversals, Lower Prices and Our Precious Profits - 11th Dec 19
Opinion Pollsters, YouGov MRP General Election 2019 Result Seats Forecast - 11th Dec 19
UK General Election Tory and Labour Marginal Seats Analysis, Implied Forecast 2019 - 11th Dec 19
UK General Election 2019 - Tory Seats Forecast Based on GDP Growth - 11th Dec 19
YouGov's MRP Poll Final Tory Seats Forecast Revised Down From 359 to 338, Possibly Lower? - 10th Dec 19
What UK Economy (Average Earnings) Predicts for General Election Results 2019 - 10th Dec 19
Labour vs Tory Manifesto's UK General Election Parliamentary Seats Forecast 2019 - 10th Dec 19
Lumber is about to rally and how to play it with this ETF - 10th Dec 19
Social Mood and Leaders Impact on General Election Forecast 2019 - 9th Dec 19
Long-term Potential for Gold Remains Strong! - 9th Dec 19
Stock and Financial Markets Review - 9th Dec 19
Labour / Tory Manifesto's Impact on UK General Election Seats Forecast 2019 - 9th Dec 19
Tory Seats Forecast 2019 General Election Based on UK House Prices Momentum Analysis - 9th Dec 19
Top Tory Marginal Seats at Risk of Loss to Labour and Lib Dems - Election 2019 - 9th Dec 19
UK House Prices Momentum Tory Seats Forecast General Election 2019 - 8th Dec 19
Why Labour is Set to Lose Sheffield Seats at General Election 2019 - 8th Dec 19
Gold and Silver Opportunity Here Is As Good As It Gets - 8th Dec 19
High Yield Bond and Transports Signal Gold Buy Signal - 8th Dec 19
Gold & Silver Stocks Belie CoT Caution - 8th Dec 19
Will Labour Government Spending Bankrupt Britain? UK Debt and Deficits - 7th Dec 19
Lib Dem Fake Tory Election Leaflets - Sheffield Hallam General Election 2019 - 7th Dec 19
You Should Be Buying Gold Stocks Now - 6th Dec 19
The End of Apple Has Begun - 6th Dec 19
How Much Crude Oil Do You Unknowingly Eat? - 6th Dec 19
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19

Market Oracle FREE Newsletter

UK General Election Forecast 2019

Gold Leaps as Finnish Demand Puts Entire Greek Rescue at Stake

Commodities / Gold and Silver 2011 Aug 30, 2011 - 11:46 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleTHE DOLLAR gold bullion price leapt 2.2% in less than an hour Tuesday lunchtime London time, hitting $1832 per ounce – still 4.2% off last week's all-time high – while commodities fell, US Treasury bonds rose and stocks were mixed as Greek debt worries affected the Eurozone.

"Conventional wisdom is that bullish sentiment on equities would mean bearish sentiment on gold," reckons one gold bullion dealer here in London.


"But the outlook remains sufficiently uncertain that gold continues to find reasonable support."

"There's a little bit of bargain hunting," adds Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

"Towards September, jewelers pick up...festivals give gold a little bit of support for the time being. The premiums are increasing due to some demand. There's not much sales of scrap around."

Silver prices rose to $41.48 per ounce – just above Friday's close.

"We see last week's low of $38.78 as an important technical pivot," say technical analysts at bullion bank Scotia Mocatta.

"Topside resistance is seen at $41.71. We are cautious owning silver as we do not believe the market has recovered from the April/May large liquidation."

Stock markets rose on Tuesday in London – which reopened after yesterday's bank holiday – with the FTSE 100 up over 2% by lunchtime, following gains for US and Asian stock markets over the previous 24 hours.

In continental Europe, by contrast, major stock markets sold off, with Germany's DAX down nearly 1%, while in Paris the CAC fell 0.4%

Some European banks are not taking sufficient writedowns on the Greek debt they hold, according to the International Accounting Standards Board, which oversees markets on behalf of the European Union.

"It is hard to imagine that there are buyers willing to buy those bonds at the prices indicated by the valuation models being used," warned IASB Hans Hoogervorst in a letter dated August 4 and published Tuesday.

The letter's publication follows calls for an "urgent recapitalization" of Europe's banking sector, made on Saturday by International Monetary Fund managing director Christine Lagarde.

"Monetary policy also should remain highly accommodative, as the risk of recession outweighs the risk of inflation...policymakers should stand ready, as needed, to dive back into unconventional waters."

Brussels dismissed the idea on Monday.

"We've always preferred the private sector to come up with solutions by themselves," said EU spokesman Amadeu Altafaj-Tardio.

"European banks are much better capitalized than they were even a year ago...[but] national public authorities have also drawn up contingency mechanisms in case."

Elsewhere in Europe, Finland continues to insist on receiving some form of collateral in return for contributing to a Greek bailout. 

Greece agreed earlier this month to post cash as collateral against the Finnish portion of the rescue deal – a proposal with which other Eurozone members are unhappy. 

"In normal circumstances, demanding collateral is quite usual," Germany's deputy foreign minister Werner Hoyer says in an interview published Tuesday by Finnish newspaper Helsingin Sanomat.

"But now Greece has put the ball back in Finland's court by saying that Finland will get the cash collateral from the other Euro countries...that will naturally not do."

"I'm not happy with [the Finland-Greece deal]", said Jean Claude Juncker, chairman of the Eurozone finance ministers, on Monday.

Finland's government would, however, "likely collapse" if it backed down on its collateral demand, according to Timo Tyrvaeinen, chief economist at Finnish bank Aktia.

“What's at stake is...the entire second rescue package for Greece by the Euro area," reckons Frank Engels, Frankfurt-based co-head of European economy at Barclays Capital.

On the gold futures markets meantime the number of noncommercial – so-called speculative – long positions held by traders on New York's Comex fell 3.4% in the week ended 23 August.

"The fall off in gold speculative longs points to a market that whilst not overly bearish (no strong surge in speculative shorts) is questioning further upside for gold," says Marc Ground, commodities strategist at Standard Bank.

"Speculative shorts remain above last year's average. Further price dips in the near term can be expected, should the market's perception of risk start to change."

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