Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
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
Gold Mining Stocks Fundamentals - 18th May 20
Why the Largest Cyberattack in History Will Happen Within Six Months - 18th May 20
New AMD Ryzen 4900x and 4950x Zen3 4th Gen Processors Clock Speed and Cores Specs - 18th May 20
Learn How to Play the Violin, Kids Activities and Learning During Lockdown - 18th May 20
The Great Economy Reopening Gamble - 17th May 20
Powell Sends a Message With Love for Gold - 17th May 20
An Economic Renaissance Emerges – Stock Market Look Out Below - 17th May 20
Learn more about the UK Casino Self-exclusion - 17th May 20
Will Stocks Lead the Way Lower for Gold Miners? - 15th May 20
Are Small-Cap Stocks (Russell 2k) Headed For A Double Dip? - 15th May 20
Coronavirus Will Wipe Out These Three Industries for Good - 15th May 20
Gold and Silver: As We Go from Deflation to Hyperinflation - 15th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

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