Best of the Week
Most Popular
1.Putin’s World: Why Russia’s Showdown with the West Will Worsen - John_Mauldin
2. Stocks Bull Market Grinds Bears into Dust, Is Santa Rally Sustainable? - Nadeem_Walayat
3. Gold and Silver 2015 Trend Forecasts, Prices to Go BOOM - Austin_Galt
4.Gold Price Golden Bottom? - Toby_Connor
5.Gold Price and Miners Soar on Huge Volume - P_Radomski_CFA
6.Stock Market and the Jaws of Life or Death? - Rambus_Chartology
7.Gold Price 2015 - EWI
8.Manipulated Stock Market Short Squeezes to Another All Time High - The China Syndrome - Nadeem_Walayat
9.Gold, Silver, Crude and S&P Ending Wedge Patterns - DeviantInvestor
10.Is the Gold And Silver Golden Rule Broken? - Michael_Noonan
Last 5 days
Outrage at Taliban Islamic Fundamentalists Massacre of 132 Pakistani School Children in the Name of God - 18th Dec 14
How Inflation Changes Retirement Benefit Choices - 17th Dec 14
The Real Reason It's Tough to Beat the Stock Market - 17th Dec 14
Russian Currency Crisis and Debt Defaults Could Create Contagion in West - 17th Dec 14
How to Profit From Russia's Stock Market Crash - 17th Dec 14
Russia Crisis - If You Put Your Money in the Bank Will You Get it Back? - 17th Dec 14
Crude Oil Price Crash, U.S. Employment and Economic Growth - 17th Dec 14
Opposing Forces At Play In Gold and Silver Precious Metals Complex - 17th Dec 14
Wall Street Will Always Find An Excuse For Not Raising U.S. Interest Rates - 17th Dec 14
Torture, Terror And Elite Schizophrenia In The UK - 16th Dec 14
Eurozone Conflict Will Bring a Major Stocks Buying Opportunity - 16th Dec 14
Viewing Russia From the Inside - 16th Dec 14
Gold and Silver Stocks Bottom - Are We There Yet? - 16th Dec 14
The Financial Industry Pigmen Win Again - 16th Dec 14
Crude Oil Price Epic Blowout - 16th Dec 14
Asian Stocks Markets: Sand In The Gears Of The Bull Market - 16th Dec 14
U.S. Dollar Trend Forecast 2015 - Video - 16th Dec 14
Silver Price Bottom? - 15th Dec 14
Gold Price Base Building Bullish Pattern - 15th Dec 14
Stock Market Probable Pop-n-Crash Today - 15th Dec 14
Stock Market Time for a Bounce - 15th Dec 14
Stock Market Euphoria: The Mother of All Ponzi Schemes - 15th Dec 14
Gold - The Weight of Time as Trend - 15th Dec 14
U.S. Dollar Collapse? USD Index Trend Forecast 2015 - 14th Dec 14
The Rushing Stocks Bear Market and How to Prepare - 14th Dec 14
Gold and Silver Dreaming of a White Christmas - 14th Dec 14
Cyprus-style Bank Bail-ins to Take Deposits and Pensions - The Global Bankers' Coup - 13th Dec 14
How To Renounce Your US Citizenship And Become Stateless - 13th Dec 14
Stock Market Downtrend Underway - 13th Dec 14
Gold And Silver - Wall Street, aka United States, Pulls Off Another Destructive Coup - 13th Dec 14
U.S. Congress Has Guaranteed the Secular Stocks Bear Market is Not Over - 13th Dec 14
Gold and Silver Starting to Show Bullish Signs - 13th Dec 14
Arab Spring II is Coming Fast - The Unintended Consequences of Lower Oil Prices - 13th Dec 14
Commodities - Is Inflation Oversold? - 12th Dec 14
Stock Market SPX Top Valuations - 12th Dec 14
Scary Stocks Investors Should Shun in 2015 - 12th Dec 14
New York Times on Benefits of Gold in Currency Wars - 12th Dec 14
Will Crude Oil Kill The Zombies? - 12th Dec 14
Largest Financial Bubble in History - 10 years of 'Why Sell Now?' - 12th Dec 14
How the Rising U.S. Dollar Could Trigger the Next Global Financial Crisis - 12th Dec 14
Central Banks and Government Policies Control the Markets Myth - 12th Dec 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Dramatic Stock Market Selloff

Gold Could be Pushed into Uncharted Territory

Commodities / Gold and Silver 2011 Sep 01, 2011 - 03:19 PM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleU.S. DOLLAR gold bullion prices edged down to $1820 an ounce by Thursday lunchtime in London – 1.1% off the high for this week so far – while stocks and commodities dropped and government bonds gained following publication of weak European manufacturing data.

"The [gold] market is dead in this time zone," said a Hong Kong gold bullion dealer this morning.


Silver bullion prices were also steady, holding around $41.60 – 0.5% above where they started the week.

"The power of the drop from $50 [earlier in the year] still overhangs silver so we would not be surprised at another sideways month in price action," say technical analysts at bullion bank Scotia Mocatta.

Euro gold bullion prices meantime edged up to €1278 per ounce Thursday morning – a high for the week so far.

Eurozone manufacturing activity declined in August, according to the purchasing managers index for the 17 nation single currency area. The Eurozone PMI fell to 49.0 – down from 50.4 in July (a figure below 50 indicates contraction).

China's PMI recovered slightly to 50.9 – up from 50.7 in July – while the UK's manufacturing sector continued to contract, its PMI falling from 49.4 in July to 49.0. Similar manufacturing data for the US are due out later today.

German manufacturing PMI fell from 52 in July to 50.9 last month – its lowest level for two years. German economic growth meantime slowed to 2.7% year-on-year in the second quarter – down from 4.9% in Q1 – according to official data published Thursday.

"The recovery should continue, albeit at a slower pace," reckons Carsten Brzeski, senior economist at ING in Brussels.

"Nevertheless, the next stage of the Eurozone debt crisis will put...the German economy to the test."
Elsewhere in Europe, FT Alphaville reports on French banks' relatively high dependence on wholesale funding – with deposits making up 31% of total assets, compared to 36% for banks in Europe as a whole – which, the report says, could leave them vulnerable to a shift away from Europe by money market funds.

UBS has reportedly cut its 2012-13 forecast for French banks' earnings as a result.

"It is not a sustainable sign of faith in the region that some of the largest banks in the Eurozone, with generally sound asset quality and business models, struggle to fund themselves in public markets," says Omar Fall, equity analyst at UBS in London.

"The crisis is not over," Juergen Stark, European Central Bank executive board member, told an economic forum in Austria on Thursday morning.

"Not just in Europe is it not over, it is also not over in other regions of the world," Stark added, citing the "enormous" debt problem in the United States.

"Given the weak [US] data we've seen recently," Federal Reserve Bank of Atlanta president Dennis Lockhart said in a speech on Wednesday, "and considering the rising concern about chronic slow growth or worse, I don't think any policy option can be ruled out at the moment."

Lockhart added, however, that he is "acutely aware that pushing beyond what monetary policy can plausibly deliver runs the risk of creating new distortions and imbalances."

"The uncertainty clouding the macro outlook has lifted gold prices," says a research note from Barclays Capital on Thursday.

"As long as it persists and investors remain responsive to gold, barring short term corrections, prices are set to venture further into uncharted territory."

Gold prices rose over 11% in US Dollar terms last month – despite Congress reaching an agreement on the debt ceiling at the start of August – with many gold buyers choosing physical gold bullion.

"Looking at the physical market, last month's sales of gold and silver coins by the US Mint were strong," notes one gold bullion dealer here in London.

"Its year-to-date gold sales [though] are lower than last year, perhaps indicating a reduced degree of fear amongst buyers this year."

UBS, however, last month noted a "growing preference towards allocated gold" – gold held securely in a professional vault on behalf of its owner, rather than stored in its owner's residence or safe deposit box.

Allocated gold providers BullionVault saw the volume of gold owned by its users grow 6.7% in August, hitting a new record of 24.3 tonnes.

By value, client-gold holdings at BullionVault rose by 20% in August to stand above $1.42 billion at today's AM gold fix.

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.


© 2005-2014 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

Free Report - Financial Markets 2014