Best of the Week
Most Popular
1.U.S. Inner City Turmoil and Other Crises: Ron Pauls Predictions for 2015 - Dr_Ron_Paul
2. What’s In Store For Gold Price in 2015? - Ben Kramer-Miller
3.Crude Oil Price Ten Year Forecast to 2025: Importers Set to Receive a $600 Billion Refund - Andrew_Butter
4.Je ne suis pas Charlie - I am not Charlie - Nadeem_Walayat
5.The New Normal for Oil? - Marin_Katusa
6.Will Collapse in Oil Price Cause a Stock Market Crash? - OilPrice.com
7.UK CPI Inflation Smoke and Mirrors Deflation Warning, Inflation Mega-trend is Exponential - Nadeem_Walayat
8.Winter Storms Snow and Wind Tree Damage Dangers, DIY Pruning - Nadeem_Walayat
9.Oil Price Crash and SNP Independent Scotland Economic Collapse Bankruptcy - Nadeem_Walayat
10.U.S. Housing Market Bubble 2.0 Meet the Pin - James_Quinn
Last 5 days
Bitcoin Price Tense Days Ahead - 27th Jan 15
The Most Overlooked “Buy” Signal in the Stock Market - 27th Jan 15
Gold's Time Has Come - 27th Jan 15
France America And Religious Terror War - 27th Jan 15
The New Drivers of Europe's Geopolitics - 27th Jan 15
Gold And Silver - Around The FX World In Charts - 27th Jan 15
It’s Not The Greeks Who Failed, It’s The EU - 27th Jan 15
Gold and Silver Stocks Investing Basics - 27th Jan 15
Stock Market Test of Strength - 26th Jan 15
Is the Gold Price Rally Over? - 26th Jan 15
ECB QE Action - Canary’s Alive & Well - 26th Jan 15
Possible Stock Market Pop-n-drop in Store For SPX - 26th Jan 15
Risk of New Debt Crisis After Syriza Victory In Greece - 26th Jan 15
How Eurozone QE Works: A Guide to Draghi's News - 26th Jan 15
Comprehensive Silver Price Chart Analysis - 26th Jan 15
Stock Market More Retracement Expected - 26th Jan 15
Decoding the Gold COTs: Myth vs Reality - 26th Jan 15
Greece Votes for Syriza Hyperinflation - Threatening Euro-zone Collapse or Perpetual Free Lunch - 26th Jan 15
Draghi's "No-growth" QE Money for Stocks, Zilch for the Economy - 25th Jan 15
Unjust and Undeclared Wars - 25th Jan 15
The European Central Bank Commits Monetary Suicide - 25th Jan 15
Stock Market ECB EQE week - 25th Jan 15
Gold And Silver Timing Is Most Important Element - 25th Jan 15
The Best Way to Invest in the Next Alibaba Internet Stock IPO - 25th Jan 15
The Outpatient Surgery Business Rains Cash into Healthcare Stocks - 25th Jan 15
Stock Traders Flock to Gold GLD ETF - 24th Jan 15
10 Reasons Why You Need an Offshore Bank Account - 24th Jan 15
Goldman Sachs Blankfein - Regulation is Like Background Noise - 24th Jan 15
Gold in Euros Surges As ECB To Print Trillion Euros and Greek Election This Sunday - 24th Jan 15
Gold Bear Market Rally or New Bull ? - 24th Jan 15
Euro-zone 'QE already Working' Says IMF Lagarde - 23rd Jan 15
ECB and EU LTRO and QE for Dummies: Or, Make These Trades - 23rd Jan 15
Debt and Deflation: Three Financial Forecasts - There's More Than Falling Prices - 23rd Jan 15
Market Should Not Doubt' Mario Draghi ECB QE - 23rd Jan 15
Francs, Bonds, Barrels, and Bail-Ins - 23rd Jan 15
Are Plunging Petrodollar Revenues Behind the Fed’s Projected Rate Hikes? - 22nd Jan 15
Stocks Bear Market Lessons from History - 22nd Jan 15
Russia's Plans for Arctic Supremacy - 22nd Jan 15
166 Trillion Reasons Why Bank Stocks Are So Cheap - 22nd Jan 15
Will Gold Price Break Out Once Again? - 22nd Jan 15
The Cult of Central Banking - 21st Jan 15
Five Stock Market Questions Wall Street Hopes You’ll Never Ask - 21st Jan 15
China's Yuan Enters the Currency "Big Leagues" to Take on the Dollar - 21st Jan 15
Investor implications of QE by the ECB - 21st Jan 15
Deflation Bonanza! And the Fool's Mission to Stop It - 21st Jan 15
Messin' With My Financial Brain - 21st Jan 15
Are Stock Market Buyouts Checking Out? - 20th Jan 15
Legal “Steroids” Are Making This Tech Stock a “Buy” - 20th Jan 15
Are Stock Market Storm Clouds Massing? - 20th Jan 15
The Swiss Release the Kraken! - 20th Jan 15
The European Union, Nationalism and the Crisis of Europe - 20th Jan 15
Swiss Say No to QE - 20th Jan 15
Gold Demand Explodes as Volatility and Fear Stalk Market - 20th Jan 15
The Truth About This Stock Market "Meltdown" Indicator - 20th Jan 15
Markets 2015 More Of The Same? - 20th Jan 15
Is Market Sentiment Shifting to Gold? - 20th Jan 15
U.S. Dollar’s Major Breakout and Gold’s Simultaneous Rally - 19th Jan 15
Silver Price Breaks Out on Swiss France Euro Decoupling - 19th Jan 15
Gold Bullish Inverse Head and Shoulders Pattern - 19th Jan 15
Bundesbank Announces Repatriation of 120 Tonnes of Gold from Paris and New York Federal Reserve - 19th Jan 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

State of US Markets 2015 Report

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