Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Falls, Green Light Given to future Euro Bailouts

Commodities / Gold and Silver 2011 Sep 07, 2011 - 07:04 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleU.S. DOLLAR gold bullion prices dropped to around $1833 an ounce Wednesday morning in London – 4.5% off yesterday's intraday record high.

Stocks and commodities rose and government bonds fell after Germany's highest court ruled the country's bailout policies are not in breach of its constitution.


Silver bullion prices dipped to a low of $40.86 around lunchtime – a 5.5% loss for the week so far.

"From a physical perspective, demand for gold remains supported by India's wedding season and desperate Chinese customers," says a note from Swiss refiner MKS.

"People have jumped to buy gold due to the current decline [in prices]" added a gold bullion dealer in Mumbai on Wednesday.

Earlier on Wednesday gold bullion prices saw a sudden drop during Asian trade – losing 2.3% in two hours.

"It was intra-day technical stops...it doesn't reflect any changes in fundamentals," reckons one trader in Sydney quoted by news agency Reuters.

European stock markets meantime continued to perform well during Wednesday morning's trading – with the FTSE up 1.8% by lunchtime, while the German DAX gained 2.8%.

"Valuations are attractive in the short term," reckons Guillaume Duchesne, Luxembourg-based equity strategist at BGL BNP Paribas. 

"Still, volatility remains significant and it's best to be cautious. Today looks like a technical rebound."

Germany's participation in previous Eurozone bailouts is not in breach of the country's constitution, according to a verdict delivered Wednesday by the Constitutional Court in Karlsruhe.

The verdict, however, "should not be mistakenly interpreted as a constitutional blank check authorizing further rescue measures," warned the court's president Andreas Vosskuhle.

"This gives a green light for continued bailouts," reckons Frederik Erixon, co-founder of the Brussels-based European Centre for International Political Economy, adding that such measures represent "the only track available to Eurozone leaders right now".

"Today's ruling should bring some relief to financial market," says Carsten Brzeski, economist at ING.

"But it shouldn't lead to euphoria...a bigger say for German parliament in future bailouts could easily find copycats in other Eurozone countries."

The Bundestag is due to debate a proposal to increase the size of the Eurozone's current bailout mechanism – the €440 billion European Financial Stability Facility – later this month. The proposals – agreed at the Eurozone summit of on July 21 but not yet enacted by national parliaments – would increase Germany's EFSF guarantees from €123 billion to €211 billion.

The German government last week granted the Bundestag a formal role in drafting future Eurozone aid packages. Two days ago 25 members of Germany's ruling coalition voted against the draft law to increase the size and powers of the EFSF.

Elsewhere in Europe, Athens has vowed to speed up its economic reforms – following comments from German finance minister Wolfgang Schaeuble that suggested inadequate progress would threaten Greece's next bailout installment. 

"If we don't complete structural reforms...we will be stuck," Schaeuble's Greek counterpart Evangelos Venizelos said Tuesday.

"Greece is not the pariah of the European Union," added Venizelos. 

"It is an equal, competitive country that has a very serious problem regarding its public debt and fiscal deficit."

Yields on Greek government bonds set new record highs on Wednesday as investors continued to sell. The yield on 10-Year bonds breached 20% – while 2-Year bonds this morning traded above 53%.

Over in the US, President Obama is due to announce a new job creation package on Thursday. The combination of spending and tax cuts Obama will propose will be worth $300 billion, according to some US media reports.

"I have no doubt the president will propose many things on Thursday that, when looked at individually, sound pretty good, or that he'll call them all bipartisan," said Senate minority leader, Republican Mitch McConnell.

"I'm equally certain that, taken as whole, they'll represent more of the same failed approach."
Kazakhstan's central bank meantime pledged Wednesday to buy all of the country's domestic gold bullion production until at least 2015.

Kazakhstan produced 26.9 tonnes of gold last year, making it number 20 in the world, according to leading precious metals consultant GFMS. The latest figures published by the World Gold Council put its official gold bullion reserves at 70.4 tonnes.

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