Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20
THE STOCK MARKET BIG PICTURE - Video - 19th Nov 20
Reasons why Bitcoin is Treading at it's Highest Level Since 2017 and a Warning - 19th Nov 20
Media Celebrates after Trump’s Pro-Gold Fed Nominee Gets Blocked - 19th Nov 20
DJIA Short-term Stock Market Technical Trend Analysis - 19th Nov 20
Demoncracy Ushers in the Flu World Order How to Survive and Profit From What Is Coming - 19th Nov 20
US Bond Market: "When Investors Should Worry" - 18th Nov 20
Gold Remains the Best Pandemic Insurance - 18th Nov 20
GPU Fan Not Spinning FIX - How to Easily Extend the Life of Your Gaming PC System - 18th Nov 20
Dow Jones E-Mini Futures Tag 30k Twice – Setting Up Stock Market Double Top - 18th Nov 20
Edge Computing Is Leading the Next Great Tech Revolution - 18th Nov 20
This Chart Signals When Gold Stocks Will Explode - 17th Nov 20
Gold Price Momentous ally From 2000 Compared To SPY Stock Market and Nasdaq - 17th Nov 20
Creating Marketing Campaigns Using the Freedom of Information Act - 17th Nov 20
ILLEGITIMATE PRESIDENT - 17th Nov 20
Stock Market Uptrend in Process - 17th Nov 20
How My Friend Made $128,000 Investing in Stocks Without Knowing It - 16th Nov 20
Free-spending Biden and/or continued Fed stimulus will hike Gold prices - 16th Nov 20
Top Cheap Budgie Toys - Every Budgie Owner Should Have These Safe Bird Toys! - 16th Nov 20
Line Up For Your Jab to get your Covaids Freedom Pass and a 5% Work From Home Tax - 16th Nov 20
You May Have Overlooked These “Sleeper” Precious Metals - 16th Nov 20
Demystifying interesting facts about online Casinos - 16th Nov 20
What's Ahead for the Gold Market? - 15th Nov 20
Gold’s Momentous Rally From 2000 Compared To Stock Market SPY & QQQ - 15th Nov 20
Overclockers UK Quality of Custom Gaming System Build - OEM Windows Sticker? - 15th Nov 20
UK GCSE Exams 2021 CANCELLED! Grades Based on Mock Exams and Teacher Assessments - 15th Nov 20
Global "Debt Mountain": Beware of This "New Peak" - 13th Nov 20
Overclocking Zen 3 Ryzen 5600x, 5800x, 5900x and 5950x to 4.7ghz All Cores Cinebench R20 Scores - 13th Nov 20
Is Silver Leading Bitcoin or is Bitcoin Leading Silver? - 13th Nov 20
How Elliott Waves Simplify Your Technical Analysis - 13th Nov 20
How to buy Bitcoins using debit/credit card? - 13th Nov 20
Will COVID Vaccine Kill Gold and Silver? - 12th Nov 20
Access to Critical Market Reports - 12th Nov 20
Stock Market Dow Futures Reach 30,000 on News of COVID-19 Vaccine Trials Success - 12th Nov 20
8 Terms & Conditions You Must Know Before Asking For Life Insurance Policy Quotes - 12th Nov 20
Gold Stocks Post 2020 US Election Outlook - 11th Nov 20
Champions’ League Group Stage Draw: All You Need To Know - 11th Nov 20
Stock Market Secular Trend - 11th Nov 20
Stock Market Correction Curtailed by US Election - 11th Nov 20
What Causes a Financial Bubble? - 11th Nov 20
Ryzen 9 5900X RTX 3080 - Scan.co.uk vs Overclockers.co.uk UK Custom PC System Builder Review - 10th Nov 20
Killing Driveway Weeds FAST with a Pressure Washer - Saving Block Paving from LOTS of WEEDs - 10th Nov 20
Trump Fired, Biden Hired, What Next?  - 10th Nov 20
Looking for a Personal Loan? Here Is What You Have To Know  - 10th Nov 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold and Stocks Fall on FOMC Disappointment

Commodities / Gold and Silver 2011 Sep 22, 2011 - 08:45 AM GMT

By: GoldCore

Commodities

Gold is trading at USD 1,752.70, EUR 1,304.87, GBP 1,137.30, JPY 133,736.30, AUD 1,785.46 and CHF 1,609.01 per ounce. 

Gold’s London AM fix this morning was USD 1,765.50, EUR 1,310.40, and GBP 1,144.35 per ounce. 


Yesterday’s AM fix was USD 1,792, EUR 1,322.22, and GBP 1,155.23 per ounce. 

The FOMC minutes from yesterday’s meeting have led to falls in global stock markets as concerns over U.S. economic growth depress market sentiment further. Asian stocks have been hit hard with the Nikkei down 2% on the day. European markets have suffered further losses with the DAX, FTSE down between 3 and 4%. Gold is down 2% so far and looks technically weak. The Dollar index has risen sharply this morning to 78.328, a nearly 1% gain.

The economic growth consensus for the global landscape has turned sharply negative in the past number of weeks and expectations for growth have been reduced across the board. Monetary policies are now being adjusted accordingly. The FOMC notes indicate that FED will now extend the maturities by swapping near term debt will longer term, thus artificially flattening the yield on debt over the longer term.

When capital is cheap it is misallocated.
These are desperate times, and the pervasiveness of official intervention across the major global economies is in itself causing potentially greater problems for the future. It has been argued that lax monetary policies of the past 10 years led to massive re-distribution and arguable misallocation of credit (housing, equity bubbles, and now bond bubbles), coupled with a disconnected regulatory environment where foreign governments do not operate in lock step to manage risks emanating from globalisation. 

It now seems that recent)history is now repeating itself albeit on the other side of the economic cycle.  The IMF have argued in their World Economic Outlook Report and elsewhere that the current exceptionally low interest rates are spurring a hunt for yield at the expense of traditional investment styles. This is causing an aberration in the market where capital is flowing into emerging markets faster than it would otherwise be expected to do so.

A section of the report that is worthy of closer attention, reproduced below, acknowledges the role precious metals may play in response to further political crisis.

Weak policy responses to the crisis and additional risks surround weak policies in the euro area, Japan, and the United States. These give rise to two concerns, including the potential for (1) sudden investor flight from the public debt of systemically important economies and (2) brute force fiscal adjustment or loss of confidence because of a perceived lack of policy room. Under either scenario, major declines in consumer and business confidence are likely, leading to sharp increases in saving rates that undercut activity. 

Investors could take flight from government debt of key sovereigns. There are few signs of flight from U.S. or Japanese sovereign debt thus far, and few substitute investments are available. Although sovereign credit default swap (CDS) spreads on U.S. debt have moved up lately and U.S. government debt experienced one rating downgrade, the impact on long-term interest rates of the end of the Federal Reserve’s  E2 has been offset by inflows into Treasury securities. Interest rates on Japan’s public debt remain very low, despite adverse shocks to the public finances resulting from the earthquake and tsunami. Nonetheless, without more ambitious fiscal consolidation, a sudden rise in government bond yields remains a distinct possibility as long as public debt ratios are projected to rise over the medium term. Long-term rates on the debt of France, Germany, and a few other economies are also very low. However, this could change if commitments at the national or euro area level are not met. The risks could play out in various ways:

• Investors could increasingly reallocate their portfolios to corporate or emerging market debt: This would be the least disruptive scenario, because it could spur demand, although not without potentially raising problems related to absorptive capacity. 

• The term premium could rise as investors turn to short-term public debt: This would make the global economy more susceptible to funding shocks. 

• Rates could move higher across the yield curve, with depreciation of the U.S. dollar or the Japanese yen (mild credit risk): This might materialize in the context of a broader sovereign rating downgrade that does not upset the status of the United States as the major provider of low-risk assets or an accelerated reduction in the home bias of Japanese investors.

• A strong increase in credit risk could quickly morph into a liquidity shock, as global investors take flight into precious metals and cash: This could occur if there were major political deadlock on how to move forward with consolidation in the United States or if the euro area crisis were to take a dramatic turn for the worse. The global repercussions of such shocks would likely be very severe.

For the latest news and commentary please follow us on Twitter.

SILVER 
Silver is trading at $37.96/oz, €28.22/oz and £24.62/oz 

PLATINUM GROUP METALS 
Platinum is trading at $1,721.50/oz, palladium at $658/oz and rhodium at $1,725/oz

GOLDNOMICS - CASH OR GOLD BULLION?



'GoldNomics' can be viewed by clicking on the image above or on our YouTube channel:
www.youtube.com/goldcorelimited

This update can be found on the GoldCore blog here.

Yours sincerely,
Mark O'Byrne
Exective Director

IRL
63
FITZWILLIAM SQUARE
DUBLIN 2

E info@goldcore.com

UK
NO. 1 CORNHILL
LONDON 2
EC3V 3ND

IRL +353 (0)1 632 5010
UK +44 (0)203 086 9200
US +1 (302)635 1160

W www.goldcore.com

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

GoldCore Archive

© 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