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
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 Building a Base above $1650

Commodities / Gold and Silver 2011 Oct 14, 2011 - 08:08 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleWHOLESALE prices for gold bullion climbed to $1679 an ounce Friday morning London time – 0.7% down on Wednesday's high for the week – before easing back, as industrial commodities rallied and stocks edged up, while government bond prices fell.

Silver bullion climbed to $32.31 per ounce – 3.6% up on last week's close – before it too fell back.


"Quiet market today in terms of flow," says one gold bullion dealer in Hong Kong.

"Gold for the moment continues to base build above the $1650 level," adds Swiss precious metals refiner MKS.

"It remains underpinned by strong seasonal physical demand and retail investment interest. In the short-term however, the metal still has to overcome resistance above the $1685 mark before more bullish sentiment manifests itself."

Heading towards the weekend, gold bullion looked set for a 2.1% weekly gain by lunchtime in London. This would be the biggest weekly since the week ended 2 September – although six weeks ago an ounce of gold bullion cost over 10% more than it does today.

Economic policymakers from the world's largest economies are considering expanding the size of the International Monetary Fund – possibly through contributions from emerging market countries – to prepare it for future crises, news agency Bloomberg reported Friday.

Christine Lagarde, IMF managing director, warned last month that the $390 billion at the Fund's disposal may not be enough to meet all future loan requests.

The emerging market BRICS economies – Brazil, Russia, India, China and South Africa – are reported to be in favor of contributing, according to newswire Reuters.

Last month saw speculation that China was preparing to buy significant sums of distressed Eurozone sovereign debt, following a meeting between Chinese officials and Italy's finance minister Giulio Tremonti.

However, "if emerging economies and the BRICS are called upon to contribute, we can do it via the International Monetary Fund," Reuters quoted one anonymous source this morning.

"India is open to it, China and Brazil are also okay with the idea as well."

"Emerging markets, in particular China, may feel the pressure at this point to make some gestures to help the West," reckons Credit Agricole strategist Dariusz Kowalczyk in Hong Kong.

"They do not want to invest too much given that the West's problems are of its own making, and if they help, they want to do so in a way that brings them benefits and recognition."

"The very idea that capital-rich Europe needs help from capital-poor BRIC nations to fund itself verges on the absurd," says Michael Pettis, finance professor at Peking University's Guanghua School of Management.

"European governments are unable to fund themselves not because Europe needs foreign capital. It has plenty. They are unable to fund themselves because they have unsustainable amounts of debt, a rigid currency system that will not allow them to adjust and grow, and the concomitant lack of credibility."

Europe's leaders have been "behind the curve" for the last few years, South Africa's finance minister Pravin Gordhan said in a speech today ahead of the G20 meeting.

"We would be looking forward for assurances from our European colleagues that by the time the summit of the G20 takes place [on 3-4 November] we will have a clear message that will create confidence that Europe is dealing with its issues."

Gordhan added that neither the IMF nor the €440 billion European Financial Stability Facility would have adequate resources were the debt crisis to spread further, and that South African assistance "all depends on how the EFSF is leveraged".

Elsewhere in Europe, ratings agency Standard & Poor's has downgraded Spain's debt from AA to AA-.

"All advanced economies are being x-rayed by the present crisis," says outgoing European Central Bank president Jean-Claude Trichet in an interview in today's Financial Times.

"It's true for all of us – for Japan, for the US, for Europeans."

German banks meantime are preparing to lose up to 60% on their holdings of Greek bonds, according to a Bloomberg report that cites unnamed sources. Luxembourg's prime minister Jean-Claude Juncker, who chairs the Eurogroup of single currency finance ministers, said earlier this week that Greek debt losses could be even higher than this.

Gold bullion will be "increasingly used as the line of defense against negative market outcomes," says a note from UBS, citing "ongoing global macroeconomic disappointments" and "the inevitability of further negative turns in the European sovereign debt crisis".

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