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 Climbs as Euro Crisis Terrifies Markets

Commodities / Gold and Silver 2011 Oct 25, 2011 - 06:26 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleU.S. DOLLAR spot gold prices climbed to $1664 an ounce Tuesday morning London time – 1.8% off the month's high – while stocks and commodities also gained and US Treasury bonds fell, following reports that European negotiators are demanding larger Greek debt writedowns.

"Strong resistance is pegged...[at] the 100-day moving average of $1665," said yesterday's note from Swiss gold bullion refiner MKS.


Were spot gold to close below $1638, however, this "would indicate the downside potential of the metal" MKS added.

Tuesday saw silver prices climb to $32.13 per ounce – a 2.4% gain for the week so far.

Greek government bond holders have been asked by European negotiators to take a 60% 'haircut' on the value of their holdings, according to a report in the Financial Times, ahead of tomorrow's second European debt crisis summit.

French officials – along with those of the European Central Bank and the International Monetary Fund – are reportedly wary that such a writedown would trigger credit default swaps, a form of insurance contract written against sovereign default, which could in turn threaten the financial institutions that would have to pay out.

"The CDS market is not very transparent," explains Jacques Cailloux, European economist at Royal Bank of Scotland.

"You don't know where the exposures are."

Despite their reservations, France, the ECB and the IMF agreed over the weekend to give Vittorio Grilli – director general of Italy's Treasury Department and the Eurozone's lead negotiator with the banks – a mandate to negotiate for 60% haircuts.

"It is advisable to avoid any restructuring that is not purely voluntary or that shows elements of compulsion, and to avoid any credit events and selective default or default," Yves Mersch, governor of Luxembourg's central bank and a member of the ECB governing council, said on Monday.

"There are limits, however, to what could be considered voluntary," warned Charles Dallara, chief negotiator for the Institute of International Finance, which is representing private sector bondholders.

"Any approach that is not based on cooperative discussions and involves unilateral actions would be tantamount to default... it would also likely have severe contagion effects, which would cost the European and the world economy dearly in terms of employment and growth."
"You don't need to be paranoid to be terrified," the FT quotes someone familiar with the negotiations.
"I don't think Europe will be out of the woods yet," says Bernard Sin, Geneva-based head of currency and metal trading at MKS.

"[Plus] there is physical demand out of India...nobody really wants to go short on gold."

Dealers report that strong Indian demand kept gold premiums high across Asia for most of Tuesday's session. Premiums in Hong Kong were around $2 per ounce above spot gold, while in Singapore the gap between deal prices and spot gold was around $1.50 per ounce.

"We still don't have spare stocks and clients need to pre-book orders," one Singapore dealer told newswire Reuters.

Following a quiet month, several reports suggest gold sales in India picked up yesterday, which saw the celebration of Dhanteras, the first of the five-day Diwali festival.

"We are expecting 60% more in terms of value as compared to [Dhanteras] last year," says Mehul Choksi, chairman and managing director of Mumbai-headquartered jewelers Gitanjali Group.

In tonnage terms, Indian gold demand for the fourth quarter 2010 was 37% higher than for the same period a year earlier, according to data published by the World Gold Council. Year-on-year demand growth was 30% in Q4 2009 compared to Q4 2008, and 99% between Q4 2007 and a year later.

"This season, though, sales volumes are down by 30% as compared to the previous season," says Prithviraj Kothari, director of Riddhi Siddhi Bullions in Mumbai and president of the Bombay Bullion Association.

"People have bought two grams on an average compared to 10 grams last year...the value is higher owing to increased rates."

The Rupee has fallen more than 10% against the Dollar since this time last year – meaning the price of gold in India has risen faster than the spot gold price quoted on international markets.

Over in the US, sales of American Eagle bullion gold coins by the US Mint could fall 32% this month compared to September, news agency Bloomberg reports.

The US Mint sold 41,500 ounces of American Eagle bullion coins this month to October 20 – compared to 91,000 ounce last month and 112,000 ounces in August.

The gross tonnage of gold held to back shares in the SPDR Gold Trust (ticker GLD) – the world's largest gold ETF – meantime rose for the first time in over a month on Monday, climbing 0.5% to 1233.6 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