Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

AI Stocks 2020-2035 15 Year Trend Forecast

Gold Drops through $1700, Draghi Faces "Baptism of Fire" after Greece Referendum Curveball

Commodities / Gold and Silver 2011 Nov 01, 2011 - 08:16 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleU.S.DOLLAR gold prices dropped through $1700 an ounce Tuesday lunchtime in London – at one point showing a 3.3% fall from last week's close – as stock and commodity markets were also hit following news that the Greek prime minister has called for a referendum on last week's Euro Summit deal.

Physical gold trading was quiet, news agency Reuters reports, with premiums in Hong Kong falling to around $1 per ounce, having been $1.50 last week.


"Jewelry sector demand has been quiet as jewelers are unwilling to keep much of an inventory," reckons Dick Poon of precious metals group Heraeus.

"They are worried about consumption in Europe and the United States in Christmas holiday season, with the economic uncertainty looming large."

Silver prices meantime fell to $32.77 per ounce – 7.2% down on last Friday's close.

Tuesday's fall in gold prices follows a strong month for gold last month. Dollar gold prices, based on the London Fix, rose over 6% in October.

Stocks meantime had their best month in over two years, with the MSCI World Index up 11% according to data compiled by Bloomberg.

Despite that, stocks have had a poor start to November this morning. The FTSE was down 3.1% by lunchtime, while Germany's DAX lost over 5% of its value.

European stocks "are so cheap" says hedge fund manager Barton Biggs, known for his contrarian views.

"I must admit I don't own hardly any European stocks, but I'm intrigued by them...because it would certainly be a contrarian trade."

Greek prime minister George Papandreou announced late Monday that Greece will hold a referendum on last week's Euro Summit deal – although no firm date was given.

"The people will be asked whether they want to adopt [the deal] or reject [it]," said Papandreou.
"This sounds to me like someone is trying to wriggle out of what was agreed," retorts Rainer Bruederle, former German minister of economics and a member of junior coalition partner the Free Democratic Party.

"One can only do one thing: make the preparations for the eventuality that there is a state insolvency in Greece and if it doesn't fulfill the agreements, then the point will have been reached where the money is turned off."

"The Greek referendum is a real curve ball," says Steven Saywell, head of FX strategy at BNP Paribas. 

"Nobody saw it coming and it injects a lot of uncertainty." 

Elsewhere in Europe, yields on 10-Year Italian government bonds rose for the third day running, breaching 6.25%. The spread above benchmark German bund yields hit a Euro era high at 4.37 percentage points.

The European Central Bank began buying Italian (as well as Spanish) government debt on the open market back in August, the last time Italian yields were at these levels.

Former Italian central bank governor Mario Draghi – who takes over as ECB president today – said last week that the Eurosystem of central banks "is determined, with its non-conventional measures, to prevent malfunctioning in the money and financial markets creating an obstacle to monetary transmission."

Draghi's comments were seen by some as a coded hint that the ECB would continue buying Italian debt, along with that of other troubled sovereigns. However, outgoing ECB president Jean-Claude Trichet has said this is a misinterpretation.

"This will be a baptism of fire for Draghi," says Nick Kounis, Amsterdam-based head of macro research at ABN Amro.

In New York meantime broker dealer MF Global filed for bankruptcy yesterday, having reportedly taken writedowns on Eurozone sovereign debt following last week's Euro Summit deal. The New York Times reports that US regulators are investigating claims that hundreds of millions of dollars in customer money has gone missing from MF Global over the last few days.

Here in the UK, GDP grew at 0.5% during the third quarter, according to figures published by the Office for National Statistics on Tuesday.

"The good news is that UK GDP growth came in slightly above expectations," says Howard Archer, chief UK economist at IHS Global Insight.

"The bad news is that this performance overstates the underlying strength of the economy and this is likely to be as good as it gets for some time to come."

"We are living through the greatest credit crisis of our generation," Bank of England Financial Policy Committee member Robert Jenkins said in a speech last month, published on the Bank's website this morning.

"And needless to say, it is not over."

The Organisation for Economic Co-operation and Development yesterday cut its global growth forecast, less than two months after it last revised it downwards.

Argentina's government meantime has imposed restrictions on those wishing to exchange Pesos for US Dollars.

"This is an important measure to combat tax evasion and money laundering," said finance minister Amado Boudou, though others have suggested the move is aimed at stemming capital flight that has been a drain on Argentina's foreign exchange reserves.

The restrictions "may backfire as it may lead agents to accelerate Dollar buying in anticipation of potentially even more restrictive/punitive regulations in the near future," reckons Alberto Ramos, economist at Goldman Sachs.

China's manufacturing sector showed signs of a slowdown last month, according to the latest official purchasing managers index data. China's manufacturing PMI for October fell to 50.4 – compared to 51.2 in September (a figure above 50 indicates expansion).

Vietnam's central bank meantime is seeking to restrict gold bullion trading. The draft decree from the State Bank of Vietnam includes a reduction in the number of bullion traders, restrictions on manufacturing of gold bars and powers to intervene in the domestic gold market, where there have been accusations of traders manipulating domestic gold prices.

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

6 Critical Money Making Rules