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 Rebounds, Greek People asked to say "Yes or No" to Euro, FOMC "To Lay Ground for QE2"

Commodities / Gold and Silver 2011 Nov 02, 2011 - 07:16 PM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleTHE SPOT MARKET gold price climbed to $1736 an ounce in early London trading – 3.1% above Tuesday's low – before falling back a bit, while European stock makrets halted recent steep declines but failed to stage a convincing rally following news that Greece's prime minister had been summoned to France to explain himself after calling for a referendum on last week's bailout deal.


"This latest development...will make markets that much more skeptical of the reassurances that inevitably will be offered by other Eurozone leaders in the coming days," says one gold bullion dealer here in London.

"The medium term trend in the gold price remains bullish," adds Commerzbank technical analyst Axel Rudolph, "while [gold is] trading above the $1595.65 October low."

Silver prices hovered around $33.80 per ounce – 4.3% down for the week so far.

On the futures markets, prices for most commodities edged higher, while US, UK and German government bonds all sold off.

The Euro rallied against the Dollar after three days of losses – though it remains significantly below where it was a few days ago.

Greek prime minister George Papandreou was summoned to Cannes on Wednesday for a meeting with German chancellor Angela Merkel and French president Nicolas Sarkozy, ahead of the G20 summit.

The meeting follows Papandreou's call for Greece to hold a referendum on the bailout package agreed last week.

The Greek cabinet last night backed Papandreou's referendum call – although some ministers reportedly expressed their reservations, but decided to back the government ahead of a confidence vote scheduled for this Friday.

"The dilemma isn't 'This or another government'," Papandreou told his ministers on Wednesday before heading to Cannes.

"The dilemma is 'Yes or no to the loan accord', 'Yes or no to Europe', 'Yes or no to the Euro.'"

"Giving the people a say is always legitimate," French president Nicolas Sarkozy said last night.

"But the solidarity of all countries of the Eurozone cannot work unless each one consents to the necessary efforts...[last week's deal] is the only way to solve Greece's debt problem."

"[The deal to which] we just agreed last week cannot be placed back on the table," added German foreign minister Guido Westerwelle.

Last week's agreement included a 50% 'haircut' on private sector-held Greek bonds.

However, points out Michael Kemmer, head of Germany's banking lobby, "I can't imagine a debt exchange taking place before the referendum."

The Greek government says the referendum will take place "as soon as possible", once the details of the bailout are known.

The Euro rallied over 2% against the Dollar last Thursday after the deal was announced. Since then, however, it has fallen by over 4%.

The Euro gold price on Wednesday morning meantime were around 3% higher than last Thursday's low.

Elsewhere in Europe, a €3 billion auction of European Financial Stability Facility bonds scheduled for today has been postponed, with the lead managers on the issue citing "recent market volatility".

Klaus Regling, EFSF chief executive, last week travelled to China and Japan to present the advantages of investing debt issued by the triple-A rated Eurozone bailout fund. Neither country committed to buying bonds.

Italian 10-Year government bond yields remained above 6% Wednesday morning despite retreating from Tuesday's highs.

Yields on shorter-dated debt meantime have risen sharply since last Thursday. Italian 6-Month Treasury Bill yields have risen from 3.5% to 4.5%, while 12-Month have gone from 3.8% to nearly 5.2%.

Back in July, Italy cancelled an auction of medium and long-dated bonds scheduled for August, announcing that 12-Month Bills would be regularly offered instead.

German unemployment meantime rose in October by 10,000 people – the first monthly unemployment rise since February 2010 – according to official data released this morning.

"People who hadn't realized before should realize now that Europe's issues will continue to be troublesome and difficult," says Jeremy Friesen, Hong Kong-based commodities strategist at Societe Generale.

"There will continue to be risks, which will put more and more pressure on central banks...to be more accommodative," a development which Friesen adds "will be bullish" for the gold price.

Over in Washington, the Federal Open Market Committee – which decides US monetary policy – is due to conclude its two-day policy meeting later today.

"We are becoming increasingly persuaded that QE3 is coming," says Dana Saporta, US economist at Credit Suisse in New York, referring to a possible third round of quantitative easing.

"The best guess is at this meeting they'll try to build some consensus around the idea and lay the groundwork for eventual purchases."

Private sector employment in the US rose by 110,000 people last month – compared to 116,000 in September – according to the ADP Employment Change report, published today by payroll services firm Automatic Data Processing. The ADP report is released each month ahead of the US Bureau of Labor Statistics nonfarm payrolls data.

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