Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
A Lesson About Gold – How Bullish Can It Be? - 24th Jan 20
Stock Market January 2018 Repeats in 2020 – Yikes! - 24th Jan 20
Gold Report from the Two Besieged Cities - 24th Jan 20
Stock Market Elliott Waves Trend Forecast 2020 - Video - 24th Jan 20
AMD Multi-cores vs INTEL Turbo Cores - Best Gaming CPUs 2020 - 3900x, 3950x, 9900K, or 9900KS - 24th Jan 20
Choosing the Best Garage Floor Containment Mats - 23rd Jan 20
Understanding the Benefits of Cannabis Tea - 23rd Jan 20
The Next Catalyst for Gold - 23rd Jan 20
5 Cyber-security considerations for 2020 - 23rd Jan 20
Car insurance: what the latest modifications could mean for your premiums - 23rd Jan 20
Junior Gold Mining Stocks Setting Up For Another Rally - 22nd Jan 20
Debt the Only 'Bubble' That Counts, Buy Gold and Silver! - 22nd Jan 20
AMAZON (AMZN) - Primary AI Tech Stock Investing 2020 and Beyond - Video - 21st Jan 20
What Do Fresh U.S. Economic Reports Imply for Gold? - 21st Jan 20
Corporate Earnings Setup Rally To Stock Market Peak - 21st Jan 20
Gold Price Trend Forecast 2020 - Part1 - 21st Jan 20
How to Write a Good Finance College Essay  - 21st Jan 20
Risks to Global Economy is Balanced: Stock Market upside limited short term - 20th Jan 20
How Digital Technology is Changing the Sports Betting Industry - 20th Jan 20
Is CEOs Reputation Management Essential? All You Must Know - 20th Jan 20
APPLE (AAPL) AI Tech Stocks Investing 2020 - 20th Jan 20
FOMO or FOPA or Au? - 20th Jan 20
Stock Market SP500 Kitchin Cycle Review - 20th Jan 20
Why Intel i7-4790k Devils Canyon CPU is STILL GOOD in 2020! - 20th Jan 20
Stock Market Final Thrust Review - 19th Jan 20
Gold Trade Usage & Price Effect - 19th Jan 20
Stock Market Trend Forecast 2020 - Trend Analysis - Video - 19th Jan 20
Stock Trade-of-the-Week: Dorchester Minerals (DMLP) - 19th Jan 20
INTEL (INTC) Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 18th Jan 20
Gold Stocks Wavering - 18th Jan 20
Best Amazon iPhone Case Fits 6s, 7, 8 by Toovren Review - 18th Jan 20
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Hovers as Dominance of Dollar Could End as IMF Considers Increasing Liquidity

Commodities / Gold and Silver 2011 Nov 04, 2011 - 09:46 AM GMT

By: Ben_Trayner


Best Financial Markets Analysis ArticleDOLLAR PRICES for gold bullion continued moving in a range bound fashion around $1758 an ounce – 8.3% up from where they began October – after the release of US nonfarm payroll data, which showed the US economy added 80,000 jobs last month.

The unemployment rate meantime fell to 9.0% in October – down from 9.1%, where it spent the previous three months.

Silver bullion meantime hovered around $34.40 per ounce – 14.8% above where it started last month – while stocks, commodities and government bond prices were also flat.

Heading into the weekend, gold bullion prices were looking at a slight gain of around 1% for the week – though the trough-to-peak difference was 5%. 

"A chaotic session [on Thursday] brought gains for all four precious metals, albeit with some vicious swings along the way," said one gold bullion dealer in London this morning.

"Yesterday's price action seemed in thrall to the constantly changing headlines emanating from Europe."

"I think gold is really supported by the [crisis in the] Eurozone," adds Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.

G20 leaders meeting in Cannes are considering using the International Monetary Fund's Special Drawing Rights as a way of boosting global monetary liquidity, newswire Reuters reports.

SDRs are accounting units created by the IMF and allocated by it to member countries, and take the form of a weighted currency basket comprising Dollars, Euros, Sterling and Yen. They were introduced in 1969 to support the Bretton Woods fixed exchange rate system, which was effectively ended two years later when US President Nixon cut the Dollar's link to gold bullion.

"The G20 will be specific in their determination to increase resources," an unspecified G20 official told Reuters, "but it is unclear how specific they will be."

"Global the dominant causal driver for gold," argued Walter de Wet, commodities strategist at international gold bullion Standard Bank, back in August – reiterating Standard's long-held position on what is driving the gold price.

The IMF has also proposed creating a new six-month lending facility, which could form part of the mechanism by additional SDRs are used to boost global liquidity, the Financial Times reports.

"This has been in the works as a way to provide some assurance to emerging markets that their interests won't get completely sidetracked if the Fund focuses on Europe in its lending operations," says former IMF official Eswar Prasad, now at Washington think tank the Brookings Institution.

"It is a savvy move by the G20 and IMF to justify an SDR allocation and other mechanisms to add to the IMF's resource pool by signaling that the new resources won't be devoted entirely to saving Europe."

Brazil's finance minister Guido Mantega last month opposed the notion of Brazil buying European bonds, adding that any assistance should come through the IMF.

G20 leaders should "reform the SDR currency basket," China's president told the summit on Thursday, "and build an international reserve currency system with stable value, rule-based issuance and manageable supply."

"The world is now loath to see the dominance of the Dollar," adds Li Jianjun, analyst at the state-owned Bank of China.

"[This] opens doors for change."

The Chinese government today published the text of President Hu's G20 speech.

"There is nothing [in the speech] to suggest China will stump up any cash to help Europe," says the FT's Chris Giles.

Greek prime minister George Papandreou meantime faces a confidence vote later on Friday. His governing Pasok party holds 152 of the 300 seats in Greece's parliament – though several Pasok members have said they will not support Papandreou, meaning he will need opposition support to win.

Papandreou last night dropped his call for a Greek referendum on last week's Euro Summit deal, which was previously expected to take place next month.

Italy meantime "has decided on its own initiative to ask the IMF to monitor the implementation of its [austerity] commitments," European Commission president Jose Manuel Barroso said Friday.

"The likelihood of Eurozone worries disappearing with a 'snap of a fingers' is very little," says a note from Swiss gold bullion refiner MKS.

"[This] will probably benefit gold in the coming sessions as the metal slowly regains is safe-haven and store of value characteristics."

By Ben Traynor

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 - 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