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
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 Falls on 'Black Friday'

Commodities / Gold and Silver 2011 Nov 25, 2011 - 07:14 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleU.S. DOLLAR gold prices looked set for a second weekly drop in a row Friday lunchtime, after falling as low as $1672 an ounce – 7.2% down on the November high – while stocks, commodities and government bond prices also lost ground as Belgium became the latest country to be sucked into the European sovereign bond crisis.

New York's Comex gold futures exchange will close early today – having been shut for Thanksgiving yesterday – as US shoppers hit the stores in search of Black Friday discounts.


Heading into the weekend, Dollar gold prices looked set for a loss of nearly 3% on the week.
"There are two factors which are putting downward pressure on gold," says Standard Bank commodities strategist Walter de Wet.

"The first is weak emerging market currencies in general, and the Indian Rupee in particular. The second is funding stress in Europe."

In spite of this morning's fall in gold prices, "we still haven't seen any significant physical demand coming through," de Wet adds.

"I think sentiment in the physical side is not that bearish," says one Hong Kong trader.
"But the funds are more cautious because of fears of recession...[they] are worried that their clients will redeem assets to get more cash on hand."

Silver prices also fell, hitting $31.10 per ounce – and headed for weekly loss of around 4%.
On the stock markets, by Friday lunchtime both the UK's FTSE and Germany's DAX looked to be heading for their tenth straight daily loss – down 0.4% and 0.5% respectively.

Dexia – the Franco-Belgian bank whose Belgian division was nationalized last month – is drawing down emergency liquidity funds from central banks in Belgium, France, Italy and Spain, news agency Reuters reported Thursday.

Dexia is waiting for the governments of Belgium, France and Luxembourg – which last month pledged to guarantee €90 billion of the banking group's borrowing for ten years – to finalize the arrangement.

Yields on 10-Year Belgian government bonds rose to 5.81% this morning – up from 3.6% at the start of October.

"I think Belgium will be included in the ECB buying program," one trader told Reuters.

"I don't see how they can avoid it now that yields are getting up towards 6%".

Elsewhere in Belgium, "another [European Central Bank] rate cut will likely follow...if the current [economic] trends continue" Belgian central bank governor Luc Coene – who is also on the ECB's 23 member Governing Council – said Friday, Belgian newspaper De Tijd reports.

Coene also reportedly saidthe ECB's policy of buying distressed sovereign bonds on the open market, is not sustainable.

"The markets would notice that ECB has a lot of Italian and Spanish paper on its balance sheet and they would lose confidence in the ECB," De Tijd quoted Coene.

French and German leaders will seek a "positive compromise" on the question of what role the ECB should play in resolving the sovereign debt crisis, French president Nicolas Sarkozy said yesterday.

Sarkozy – who held talks with German chancellor Angela Merkel and Italian prime minister Mario Monti – said that he and Merkel have agreed to refrain from discussing the matter publicly.

"The three of us have indicated that we will respect the independence of this essential institution and we agreed that we should refrain making any demand, positive or negative, on it," Sarkozy said.

French finance minister Francois Baroin has previously called for a "solid firewall" with ECB backing to prevent contagion. Merkel said earlier this month that any politicians who believe the ECB can solve the Euro crisis were "trying to convince themselves of something that won't happen".

"We must take steps toward a fiscal union," Merkel said yesterday.

Italy successfully auctioned €8 billion worth of 6-month Treasury bills Friday morning. The average yield, however, was 6.504% – the highest since August 1997, and up from 3.535% at the last 6-month T-bill auction on October 26.

Ratings agency Moody's meantime issued its latest sovereign downgrade late Thursday, when it cut Hungary's rating one notch from Ba1 to Baa3 – sending Hungary's bonds into 'junk' territory.

Over in India, total silver bullion imports for 2011 are expected to come in slightly lower than last year's 3030 tonnes , according to a senior bullion bank executive.

"Silver business [by volume] is not that significant," Rajan Venkatesh, managing director, India bullion at Scotia Mocatta told reporters Thursday.

2011 Indian gold imports, by contrast, could rise to 1000 tonnes, Venkatesh says– despite Rupee gold prices hitting record highs this month.

Since the start of the year, the Rupee has fallen 15% against the Dollar, hitting an all-time low earlier this week.

The value of India's gold consumption last year was approximately 2.5% of 2010 gross domestic product, according to BullionVault calculations based on World Gold Council and International Monetary Fund data.

India's current account deficit last year was $49.0 billion – 3.2% of GDP – according to the IMF. IMF projections forecast that this will grow to $62.5 billion for 2011 – 3.7% of GDP.

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