Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20
Does the Stock Market Really "See" the Future? - 12th Sept 20
Basel III and Gold, Silver and Platinum - 12th Sept 20
Tech Stocks FANG Index Nearing Critical Support – Could Breakout At Any Moment - 12th Sept 20
The Tech Stocks Quantum AI EXPLOSION is Coming! - 12th Sept 20
AMD Zen 3 Ryzen 4000 Questions Answered on Cores, Prices, Benchmarks and Threadripper Launch - 12th Sept 20
The Inflation Mega-trend is Going Hyper! - 11th Sep 20
Gold / Silver Ratio: Slowly I Toined… - 11th Sep 20
Stock Market Correction or Reversal? The Jury Isn't Out! - 11th Sep 20
Crude Oil – The Bearish Outlook Remains - 11th Sep 20
Crude Oil Breaks Lower – Sparking Fears Of Another Sub $30 Price Collapse - 11th Sep 20
Inflation by Fiat - 10th Sep 20
Unemployment Rate Drops. Will It Drag Gold Down? - 10th Sep 20
How Does The Global Economy Recover After This Global Pandemic? - 10th Sep 20
The Best Mobile Casino - 10th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold Silver Ratio Jumps, ECB Points to Deflation Risk

Commodities / Gold and Silver 2011 Dec 02, 2011 - 01:47 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleWHOLESALE PRICES in the gold investing market continued to rise Thursday morning in London, extending yesterday's 2.8% jump after the world's biggest central banks offered unlimited short-term loans to their local banking sectors.

Crude oil also held near two-week highs after the United Kingdom called for "international financial isolation" of Iran following this week's attack on its embassy in Tehran.


The Euro currency traded just shy of $1.35 – some 2.5¢ above Wednesday's start – as Spain successfully sold €3.75 billion in new 5-year debt, offering the highest interest rate since 2005 according to Bloomberg.

European stock markets failed to extend yesterday's 3% jump, however, drifting sideways by lunchtime.

"The ECB's monetary policy is constantly guided by the goal of maintaining price stability in the Euro area over the medium term," said Mario Draghi Thursday morning in his second speech as European Central Bank president.

"And when I say this, I mean price stability in either direction," he added – meaning both the threat of inflation and of deflation in prices.

There are "only 10 days to save the Euro" said a raft of newspaper and website headlines Thursday, quoting Euro commissioner Ollie Rehn's reference yesterday to the European summit to be held in Brussels at the end of next week.

Urging tighter Eurozone fiscal co-operation, "A credible signal is needed to give ultimate assurance over the short term," said the ECB's Draghi today.

Wednesday's $30 rise in gold investing prices saw the metal "trading right through the previous trendline resistance," says the latest chart analysis from bullion bank Scotia Mocatta.

"This has shifted intermediate term technicals to neutral. We would like to see the trendline hold on the downside, around $1720, to confirm a trend reversal" after gold investing prices slid from a record peak of $1920 in early September.

"The 30-week moving average at $1652.61 continues to offer good support," according to the latest technical analysis from Axel Rudolph at Commerzbank.

But "Year-end is approaching and few investors want to be heroes," says UBS precious-metals analyst Edel Tully, citing a stronger Dollar and a lack of "conviction" amongst gold buyers for gold not attracting "safe haven" flows amid the Eurozone crisis.

The MSCI Barra index of global stock markets surged 3% on Wednesday to end November 0.8% higher.

Physical gold prices rose 1.4% last month against the US Dollar, while the Euro currency fell over 3% and silver prices fell more than 8%.

Wednesday saw the Gold/Silver Ratio – which shows how many ounces of silver it takes to buy 1 ounce of gold – jump to 55.7, its highest level since late September.

Averaging 53 since the gold price was allowed to float in 1968, the Gold/Silver Ratio hit a 3-decade low of 32 in May this year, as silver prices doubled inside six months to near all-time record highs.

"[Gold investing] clearly cannot be defined as having been a bubble," Bloomberg today quotes Credit Suisse's precious metals analyst Tom Kendall.

The volume of gold bullion held to back shares in exchange-traded trust funds yesterday rose to a fresh record of 2,356 tonnes, the newswire says, worth $133 billion at today's London Gold Fix.

Jewelry sales in China – the world's No.2 gold consumer market – could reach CNY330 billion ($52bn) in full-year 2011 according to Cheng Binghai, chairman of the Shanghai Gold & Jewelry Trade Association.

China now accounts for a quarter of Australia's mineral and energy exports, which reached a quarterly record of A$49 billion (US$50bn) between July and Oct. according to new data today, driven by higher prices for coal and gold mining output

But a survey from HSBC Bank yesterday showed China's manufacturing sector contracting for the first time since Feb. 2009, with new export orders falling sharply, while the People's Bank of China cut the amount of savers' deposits which commercial banks must keep back, rather than lending on, by half-a-percent to 20.0%.

"This is the first time in 3 years that the central bank has lowered the required reserve requirement," says Beijing's Economic Observer, "an indication that the central bank may gradually be starting to loosen monetary policy settings."

Japan's steel industry will cut its output sharply this quarter, the head of Nippon Steel told a conference today.

Brazil's central bank yesterday cut interest rates in Latin America's largest economy by half-a-point for the third month running.

"Given the low growth environment [worldwide], we do not feel it is prudent to be long on the commodity complex indiscriminately," said a report from Morgan Stanley analysts earlier this week.

"The defensive nature of gold should continue to support investment demand as investors look for safe havens," the report says, repeating the investment bank's call for gold investing to outperform other commodities in 2012, rising to an average price of $2,200 per ounce.

"A continued low or negative real interest rate environment will also provide support" for gold investing, the Morgan Stanley team believe.

By Adrian Ash
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Formerly City correspondent for The Daily Reckoning in London and a regular contributor to MoneyWeek magazine, Adrian Ash is the editor of Gold News and head of research at www.BullionVault.com , giving you direct access to investment gold, vaulted in Zurich , on $3 spreads and 0.8% dealing fees.

(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