Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Indian Dealers Seeing "Virtually No Demand for Gold" Despite Wedding Season

Commodities / Gold and Silver 2011 Dec 05, 2011 - 07:18 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleTHE DOLLAR gold price fell to $1731 per ounce by Monday lunchtime – 0.8% below where it ended last week – while stocks and commodities edged higher and US Treasury bond prices fell ahead of a meeting between the leaders of France and Germany in Paris.

"There is likely to be a fair amount of volatility on the political front this week," warns Nic Brown, head of commodities research at Natixis.


"Should sentiment improve further in the market," adds Commerzbank analyst Eugen Weinberg, "it wouldn't be surprising if [the gold price]falls again, but it may also come under pressure if the rest of commodity sector comes under pressure."

The silver price meantime dipped to $32.53 per ounce – still broadly in line with Friday's close – while yields on Italian and Spanish bonds continued to ease.

Italy's "huge public debt...is not Europe's fault," Italian prime minister Mario Monti told a press conference on Sunday.

"It is the fault of Italians."

Monti – who is also reported to be giving up his salary – was unveiling €30 billion of emergency austerity measures, including plans to remove inflation index-linking for many pensions.

Italy's welfare minister Elsa Fornero dissolved into tears when she tried to announce the measures, unable to utter the word 'sacrifice'.

In Paris meantime, French president Nicolas Sarkozy met German chancellor Angela Merkel today to discuss how the 17-member Eurozone might move towards the creation of a fiscal union. Merkel has repeatedly argued that greater fiscal discipline among Eurozone national governments – with a tougher set of budget rules – is the only way to provide a lasting solution to the crisis.

"For several months now, it's Merkel who decides and Sarkozy who follows," Francois Hollande, French Socialist Party presidential candidate, said last week. Fellow Socialist Arnaud Montebourg has described Merkel's policy as "Bismarck-like" – a reference to Germany's chancellor at the time of the Franco-Prussian war of 1870-71 – while Pierre Moscovici, an aide to Hollande, said today that a budgetary union would "erode our national sovereignty".

Front National leader Marine Le Pen – who has called for France to quit the Euro – also said this weekend that France's sovereignty is under threat.

Should agreement on further fiscal integration be reached at this Friday's European Union summit, then "the door should swing open for the [European Central Bank] to become more aggressive" reckons Erik Nielsen, global chief economist at Italian bank UniCredit.

Eurozone national central banks meantime could provide hundreds of billions of Euros to the International Monetary Fund, money that would then be put into a special fund from which to aid distressed European sovereigns, according to a report in German newspaper Die Welt. The US Federal Reserve may also contribute, the newspaper added.

The Netherlands has the most debt-burdened households in the Eurozone, according to a report in the Wall Street Journal. Many Dutch, it reports, took out mortgages worth 125% of their home's value in the years before the global financial crisis – leaving Netherlands households with a debt-to-income ratio of 249.5%. Second on the list is Portugal, the report says, with a ratio of 128.6%.

"From a financial stability perspective, we think the mortgage loan-to-value ratios are too high," says Gerbert Hebbink, senior economist at the Dutch National Bank.

"This debt makes the economy much more vulnerable to shocks in the housing market, interest rates and employment."

The number of bullish minus bearish contracts held by noncommercial gold futures and options traders on New York's Comex exchange – the so-called speculative net long – fell for a second week running in the week ended 29 November, dropping 2.5%, according to data published Friday by the Commodity Futures Trading Commission. Over the same period, the Dollar gold price rose 0.5%.

Total open interest meantime – the total number of unsettled contracts from the period – fell 4.7%, its third weekly fall.

"That the gold price has risen against falling open interest on Comex does imply a weaker market, with caution central for now and somewhat transfixed on both positive and negative news flows," said a note from precious metals consultants VM Group this morning.

Over in India – the world's largest source of private gold bullion demand – the Rupee gold price approached all-time highs Monday morning as the Rupee fell against the Dollar.

Despite India being in the middle of the wedding season, "there is virtually no demand for gold" says Prithviraj Kothari, president of the Bombay Bullion Association.

"Demand is very slack," agrees Vasu Acharya director at Parker Bullion in Ahmedabad.
"If you compare it with last year, it is just 20% of the sales."

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.


© 2005-2022 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