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 Price 2021 Roadmap - 22nd Jan 21
Why Biden Wants to Win the Fight for $15 Federal Minimum Wage - 22nd Jan 21
Here’s Why Gold Recently Moved Up - 22nd Jan 21
US Dollar Decline creates New Sector Opportunities to Trade - 22nd Jan 21
Sandisk Extreme Micro SDXC Memory Card Read Write Speed Test Actual vs Sales Pitch - 22nd Jan 21
NHS Recommends Oximeter Oxygen Sensor Monitors for Everyone 10 Months Late! - 22nd Jan 21
DoorDash Has All the Makings of the “Next Amazon” - 22nd Jan 21
How to Survive a Silver-Gold Sucker Punch - 22nd Jan 21
2021: The Year of the Gripping Hand - 22nd Jan 21
Technology Minerals appoints ex-BP Petrochemicals CEO as Advisor - 22nd Jan 21
Gold Price Drops Amid Stimulus and Poor Data - 21st Jan 21
Protecting the Vulnerable 2021 - 21st Jan 21
How To Play The Next Stage Of The Marijuana Boom - 21st Jan 21
UK Schools Lockdown 2021 Covid Education Crisis - Home Learning Routine - 21st Jan 21
General Artificial Intelligence Was BORN in 2020! GPT-3, Deep Mind - 20th Jan 21
Bitcoin Price Crash: FCA Warning Was a Slap in the Face. But Not the Cause - 20th Jan 21
US Coronavirus Pandemic 2021 - We’re Going to Need More Than a Vaccine - 20th Jan 21
The Biggest Biotech Story Of 2021? - 20th Jan 21
Biden Bailout, Democrat Takeover to Drive Americans into Gold - 20th Jan 21
Pandemic 2020 Is Gone! Will 2021 Be Better for Gold? - 20th Jan 21
Trump and Coronavirus Pandemic Final US Catastrophe 2021 - 19th Jan 21
How To Find Market Momentum Trades for Explosive Gains - 19th Jan 21
Cryptos: 5 Simple Strategies to Catch the Next Opportunity - 19th Jan 21
Who Will NEXT Be Removed from the Internet? - 19th Jan 21
This Small Company Could Revolutionize The Trillion-Dollar Drug Sector - 19th Jan 21
Gold/SPX Ratio and the Gold Stock Case - 18th Jan 21
More Stock Market Speculative Signs, Energy Rebound, Commodities Breakout - 18th Jan 21
Higher Yields Hit Gold Price, But for How Long? - 18th Jan 21
Some Basic Facts About Forex Trading - 18th Jan 21
Custom Build PC 2021 - Ryzen 5950x, RTX 3080, 64gb DDR4 Specs - Scan Computers 3SX Order Day 11 - 17th Jan 21
UK Car MOT Covid-19 Lockdown Extension 2021 - 17th Jan 21
Why Nvidia Is My “Slam Dunk” Stock Investment for the Decade - 16th Jan 21
Three Financial Markets Price Drivers in a Globalized World - 16th Jan 21
Sheffield Turns Coronavirus Tide, Covid-19 Infections Half Rest of England, implies Fast Pandemic Recovery - 16th Jan 21
Covid and Democrat Blue Wave Beats Gold - 15th Jan 21
On Regime Change, Reputations, the Markets, and Gold and Silver - 15th Jan 21
US Coronavirus Pandemic Final Catastrophe 2021 - 15th Jan 21
The World’s Next Great Onshore Oil Discovery Could Be Here - 15th Jan 21
UK Coronavirus Final Pandemic Catastrophe 2021 - 14th Jan 21
Here's Why Blind Contrarianism Investing Failed in 2020 - 14th Jan 21
US Yield Curve Relentlessly Steepens, Whilst Gold Price Builds a Handle - 14th Jan 21
NEW UK MOT Extensions or has my Car Plate Been Cloned? - 14th Jan 21
How to Save Money While Decorating Your First House - 14th Jan 21
Car Number Plate Cloned Detective Work - PY16 JXV - 14th Jan 21
Big Oil Missed This, Now It Could Be Worth Billions - 14th Jan 21
Are you a Forex trader who needs a bank account? We have the solution! - 14th Jan 21
Finetero Review – Accurate and Efficient Stock Trading Services? - 14th Jan 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Buyers "On the Sidelines" Playing "Wait and See" Ahead of FOMC Announcement

Commodities / Gold and Silver 2012 Mar 13, 2012 - 09:37 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleSPOT MARKET gold prices drifted as low as $1694 per ounce Tuesday morning in London – 1.3% down on the week so far – while stocks and commodities rose slightly and US Treasuries dipped ahead of today's US Federal Reserve interest rate decision.

Silver prices fell to $33.43 per ounce – 2.5% down on last week's close – before, like gold, recovering some ground before lunchtime.


"There's not much going on, especially on the physical side," Dick Poon, Hong Kong-based precious metals manager at refiner Heraeus, said Tuesday morning.

"Everybody is staying on the sidelines."

"On and off, we are still seeing some buying, but it's not much," one Singapore dealer tells Reuters news agency.

"It's all about wait-and-see."

In Washington later today the Federal Open Market Committee is due to announce its latest monetary policy decision. The Federal Reserve has held interest rates at 0.25% since December 2008. Since then it has also launched two rounds of so-called quantitative easing, as well as Operation Twist last September, which runs until June this year.

"If there are no announced changes to the Fed program [today], then the Fed statement is unlikely to have any obvious implications for the US Dollar,” says James Steel, chief commodities analyst at HSBC in New York.

"This would also mean that the FOMC meeting is likely to have little effect on gold."

"Gold prices could be supported if we see some fresh easing talk from the US Fed," says Natalie Robertson, commodity research strategist at investment bank ANZ in Melbourne.

"But at the moment the market does not appear to be pricing in that outcome."

"QE3 [a third round of quantitative easing] is not a guarantee," adds says Michael Hanson, US economist at Bank of America Merrill Lynch.

"We would expect the Fed to ease further only if growth drops below trend, inflation undershoots their target and possibly the equity market sells off."

"I don't think they're convinced they won't need to add additional stimulus," counters Carl Riccadonna, New York-based senior US economist at Deutsche Bank.

"But the tone of data in last three months seems to have been surprising the Fed to the upside."

Monthly nonfarm payroll data released last Friday show that the US economy added 227,000 nonagricultural private sector jobs in February, slightly above analysts' consensus expectations.

The unemployment rate meantime held at 8.3%, having fallen from over 9% last year. The latest US consumer price inflation data are due to be published this Friday.

Earlier on Tuesday, the Bank of Japan left its main policy rate on hold at 0.1%. Like the Fed funds rate, the BoJ's main policy rate has not changed since December 2008.

Here in Europe, Spain agreed to additional budget cuts at Monday's meeting of Eurozone finance ministers, lowering its deficit target as a percentage of GDP this year by half a percentage point.

Earlier this month, Spain said it would not comply with the European Union's 2012 target of 4.4% of GDP. Instead, in what is called a "sovereign decision", Spain announced a target of 5.8%.

Eurozone finance minister chairman Jean-Claude Juncker last night described that target as "dead".
Spain has agreed to target a deficit-to-GDP ratio of 3% in 2013.

"That is the main figure that should be kept in mind," said Juncker on Monday.

Spain's 2011 target, agreed by its previous administration, was 6%. The actual figure achieved was 8.5%, the Wall Street Journal reports.

The German government meantime only managed to implement 42% of its planned spending cuts last year, German newspaper Der Spiegel reports.

The ongoing investigation into alleged "manipulation" of the benchmark Libor exchange rate – which acts as a measure of the rate at which banks lend to each other – could lead to a change in the method of calculation, news agency Bloomberg reports Tuesday.

At present, bank employees are asked to report their estimates of what it would cost to borrow in the interbank market, rather than reporting rates from actual transactions. The US Justice Department has begun a criminal investigation into whether banks have underreported the rates they have been charged in order to appear healthier and thus hide any financial difficulties. Enforcement agencies in Europe, Canada and Japan have also launched investigations.

"Proved manipulation of index rates could expose banks to a legal and regulatory bonanza," the Financial Times writes, "from big fines to class action lawsuits, several of which have already been filed."

Libor, referenced in many standard financial contracts, is used as the benchmark rate for $360 trillion of securities, Bloomberg reports.

Barclays, Citigroup and UBS have all voluntarily given information to regulators about possible abuse of the Libor setting process. Employees at several other institutions have been "fired, suspended or placed on administrative leave", the FT reports. These banks include Deutsche Bank, HSBC, interdealer brokers Icap, JPMorgan Chase, Brokers RP Martin and Royal Bank of Scotland.

RBS is facing potential legal action meantime from shareholders who allege that the information in its rights issue prospectus, published in 2008 just weeks before the UK government bailed out the bank, was misleading.

RBS is also among a group of banks the New York Times reports is offering to buy claims from customers of MF Global for up to 91 cents on the Dollar. MF Global collapsed late last year, resulting in losses for some investors who were using the brokerage to buy gold via futures contracts.

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 2012

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