Best of the Week
Most Popular
1.BrExit House Prices Crash, Flat or Rally? UK Housing Market Affordability Crisis - Nadeem_Walayat
2.Stocks Bull Market Climbs Wall of Worry, Bubble? When Will it End? - Nadeem_Walayat
3.Gold Price Is Now On Its Way To All-Time Highs - Hubert_Moolman
4.Deutche Bank Stock Price Crash - The EU Has Problems Far Beyond the Brexit - Harry_Dent
5.UK interest Rate PANIC CUT! As Banks Prepare to Steal Customer Deposits - Nadeem_Walayat
6.Gold and Silver Bull Phase 1 : Final Impulse Dead Ahead - Plunger
7.Central Bankers Fighting An Unprecedented Global Economic Slowdown - Gordon_T_Long
8.Putin Hacking Hillary for Trump, Russia's Manchurian Candidate? - Nadeem_Walayat
9.Stock Market Insiders Are Secretly Selling, Cycle Top Next Month - Chris_Vermeulen
10.Gold Sector - Is it time to Back up the Truck? – Mortgage the Farm? - Peter_Degraaf
Free Silver
Last 7 days
Gold’s strong summer may be harbinger of things to come - 31st Aug 16
A Two-Bar Pattern that Points to Trade Setups - 31st Aug 16
GDX Gold Stocks Update…The First Consolidation Pattern - 31st Aug 16
Unknown Voluntary Servitude and the Creature from Jekyll Island - 31st Aug 16
It’s Official: The Global Real Estate Bubble is Finally Bursting! - 30th Aug 16
7 Things to Remember When Inflation Returns - 30th Aug 16
The Pro Hillary Supporter Challenge - 30th Aug 16
Semiconductor Stocks Sector, Updated - 30th Aug 16
Stagflation to Force People into Gold - 30th Aug 16
Late-August Calm a Breeding Ground for Gold Bullion Bank Shenanigans - 30th Aug 16
Stock Market Long View - 30th Aug 16
Fundamentals for Uranium look great; is the Uranium Market ready to soar? - 29th Aug 16
3 Ways to Profit from the Stressed-Out American Consumer - 29th Aug 16
Have The Markets Become Too Big to Fail? - 29th Aug 16
Pakistan Booming House Prices Housing Market Mania Kabza Mafia Warning! - 29th Aug 16
Post Yellen = Market Confusion - 28th Aug 16
Theresa May Instructs Police, NHS Gp's, Public Sector To Stop Racial Discrimination in Service Delivery - 28th Aug 16
Ignore Yellen and Buy the Dip in Precious Metals - 27th Aug 16
SPX Downtrend Should be Underway - 27th Aug 16
Unraveling the Secular Economic Stagnation Story - 27th Aug 16
The Precious Metals Sector and the Fed. . . - 27th Aug 16
Stock Market - All Is Calm, All Is Not Right - 27th Aug 16
Gold Junior Stocks Q2 2016 Fundamentals - 26th Aug 16
Buy Gold’s August Dip? Gold’s Monthly Sweet Spot In September - 26th Aug 16
The IMF’s Internal Audit Reveals Its Incompetence and Massive Rule Breaking - 26th Aug 16
Commodities Are the Best Bargain Now—Here’s What to Buy - 26th Aug 16
Why I Left Canada and Became A Citizen of the Dominican Republic - 26th Aug 16
The GLD vs GOLD - 26th Aug 16
Can Stocks Survive Without Stimulus? - 25th Aug 16
Why Putin Might Be on His Way Out - 25th Aug 16
Bond Guru Gary Shilling - The Bond Market Rally of a Lifetime - 25th Aug 16
A Zombie Financial System, Black Swans and a Gold Share Correction - 25th Aug 16
OPEC’s Output Freeze: What Has Changed Since Doha? - 25th Aug 16
Merkel Prepares For a Deliberate Crisis While White House Plans For a Disastrous Succession - 24th Aug 16
Suspicious Reversal in Gold Price - 23rd Aug 16
If Trump Can’t Pull Off a Victory, Expect a Civil War - 23rd Aug 16
Ceding ICANN and Internet Control to Globalists - 23rd Aug 16
How to Spot an Oversold Stock Market - 23rd Aug 16
Gerald Celente Sees Worst Market Crash, New Military Conflict, Gold Spike to $2,000/oz - 23rd Aug 16
EU Olympics Medals Table Propaganda Includes BrExit Britain - 22nd Aug 16
BrExit Win's Britain Olympics Success Freedom Dividend, Economy Next - 22nd Aug 16
Stock Market Top Forming, but Slowly - 22nd Aug 16
(Really) Alternative Banking Systems - 22nd Aug 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

US Economy - 3 Secret Charts

"Euro Crisis Back" as Spanish Yields Spark "Renewed Market Panic"

Commodities / Gold and Silver 2012 Apr 16, 2012 - 08:48 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleWHOLESALE gold bullion prices traded just below $1650 an ounce for most of Monday morning's London session – well within the past month's range – as European stock markets edged higher while commodities fell.

The Euro meantime sank to a two-month low against the Dollar, as investors turned their attention to rising Spanish government borrowing costs.


On China's Shanghai Gold Exchange, contracts equivalent to around 7.3 tonnes of gold bullion changed hands in Monday's trading.

"Current levels are by no means excessively weak," says a note from investment bank UBS, "but the fact that average daily turnover sits at just about half of the 18 tonne all-time high seen last year is in itself confirmation that there is less gold fever in China this year versus last."

Authorities in Beijing meantime have widened the Yuan's trading band against the Dollar from a 0.5% maximum daily move to 1%.

Silver bullion fells to $31.22 per ounce – close to four month lows – before recovering some ground in Monday morning's London trading.

"The key downside risks for silver," says a note from Morgan Stanley, "are that the weaker economic outlook in 2012 and 2013 will cut fabrication demand, but not enough to take prices back to levels that would deter anticipated strong mine production growth and a rising surplus."

Sovereign debt stresses in the Eurozone are expected to dominate this week's International Monetary Fund meeting, where European officials are expected to ask the IMF to expand its lending capacity to combat a fresh potential crisis, newswire Bloomberg reports.

At February's G20 meeting, European leaders were told Europe needed to do more before non-European nations would consider a bigger IMF contribution. There has since been agreement to increase the size of the Eurozone's 'firewall' to €800 billion, although only €500 billion will be available for fresh rescue programs.

"I think Europe has done its part," European Central Bank board member Joerg Asmussen told the Wall Street Journal over the weekend.

"Now you would expect other IMF shareholders to come forward and make their contributions to increasing IMF resources."

Benchmark yields on 10-Year Spanish government bonds rose above 6% Monday morning – a level breached last week for the first time since December.

"After three months that were calmer than expected, the Euro crisis is back," says Holger Schmieding, London-based chief economist at Berenberg Bank. 

"The speed of the recent surge in yields has elements of a renewed market panic."

Spain is due to auction 2-Year and 10-Year bonds this Thursday.

The ECB "should step up purchases of [government] bonds" said Jaime Garcia-Legaz, a deputy minister in Spain's Economics Ministry, speaking last week.

The ECB began buying distressed government debt on the secondary market in 2010 under its Securities Markets Programme. It reactivated the SMP last August when Spanish and Italian yields spiked.

Spanish 10-Year bond yields hit 6.7% last November – while Italian 10-Year yields breached 7%. 
Here in the UK, economic growth will be only 0.4% this year – half the official projected rate used by the government – according to a report published Monday by the Ernst & Young ITEM Club, a forecasting arm of the accountancy firm.

The report cites "corporate cash piles" worth an estimated 50% of GDP as one reason the economy is expected to "stall" in 2012.

"Business investment has picked up nicely in the US but UK companies remain extremely risk averse," says Peter Spencer, chief economic advisor to the ITEM Club.

"[This] is sapping strength from the economy...until these companies stop stashing the cash and start increasing levels of investment and dividends, the economy will remain on the critical list."

Over in New York, the so-called speculative net long position of gold futures and options traders on the Comex – measured as the difference between bullish and bearish contracts – fell for the second week running in the week ended last Tuesday.

The spec net long dropped 3.9%, Commodity Futures Trading Commission data published late Friday show.

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.


© 2005-2016 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

Catching a Falling Financial Knife