Best of the Week
Most Popular
1.U.S. Housing Bull Market Over? House Prices Trend Forecast Current State - Nadeem_Walayat
2.The Coming U.S. Economic Collapse Will Trigger a Revolution - Harry_Dent
3. Stock Market Crash a Historical Pattern? - Wim_Grommen
4.Global Panic - U.S. Federal Government Stockpiling Ammo – Here’s What We’re Going to Do - Shah Gilani
5.AI, Robotics, and the Future of Jobs - Aaron Smith
6.This is Your Economic Recovery With and Without Drugs - James_Quinn
7.Gold and Silver Price Getting Set To Explode Higher - Austin_Galt
8.The Something for Nothing Society - Lifecycle of Bureaucracy - Ty_Andros
9.Another Interesting Stock Market Juncture - Tony_Caldaro
10.Inflation vs the Deflationary Straw Man - Gary_Tanashian
Last 5 days
US House Prices Bull Market Over? Trend Forecast Video - 29th Aug 14
The Fed Meeting at Jackson Hole Exposed Yellen’s Greatest Weakness - 29th Aug 14
AAPL Apple Stock About To Get sMACked - 29th Aug 14
A History of Unlimited Money: Learn From It or Repeat Its Mistakes - 29th Aug 14
How You Can Play to Win When Market Makers Are Calling the Shots - 28th Aug 14
EU Gas Supply Is In Real And Imminent Danger - 28th Aug 14
Central Banks at the Root of Evil - 28th Aug 14
European Bond Market: Bubble of all Bubbles! - 28th Aug 14
Employers Aren’t Just Whining: The “Skills Gap” Is Real - 28th Aug 14
The ISIS Menace - Just What We Need, Another War - 27th Aug 14
The Risky Business of Methane-Rich “Fire Ice” - 27th Aug 14
CFR Recommends Policy Shift that is Very Bullish for Gold - 27th Aug 14
Ukraine Standoff Signals Global Power Shift - 27th Aug 14
Stock Market Panic Decline Begins - 27th Aug 14
The Monopoly of the Government Education Cartel - 27th Aug 14
How to Invest in Silver Today for Double-Digit Gains - 27th Aug 14
The Big Solar Energy Breakthrough We've Been Waiting For - 27th Aug 14
U.S. Empire’s Bumpy Ride - 27th Aug 14
Gold Market and the Interest Rate Trap - 27th Aug 14
Stock Market Staring Into the Great Abyss - 27th Aug 14
A Look at the Coming 30-year Inflation Cycle - 27th Aug 14
Forex Trading - Will USD/CHF Rally Above 0.9200? - 27th Aug 14
Europe’s Depressing Economy Dog Days of Summer - 27th Aug 14
How The Coming Silver Price Bubble Will Develop - 26th Aug 14
A Nation of Shopkeepers - Supply-Side (Voodoo) Economics? - 26th Aug 14
Stock Market Bear Tracks Abound In Wall Street - 26th Aug 14
65,000 U.S. Marines Hold up a Mirror to the Economy - 26th Aug 14
Bitcoin Market Provides Clues for Investors - 26th Aug 14
The Key to Trading Success - 26th Aug 14
Will The US Succeed in Breaking Russia to Maintain Dollar Hegemony?... - 26th Aug 14
Even Mainstream Academia Worried about Massive Bubbles in Markets - 26th Aug 14
Iraq and Syria Follow Lebanon's Precedent - 26th Aug 14
Colonization by Bankruptcy: The High-stakes Chess Match for Argentina - 26th Aug 14
Dow Stock Index On The Cusp - 26th Aug 14
Prohibition Laws and Agency Regulations - 26th Aug 14
Will Canadian Regulators be Able to Avoid Final Fatal TSX Venture Exchange (TSX-V) Crash? - 25th Aug 14
HUI Gold Mining Stocks Elliott Wave Projection - 25th Aug 14
Stock Market Uncertainty Resolved With New High - 25th Aug 14
Go Forth Multiply And Replenish The Earth - 25th Aug 14
Dollar Dumping: When Actions Speak Loudest - 25th Aug 14
A Plethora of Currency, Stocks and Precious Metals Chartology - 25th Aug 14
Why Isn’t Fed Monetary Pumping Helping the U.S. Economy? - 25th Aug 14
Myths About Money and Inflation - 25th Aug 14
The Fed Will Raise U.S. Interest Rates in March 2015 - 25th Aug 14
Gold Price Manipulation Still Alive - 25th Aug 14
The Ebola Outbreak: U.S. Sponsored Bioterror? - 24th Aug 14
Instigating War in Europe - Understanding Ukraine in 15 Minutes - 24th Aug 14
LNG Catalysts About to Hand You the investment Opportunity of the Decade - 24th Aug 14
Another Interesting Stock Market Juncture - 24th Aug 14
The West Set Up the ISIS Endgame - 24th Aug 14
Gold And Silver Low Prices Are NOT The Reason To Own Precious Metals - 24th Aug 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Biggest lie in Stock Market History Revealed

"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.


© 2005-2014 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

Free Report - Financial Markets 2014