Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Cara Therapeutics - CARA - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 28th Sep 21
US Antitrust Against the Big Tech - 28th Sep 21
Gold Medium-Term Downtrend: Gold Miners in the Lead - 28th Sep 21
Reflation vs. Economic Stagflation - 28th Sep 21
Corsair iCue H150i RGB Pro XT FULL Review! Software, Failed Firmware Update Unbricking Fix! - 28th Sep 21
Blueprint Medicines - BPMC - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 27th Sep 21
China, India: Richer or Poorer? The Asian Pacific Financial Markets Forecast - 27th Sep 21
Stock Market Bubble Valuations Dot Com 2000 vs 2021 - 27th Sep 21
Gold When the Tight Economic Rope Slackens - 27th Sep 21
The U.S. Government Plans to Default on Debt the Dishonest Way - 27th Sep 21
Stock Market Retest of the High? - 27th Sep 21
Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
Will Biden’s Neo-Populist Economic Doctrine Support Gold? - 25th Sep 21
Markets Deflationary Winds Howling - 25th Sep 21
Crude Oil Price Piercing the Sky: Where Will We See the Black Gold by Xmas? - 25th Sep 21
Cryptocurrency policy choices and consequences - 25th Sep 21
The Next Emma Raducanu UK Tennis Star Pleasing the Crowds at Millhouses Park Sheffield - 25th Sep 21
Stock Market Rescued by the Fed Again? - 24th Sep 21
Are Amazon Best Cheap Memory Foam Mattresses Any good? Bedzonline £69 4ft Small Double ECO Example - 24th Sep 21
Evergrande not a Minsky Moment - 24th Sep 21
UK Energy Firms Scamming Customers Out of Their Best Fixed Rate Gas Tariffs - 23rd Sep 21
Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Should School Children be Jabbed with Pfizer Covid-19 Vaccine To Foster Herd Immunity? - UK - 23rd Sep 21
HOW TO SAVE MONEY ON CAR INSURANCE - 23rd Sep 21
Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
Trading Crude Oil ETFs in Foreign Currencies: What to Focus On - 22nd Sep 21
URGENT - Crypto-trader event - 'Bitcoin... back to $65,000?' - 22nd Sep 21
Stock Market Time to Buy the Dip? - 22nd Sep 21
US Dollar Bears Are Fresh Out of Honey Pots - 22nd Sep 21
MetaTrader 5 Features Every Trader Should Know - 22nd Sep 21
Evergrande China's Lehman's Moment, Tip of the Ice Berg in Financial Crisis 2.0 - 21st Sep 21
The Fed Is Playing The Biggest Game Of Chicken In History - 21st Sep 21
Focus on Stock Market Short-term Cycle - 21st Sep 21
Lands End Cornwall In VR360 - UK Holidays, Staycations - 21st Sep 21
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Jump in Gold as France Refutes EU Pact

Commodities / Gold and Silver 2012 May 17, 2012 - 07:30 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleTHE WHOLESALE MARKET gold price jumped at the start of New York trade on Thursday, cutting the week's previous 3.3% dive to 5-month lows in half as the Euro fell and Eurozone stock markets slumped once again.

The gold price touched $1558 per ounce before easing $3 lower. Silver did not follow, failing to break this morning's earlier Dollar high at $27.86 per ounce.


German Bund yields fell to fresh record lows, but Spain had to offer investors in new 3-year debt an annual yield of 4.37%, up from the 2.89% charged at the last comparable sale in April.

The European Central Bank confirmed it has ceased working with some Greek banks because it believes them to be insolvent, while Portugal's Diario Economico newspaper claimed a joint visit by the ECB, IMF and European Union to assess Lisbon's €78 billion bail-out will also discuss contigency plans should Greece quit the single currency.

Greece's interim cabinet of academics, lawyers and diplomats was today sworn in, pending fresh elections in four weeks' time.

The gold price in Euros jumped 1.9% from Wednesday's low, trading above last week's closing level.

France's new finance minister, Pierre Moscovici, today said the socialist government of Françoise Hollande will not ratify the European Union's fiscal pact agreed by 25 out of 27 member states last December.

Gold's Relative Strength Index – a technical measure of the speed and size of price change – "is approaching extreme oversold territory," says the latest technical note from bullion bank Scotia Mocatta, "but there are no warning signs yet of a change in trend."

"Gold is definitely in oversold territory, and there should be some good buying interest around the low in December," Bloomberg quotes Dong Zhuying at Haitong Futures Co.

"Paring its losses near key support at $1525," says Ed Meir at Intl FC Stone, the gold price likely saw "a decent amount of short-covering" by bearish traders on Wednesday, if not "fresh buying" after it held that level.

European stock markets fell again Thursday, losing value for the 8th session out of 11 in May so far and taking Madrid's Ibex 35 index down to a fresh 9-year low, some 3.4% down on the day.

Crude oil slipped to new 6-month lows after data on Wednesday showed US energy stockpiles more glutted than any time since 1990.

Commeting on gold's 20% drop from last summr's all-time highs, "I believe gold will become a haven again, especially if you see fragmentation in the Eurozone," said the World Gold Council's Marcus Grubb to Bloomberg TV this morning, launching market-development group's latest Gold Demand Trends report.

"Because then you're going to get currency depreciation, you may get inflation in some countries, deflation in others...and you'll see gold's attributes as a hedge come to the fore."

In the first quarter of 2012, global gold investment demand rose 13% by weight and 38% by Dollar value from the Jan-March period last year, says the report. In the jewelry sector, "Gold is underpined now by two large markets and China is playing catch up to India," says Grubb, also speaking to Reuters this morning.

"Per capita gramme consumption rates are rising in China."

Acknowledged as the leading authority on global demand and supply analysis, the World Gold Council says that China's gold demand again beat India in the first quarter of 2012.

"You're going to see China become the largest gold market overall by the end of this year for the first time," Grubb believes. "It's worth remembering that growth rates are still in the 7-8% range. So people are getting wealthier, and they will continue to buy gold strongly we believe."

Beijing last month halved the rate of import rates on gold jewelry. So far in 2012, India has quadrupled its gold bullion import tax.

After last weekend's cut by China's central bank to the reserve ratio requirement – easing credit by enabling commercial banks to lend out more of the cash deposits they take – the State Council of China said Wednesday it will spend CNY36.3 billion ($5.7bn) over the next 12 months subsidizing household purchases of large electrical items, fuel-efficient cars and energy-saving lightbulbs.

Despite the cut in the reserve ratio requirement, however, lending by China's four largest banks has "been flat so far this month" says the Shanghai Securities Journal.

Both the central and commercial banks were net sellers of foreign currency in April, the People's Bank of China said this week, indicating an outflow of capital.

China's 12-month trade surplus has halved from its peak above $300 billion of early 2009, according to data cited by the Financial Times.

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 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