Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
This Is Your Last Chance to Dump Netflix Stock - 19th July 19
Gold and US Stock Mid Term Election and Decade Cycles - 19th July 19
Precious Metals Big Picture, as Silver Gets on its Horse - 19th July 19
This Technology Everyone Laughed Off Is Quietly Changing the World - 19th July 19
Green Tech Stocks To Watch - 19th July 19
Double Top In Transportation and Metals Breakout Are Key Stock Market Topping Signals - 18th July 19
AI Machine Learning PC Custom Build Specs for £2,500 - Scan Computers 3SX - 18th July 19
The Best “Pick-and-Shovel” Play for the Online Grocery Boom - 18th July 19
Is the Stock Market Rally Floating on Thin Air? - 18th July 19
Biotech Stocks With Near Term Catalysts - 18th July 19
SPX Consolidating, GBP and CAD Could be in Focus - 18th July 19
UK House Building and Population Growth Analysis - 17th July 19
Financial Crisis Stocks Bear Market Is Scary Close - 17th July 19
Want to See What's Next for the US Economy? Try This. - 17th July 19
What to do if You Blow the Trading Account - 17th July 19
Bitcoin Is Far Too Risky for Most Investors - 17th July 19
Core Inflation Rises but Fed Is Going to Cut Rates. Will Gold Gain? - 17th July 19
Boost your Trading Results - FREE eBook - 17th July 19
This Needs To Happen Before Silver Really Takes Off - 17th July 19
NASDAQ Should Reach 8031 Before Topping - 17th July 19
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Gold Physical Demand Rises as Consumer Adjust

Commodities / Gold and Silver 2012 May 22, 2012 - 06:55 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleWHOLESALE PRICES to buy gold fell further from $1600 an ounce in London on Tuesday morning, finding a floor at $1575 as European stock markets rose for the second day running after falling for two weeks in succession.

Commodity prices were mixed, but silver bullion also reversed an earlier fall, bouncing off $28.05 per ounce.


US crude oil slipped back below $93 per barrel after the international-government-backed OECD consultancy cut its forecasts for Asian GDP and global energy demand.

Credit ratings agency Fitch today cut Japan's status to "A+" with a negative outlook.

"With gold below $1600, we have seen increasing demand [to buy gold] from Asia," says today's commodities note from Barrow's colleagues at Standard Bank.

Comparing 2011's action around the same price point, "Clearly the physical gold market has adjusted to the higher gold price," writes Walter de Wet, "with rallies not being sold into as last year.

"However, while the physical market is providing support on price dips, the question remains: at what price will physical demand fall away?"

The price for Indian households wanting to buy gold rose 1% today in Mumbai according to Sify.com, coming within 2% of the all-time record at Rs 29,690 per 10 grams hit at the start of this month as the Rupee fell to record lows on the currency markets.

For US investors looking to buy gold, "We believe that the significant 1532/1522 support area will be retested in the months to come and that it will give way when this occurs," says Commerzbank's latest technical analysis.

"A move back below 1568 keeps the bears alive looking for another leg lower," reckons Russell Browne at Scotia Mocatta.

"We continue to eye the topside resistance between 1625-35 as being fairly strong technically," says Swiss refiner and finance group MKS's Australian office.

"Traders need to remain cautious of negative euro headlines, which could easily propel the yellow metal lower."

After Greek and then Spanish banks were seen suffering a run by depositors, new data from Italy yesterday showed foreign investors withdrawing their money from Rome's debt.

"This largely confirms what we have seen from the Target 2 [cross-border banking liability] data," says Alan Ruskin at Deutsche Bank – "that €268bn in LTRO borrowings (at the end of April) are making up for the net long-term capital outflow as Italian debt increasingly becomes domestically held."

Both Italian and Spanish government bond prices ticked higher on Tuesday, nudging yields down to 5.6% and 6.0% respectively on 10-year debt.

US, Japanese and German bonds all slipped, as did UK government gilts despite consumer price inflation slowing to 3.0% per year in April, according to official data.

Right at the upper limit of the central bank's official target range, that was the slowest pace of CPI inflation since Dec. 2009.

The price to buy gold in Pounds reversed an early dip below £1000 per ounce – a level first reached as the Eurozone and US debt crises intensified in July 2011.

"Further monetary easing is required," says the International Monetary Fund's latest review of the UK economy, "provided via further quantitative easing (QE) and possibly cutting the policy rate."

UK interest rates have now been at a record low of 0.50% for 38 months running. The last such run of static rates was the 2.0% imposed between 1931 and 1954.

"If there's one area where the Bank of England has undoubtedly failed, it is with respect to its inflation forecasts and hence its inflation target," writes Steve Barrow, chief currency strategist at Standard Bank in London, noting that both the Bank of England and the European Central Bank are conducting internal reports into their handling of the financial crisis starting 5 years ago.

The ECB's report is due in June, with the UK report set for October.

"That policy options are limited may in fact be the main finding of these reports," reckons Barrow.

"The use of inflation targeting is unlikely to change...We doubt that the ECB will jettison [extraordinary measures] like SMP and LTROs – even if its report questions their usefulness."

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

6 Critical Money Making Rules