Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold "Testing $1550" as Stocks Plunge, German Bund Yields Vanish, Investors Flee Risk for Cash

Commodities / Gold and Silver 2012 May 23, 2012 - 09:40 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleThe WHOLESALE gold price bounced from a 4-session low at $1552 per ounce Wednesday morning in London, rallying with the Euro currency as world stock markets slumped.

The Athens stock market hit a fresh 22-year low, and Wall Street futures pointed 0.7% down, while US Treasuries rose sharply together with Japanese, German and UK bonds.


The Brazilian Real continued to weaken, hitting new 3-year lows on the forex market despite the Banco Central do Brasil selling some $2.8 billion in US Dollars via currency swaps over the last 3 trading days in a bid to stem the slide.

As recently as March, Brazil's government accused the United States of under-pricing the Dollar, cutting its own interest rates to try and devalue the Real in what ministers repeatedly called a "currency war" threatening the country's exports and attracting inflows of "hot money" to its strong natural resources sector.

Commodity prices today fell to a 5-month low on Standard & Poor's GSCI index.

Silver prices held over $1 below last week's finish, trading at $27.75 per ounce as the start of New York dealing approached.

"There was no real dip buying" overnight as the gold price bottomed, says one wholesale dealer in a note, although Hong Kong premiums over benchmark London prices held firm between $1.00-1.50 per ounce Wednesday.

"Gold is acting more as a risky asset," Robin Bhar of Société Générale is quoted by Thomson Reuters, "and everything is tumbling this morning ahead of the informal [Eurozone] finance ministers meeting [tonight], where nothing good is really expected."

"Gold has pulled back to test support at $1550-1500," says a note from Bank of America-Merrill Lynch technical analysts Mary Ann Bartels and Stephen Suttmeier, quoted by BusinessWeek.

"This support is holding, which sets up gold for a rally.

"Our longer-term view remains that gold is in a secular bull market with upside potential to $2000-2300 to as high as $3000 in coming years."

In Athens on Wednesday, former prime minister Lukas Papademos sought to "clarify" comments quoted by Dow Jones Newswires yesterday in which he said "It cannot be excluded preparations are being made to contain the potential consequences of a Greek Euro exit."

Prime minister Fredrik Reinfeldt of Sweden – like the UK, a European Union member still outside the Eurozone currency bloc – today repeated last week's comments from finance minister Anders Borg that the Greek situation was "very close to the end of the road."

Germany meantime sold Germany sold €4.5bn of two-year government bonds Wednesday morning at an all-time record-low of 0.07% in annual yield, dispensing with a formal interest coupon altogether.

"There is no way of introducing [pan-Eurozone government bonds] under the current treaties," said an un-named official in Berlin today, rejecting an idea widely mooted as a way of using Germany's strong credit rating to finance weaker states' deficits.

"Indeed, there is an explicit ban on them. That's a firm conviction which will not change in June."

Citigroup analysts said in a new report that the odds of a Eurozone break-up are now at 19% according to financial markets.

"In the event that the implied probability of a break-up increases further," Citi believes, "then [2-year German bond] yields could fall to minus 0.75%" as more capital pours into 'safe haven' debt, driving the price higher.

Thomson Reuters' latest poll of portfolio managers says they're now holding more cash than any time since the 8-year high hit in January.

"Our Sentiment Indicator dropped to almost zero one week ago, and has failed to pick up," says Société Générale's cross-asset quant analysis research.

"The extent and consistency of this move suggest taking this signal seriously, and staying away from long risk positions for the moment."

Tuesday saw the $68 billion SPDR Gold Trust ETF shed 17.5 tonnes from the gold backing its shares, the sharpest 1-day redemption since August.

"Event risk is stacked towards the tail end of the week," says a note from Japanese conglomerate Mitsui.

"After new home sales [today], on Thursday we have a slew of European PMI's, US goods orders and jobless claims plus Comex option expiry, where a considerable chunk of open interest is situated at $1600."

Data from Thomson Reuters showed a marked rise in put options, with speculators looking to sell gold futures at $1550 and $1575 per ounce in particular.

Meantime in India, where the government in New Delhi has acted to curb gold imports in 2012, "Scrap gold sales have picked up by 30% in the span of just one week as gold prices in local terms surged," says bullion market-maker HSBC.

If consumer selling continues, "India may require lower gold imports," says the bank. But "weak bullion import demand may present headwinds to any near-term gold rally."

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