Best of the Week
Most Popular
1.Gold Price Crash Through Key Support, Crude Oil in Freefall - Clive_Maund
2.Marc Faber Warns Japan's Bond-Buying Program is a Ponzi Scheme - Bloomberg
3.Silver Price and Powerful Forces - DeviantInvestor
4.Stocks Bear Market Catastrophe as Stocks Flash Crash to New All Time Highs - Nadeem_Walayat
5.Marc Faber Warns Not to Hold Any Gold in the U.S. - GoldCore
6.U.S. Housing Market San Francisco at Critical Mass - Harry_Dent
7.Global Scramble For Silver - Coins “Hard To Get,” “Premiums Likely To Jump” - GoldCore
8.Major World Stock Market Indices Analysis: SPY, QQQ, DAX, FTSE, CAC, HSI - Michael_Noonan
9.Japan's kaput?! - Axel_Merk
10.Tesco Empire Strikes Back, £5 off £40 Discount Voucher Spend Explained, Exclusions Warning! - Nadeem_Walayat
Last 5 days
Two Biotech Stocks Set to Double on One Powerful Catalyst - 21st Nov 14
Swiss Gold Poll Likely Tighter Than Polls Suggest - 21st Nov 14
Gold's Volatility and Other Things to Watch - 21st Nov 14
Australia Stock Market and AUD Dollar Analysis (ASX200 and AUDUSD) - 21st Nov 14
New Algae Research May Have Uncovered an “Energy Forest” Under the Sea - 21st Nov 14
The Cultural and Political Consequences of Fiat Money - 20th Nov 14
United States Social Crisis - No One Told You When to Run, You Missed the Starting Gun! - 20th Nov 14
Euro-Zone Tooth Fairy Economics, Spain Needs to leave the Euro - 20th Nov 14
Ebola Threat Remains a Risk - New Deaths in Nebraska and New York - 20th Nov 14
Stock Market and the Jaws of Life or Death? - 20th Nov 14
Putin’s World: Why Russia’s Showdown with the West Will Worsen - 20th Nov 14
Making Money While The World Burns - 20th Nov 14
Why This "Quiet Zone" Is Now Tech Stocks Biggest Profit Sector - 20th Nov 14
My Favorite Stock McDonalds Just Got Kicked Off My “Buy” List - 19th Nov 14
European Economies in Perpetual State of Shock, What's Scarier Than Deflation? - 19th Nov 14
Breakfast with a Lord of War and Nuclear Weapons - 19th Nov 14
The U.S. Economy’s Ebb and Flow - 19th Nov 14
What You Need to Know Before Investing in Alibaba - 19th Nov 14
Forget About Crude Oil Price Testing 2009 Low - 19th Nov 14
What Blows Up First? Part 5: Shale Oil Junk Bonds - 19th Nov 14
Bitcoin Price Did We Just See an Important Slump? - 18th Nov 14
How to Profit From Oversold Crude Oil Price - 18th Nov 14
Stock Valuations Outrunning Profits Growth - And the Band Played On - 18th Nov 14
ECB Buy Gold Bullion? Japan's Monetary Policy Dubbed "Ponzi Scheme" - 18th Nov 14
Gold, Silver, Crude and S&P Ending Wedge Patterns - 18th Nov 14
How High Could USD/JPY Go? - 18th Nov 14
On Obama and the Nature of Failed Presidencies - 18th Nov 14
Globalism Free Trade Immigration Connection - 18th Nov 14
An Epiphany From Hell - Buy Gold and Silver - 18th Nov 14
Too Difficult to Get a U.S. Home Loan - 18th Nov 14
Has the Gold Bear Trap Been Set - 18th Nov 14
Gold Price and Miners Soar on Huge Volume - 17th Nov 14
Cameron Says Second Global Economic Crash is Loomin, Japan in Recession - 17th Nov 14
How to Play the Stock Market 2014 Year-End Rally - 17th Nov 14
What The Fed Has Wrought, Who Needs Wage Earners Anyway? - 17th Nov 14
Stock Market Indexes Fluctuate Along Record Levels - Will Uptrend Continue? - 17th Nov 14
Stock Market Trend Deceleration Tends To Precede Corrections - 17th Nov 14
Stocks Bull Market Set to Continue After Consolidation - 17th Nov 14
The World Is Run By Fools, And We Let Them - 17th Nov 14
Gold Price Golden Bottom? - 17th Nov 14
Gold Dragons Grand Strategy - 16th Nov 14
Gold and Silver 2015 Trend Forecasts, Prices to Go BOOM - 16th Nov 14
Stocks Bull Market Grinds Bears into Dust, Is Santa Rally Sustainable? - 16th Nov 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Dramatic Stock Market Selloff

Gold and Silver Finally Decouple from Euro, Stocks and other Commodities

Commodities / Gold and Silver 2012 May 31, 2012 - 01:19 PM GMT

By: Adrian_Ash

Commodities

WHOLESALE BULLION gold prices rose Thursday lunchtime in London, extending yesterday's sharp jump and cutting this week's 2.5% drop by more than two thirds even as the Euro currency again slipped through $1.24 for the second day running.

Trading near $1564 per ounce, however, Dollar gold prices headed towards their fourth monthly drop in succession, losing some 5.3% in May.


Silver bullion neared the end of May more than 10% lower from end-April, despite rallying above $28 per ounce Wednesday afternoon in London when the Euro first slipped to those fresh two-year lows.

US crude oil was on track for a monthly drop of 16% says Bloomberg, its worst fall since December 2008.

The MSCI index of global stock markets has shed nearly 9% in May.

"Gold and to a lesser extent silver decoupled from the rest of the [commodities] group on Wednesday and started to head higher," says a US analyst.

"Finally gold is behaving 'normally' and is 'profiting' from the fears surrounding the Euro," agreess Commerzbank analyst Eugen Weinberg, "[resisting] the general downswing experienced by commodities and equities.

"Gold is proving to be good 'risk insurance' [but] we believe there may still be downside risks if the US Dollar continues to remain strong."

Standard Chartered also "see downside risks for the short term but remain long-term bulls," they said in a note.

May has "definitely seen a flight to the Dollar rather than gold," says Chinese brokerage CITIC Futures' chief investment strategist Wang Xiaoli, adding that "the crisis in Europe doesn't look like it will abate soon."

So-called "safe haven" US Treasury bonds rose sharply again on Thursday, driving 10-year yields down to new all-time lows beneath 1.60%, following weaker-than-expected US payroll data from the private ADP group.

Ten-year Spanish bond yields meantime held near 6%, the level which Portuguese yields reached just before its ECB, IMF and European Union bailout.

Speaking to the European Parliament Thursday morning, the 17-nation Eurozone's chief central banker Mario Draghi accused Spain and other member states of trying to deal with their domestic banking crises in "the worst possible way."

Spain last week announced a fresh €19 billion injection of state funds into the part-nationalized Bankia lender.

"There is a first assessment, then a second, a third, a fourth," said Draghi. "Everyone ends up doing the right thing, but at the highest cost."

Across in Ankara, the Turkish Central Bank today said it may "gradually" raise the percentage of required reserves which commercial banks can hold in physical Gold Bullion to 30%.

The news comes only 1 months after the limit was raised to 20%, and only 2 months after Turkish banks were first allowed to hold a portion of their required reserves in gold. (Read about Turkey's new gold policies here...)

The world's biggest trade credit insurer, Euler Hermes, meantime suspended cover for goods being shipped to Greece, saying that until there's "clarity" after 17 June's Greek election, it cannot be sure debts will be paid in the event of Athens quitting the Euro.

Over in Hong Kong today, London-based luxury jeweler Graff abandoned its $1 billion stock-market IPO scheduled for tomorrow, blaming "consistently declining stock markets."

India's Rajesh Exports – which forecast in Sept. 2009 that rising Gold Prices could dent Indian demand, only to see the world's #1 buyer grow its private consumption for the next two years running – today warned that Indian gold demand could fall hard in 2012 due to the weak Rupee.

In Dollar terms, "Gold Prices remain within a sideways consolidation," says Mumbai-based RiddiSiddhi Bullions, pointing to support at $1526 and resistance at $1600.

"We are neutral gold until it makes a larger directional move outside of those levels. The trend remains bearish."

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.


© 2005-2014 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