Best of the Week
Most Popular
1.Stocks Bear Market Apocalypse Imminent Crash Gets Nuked Again - Nadeem_Walayat
2.Gold And Silver – A Reality Check - Michael_Noonan
3.The Killer Ape, Human Evolution, Artificial Intelligence and Extinction End Game - Nadeem_Walayat
4.Stock Market S&P 500 Volatility-Based Price Probability Range - Richard_Shaw
5.A Stocks Bear Market Is Now More Likely Than Not - Richard_Shaw
6.Money Supply and the Fed’s Serious Inflation Risks - Zeal_LLC
7.More Selling for Stock Market, Gold? - Brad_Gudgeon
8.Gold, Silver Precious Metals: a Critical Week Ahead - Rambus_Chartology
9.Gold Price Change in Character - Gary_Savage
10.Advice for Biotech Investors: 'Hold Your Powder' 'til Winter - TLSReport
Last 5 days
Dr Copper Back from the Dead - Time to Buy or Blink - 8th Oct 15
Glencore Rout Blamed on Short Sellers Playing With CDS - 8th Oct 15
The Real Reason for the Refugee Crisis You Won’t Hear About in the Media - 8th Oct 15
US Stocks: The [Trend]Line Between Bull and Bear Market - 8th Oct 15
Bundesbank “Reassures” Re. Gold Bullion Reserves as Deutsche Bank Shocks With €6 Billion Loss Warning - 8th Oct 15
How Our Aversion To Change Leads Us Into Danger - 8th Oct 15
Moving Stem Cell Research Forward: Bernie Siegel of the Genetics Policy Institute - 8th Oct 15
Stock Market VERY IMPORTANT Turn Date - 7th Oct 15
The 5th Convergence…An Economic & Financial Superstorm That Will Devastate America - 7th Oct 15
Summers Grades Janet Yellen's Fed Performance 'Incomplete' - 7th Oct 15
Gold Versus Central Banks Paper Ponzi - 7th Oct 15
QE3 is Over Get Ready for QE4 - 7th Oct 15
How to Profit from Government Mandates in Biofuels - 7th Oct 15
A Key Oil Price Trend That Everyone Is Missing - 6th Oct 15
Stock Market Turn Appears to Have Been Made - 6th Oct 15
Designing a Dividend Growth Portfolio for a Specific Retirement Yield Objective - 6th Oct 15
Peter Schiff Predicts Gold Price Breakout - Video - 6th Oct 15
Theresa May Declares War on Immigration - Conference Speech Full Transcript - 6th Oct 15
Is Russia Plotting To Bring Down OPEC? - 6th Oct 15
Target Date Funds As Aid In Retirement Investment Portfolio Design - 6th Oct 15
Stocks Bear Market Apocalypse Imminent Crash Gets Nuked Again - 6th Oct 15
Redesigning Internet and Facebook to Explore Their Full Potentialities... - 5th Oct 15
Nightshades Curb Your Enthusiasm - 5th Oct 15
U.S. Recession Watch, High-Yield – Rising Defaults - 5th Oct 15
The Social Challenge to Find Humanity in Capitalism - 5th Oct 15
Fed Interest Rate Hike: "I don't care. It doesn't really make much of a difference" - 5th Oct 15
Gold Rose 2.2%, Silver Surged 5.4% After Poor Jobs Number On Friday - 5th Oct 15
Gold, Silver Precious Metals: a Critical Week Ahead - 5th Oct 15
Stock Market Correction Still in Force - 5th Oct 15
Gold Price Change in Character - 5th Oct 15
Putin’s Blitz Leaves Washington Rankled and Confused - 4th Oct 15
More Selling for Stock Market, Gold? - 4th Oct 15
Gold And Silver – A Reality Check - 3rd Oct 15
Stock Market Primary IV Still, or Primary V Underway? - 3rd Oct 15
The Oil Industry’s Day of Reckoning - 3rd Oct 15
U.S. Interest Rate Hikes Keep On Slippin' Into the Future; Treasury Yields Sink Again - 3rd Oct 15
China's Stock Market Crashing; Time for Panic or Restraint - 3rd Oct 15
SPX Stocks Bulls Struggle to Regain the Upper hand... - 2nd Oct 15
The Two Faces of Stock Market Volatility - 2nd Oct 15
Money Supply and the Fed’s Serious Inflation Risks - 2nd Oct 15
Stock Market How Bad Can This Get, And How Fast? - 2nd Oct 15
A Worrying Set Of Recession Signals - 2nd Oct 15
Negative Jobs Report Sents SPX, TNX Lower - 2nd Oct 15
Don't be Fooled by the Recent Equity market Rallies. Its a Bear Market, Stupid! - 2nd Oct 15
US Bond Market - How to Fix This - 2nd Oct 15
Survival Secrets from Colorado Resource Investing Front Lines - 2nd Oct 15

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

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


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

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 , 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.

© 2005-2015 - 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

Biggest Debt Bomb in History