Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
UK EU Election Results, Brexit Party Victory, Labour and Tory Bloodbath, UKIP and ChangeUK Die - 27th May 19
The Three M's of Hyperinflation : Milosevic, Mugabe, And Maduro - 26th May 19
Global Multi-Market / Asset Charts Review - 26th May 19
An Oil Shock Could Be the Black Swan That Finally Drives Gold Higher - 26th May 19
Brexit Party Forces Theresa May to Resign, Boris Johnson Next Tory Prime Minister? - 26th May 19
IBM - Investing in AI Machine Intelligence Stocks - 25th May 19
Seasonal Dysfunction: Why Generations of Gold and Silver Investors Are Having Such Difficulty - 25th May 19
Employment - The Good and the Bad of Job Automation - 25th May 19
Gold Mining Mid-Tier Stocks Fundamentals - 25th May 19
Buy This Pick-and-Shovel 5G Stock Before It Takes Off - 25th May 19
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

Gold Bears "Wrong" About Dollar as Spain Raises Debt

Commodities / Gold and Silver 2012 Jun 07, 2012 - 11:59 AM GMT

By: Adrian_Ash

Commodities Best Financial Markets Analysis ArticleWHOLESALE MARKET gold prices eased back from an earlier rally Thursday lunchtime in London, trading at $1623 per ounce as the Euro currency slipped from a 1-week high $1.26 after new data showed US jobless claims continuing to fall.

The Bank of England left UK monetary policy unchanged at its scheduled monthly meeting, but the People's Bank of China surprised analysts by cutting interest rates for the first time since early 2009.


European stock markets bounced further from their 3-year lows, and Brent crude oil – the European benchmark – rallied after slipping once more near 16-month lows at $100 per barrel.

The price of silver bullion jumped within 25¢ of Wednesday's 1-month high near $30 per ounce.

"Gold's performance over the past month has not been positive but has been the best of the bad bunch," writes Walter de Wet at Standard Bank today.

"However, movements in the US Dollar [are] only a short-term driver of gold prices...As a result, we believe that turning structurally bearish on gold purely because of a stronger Dollar (or weaker Euro) would be wrong [and] continue to look for a gold price above $1900 in Q4."

"The gold bulls are desperately hoping for further mention of some form of stimulus," writes Marex Spectron's David Govett in a note, looking to US Federal Reserve chairman Ben Bernanke's appearance at the Senate today.

"If however, as I personally believe, the Fed leaves things as they are for the time being, this will be viewed as negative and gold will fall."

Over in Europe today, Spain successfully raised €2 billion ($2.6bn) in new government bonds, but at a cost of 6.04% annual interest on 10-year debt.

Commenting at his monthly press conference Wednesday after leaving Eurozone rates and bank-support lending unchanged, "Some of the problems in the Euro area have nothing to do with monetary policy," said European Central Bank president Mario Draghi.

"I don't think it is right for monetary policy to fill other institutions' lack of action."

Today's Financial Times leads with un-sourced comments that "Unlike earlier bailouts for Greece, Portugal and Ireland, the proposed Spanish rescue would require few austerity measures beyond reforms already agreed with the EU."

Such austerity as has already happened means Madrid – which needs perhaps €400 billion ($500bn) on some estimates to recapitalize its domestic banks – "could even dispense with the close monitoring by international lenders that has proved contentious in Athens and Dublin."

The Wall Street Journal meantime reports that China Investment Corp. – the sovereign wealth fund running much of Beijing's public savings – now deems the risk of a Eurozone break-up "too big" and has cut its holdings of Euro-denominated stocks and bonds.

After announcing a drop of one-sixth in its Euro debt holdings yesterday, Kazakhstan's central bank today said it will buy gold worth some $1 billion to raise the proportion of bullion in its reserves from 12% to 15%.

At current gold prices, the move should take Kazakhstan's official holdings from 98 to some 120 tonnes.

"Quantitative easing in Europe will infuse liquidity and add little bit more confidence," said commodities researcher Amrita Sen of Barclays Capital to CNBC-TV18 in India this morning.

"The continued flight from capital and risky assets should benefit gold prices."

Gold prices for Indian consumers – the world's heaviest buyers – yesterday reached new record highs, hitting some INR 30,400 per 10 grams and rising at an average annual rate of 28% since the Western world's banking crisis began in June 2007.

China's gold imports through Hong Kong were reported earlier this week to have hit 102 tonnes in April, some 60% higher from a year earlier but below the record set last November when re-exports of 34 tonnes are included.

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.


Comments

DB
07 Jun 12, 21:21
Gold bulls "Wrong" about gold

You forgot to mention: Indians are now recycling and SELLING gold its too expensive to buy any more (except on credit but that's another story), Chinese are flipping gold around as collateral for currency arbitrage trades as they do with other metals - hence the anomalous import/export data, central banks are still buying - only 45% less than they did a year ago. So who is actually really buying gold? ETFs are the only ones holding up the physical demand, and we know how quickly that can turn around.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules