Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
1. GOOGLE (Alphabet) - Primary AI Tech Stock For Investing 2020 - 17th Jan 20
ERY Energy Bear Continues Basing Setup – Breakout Expected Near January 24th - 17th Jan 20
What Expiring Stock and Commodity Market Bubbles Look Like - 17th Jan 20
Platinum Breaks $1000 On Big Rally - What's Next Forecast - 17th Jan 20
Precious Metals Set to Keep Powering Ahead - 17th Jan 20
Stock Market and the US Presidential Election Cycle  - 16th Jan 20
Shifting Undercurrents In The US Stock Market - 16th Jan 20
America 2020 – YEAR OF LIVING DANGEROUSLY (PART TWO) - 16th Jan 20
Yes, China Is a Currency Manipulator – And the U.S. Banking System Is a Metals Manipulator - 16th Jan 20
MICROSOFT Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 15th Jan 20
Silver Traders Big Trend Analysis – Part II - 15th Jan 20
Silver Short-Term Pullback Before Acceleration Higher - 15th Jan 20
Gold Overall Outlook Is 'Strongly Bullish' - 15th Jan 20
AMD is Killing Intel - Best CPU's For 2020! Ryzen 3900x, 3950x, 3960x Budget, to High End Systems - 15th Jan 20
The Importance Of Keeping Invoices Up To Date - 15th Jan 20
Stock Market Elliott Wave Analysis 2020 - 14th Jan 20
Walmart Has Made a Genius Move to Beat Amazon - 14th Jan 20
Deep State 2020 – A Year Of Living Dangerously! - 14th Jan 20
The End of College Is Near - 14th Jan 20
AI Stocks Investing 2020 to Profit from the Machine Intelligence Mega-trend - Video - 14th Jan 20
Stock Market Final Thrust - 14th Jan 20
British Pound GBP Trend Forecast Review - 13th Jan 20
Trumpism Stock Market and the crisis in American social equality - 13th Jan 20
Silver Investors Big Trend Analysis for – Part I - 13th Jan 20
Craig Hemke Gold & Silver 2020 Prediction, Slams Biased Gold Naysayers - 13th Jan 20
AMAZON Stock Investing in AI Machine Intelligence Mega-trend 2020 and Beyond - 11th Jan 20
Gold Price Reacting to Global Flash Points - 11th Jan 20
Land Rover Discovery Sport 2020 - What You Need to Know Before Buying - 11th Jan 20
Gold Buying Precarious - 11th Jan 20
The Crazy Stock Market Train to Bull Eternity - 11th Jan 20
Gold Gann Angle Update - 10th Jan 20
Gold In Rally Mode Suggests Commitment of Traders (COT) Data - 10th Jan 20
Disney Could Mount Its Biggest Rally in 2020 - 10th Jan 20
How on Earth Can Gold Decline During the U.S. – Iran Crisis? - 10th Jan 20
Getting Your HR Budget in Line - 10th Jan 20
The Fed Protects Gamblers at the Expense of the Economy - 9th Jan 20
Last Chance to Get Microsoft Windows 10 for FREE! - 9th Jan 20
The Stock Market is the Opiate of the Masses - 9th Jan 20
Is The Energy Sector Setting Up Another Great Entry? - 9th Jan 20
The Fed Is Creating a Monster Bubble - 9th Jan 20
If History Repeats, Video Game Stocks Could Soar 600%+ - 9th Jan 20
What to Know Before Buying a Land Rover Discovery Sport in 2020 - 8th Jan 20
Stock Market Forecast 2020 Trend Analysis - 8th Jan 20
Gold Price at Resistance - 8th Jan 20
The Fed Has Quietly Started QE4 - 8th Jan 20
NASDAQ Set to Fall 1000pts Early 2020, and What it Means for Gold Price - 8th Jan 20
Gold 2020 - Financial Analysts and Major Financial Institutions Outlook - 8th Jan 20
Stock Market Trend Review - 8th Jan 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Gold Sets New Record in India Whilst Spanish Bond Yields Hit New Highs

Commodities / Gold and Silver 2012 Jun 14, 2012 - 06:51 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleWHOLESALE MARKET gold prices rose to $1627 an ounce shortly ahead of US trading on Thursday – their highest level so far this week – immediately following the publication of US economic data.

Silver prices by contrast continued to trade sideways, hovering around $29 an ounce – around 1.6% up on where they started the week.


US consumer price inflation fell to 1.7% last month – down from 2.3% in April – according to official figures published Thursday. This week's initial jobless claims meantime were 386,000 higher than many analysts expected.

A day earlier, official data showed the producer price index, regarded by many as an indicator of commodity price inflation, fell 1.0% in May, while retail sales were down 0.2%.

The Federal Open Market Committee meets next Tuesday and Wednesday to decide on any changes to US monetary policy.

"Once there's evidence that the policymakers on the monetary side are going to have to release stimulus, we should see rising interest in gold and silver," said Jeremy Friesen, Hong Kong-based commodity strategist at Societe Generale, speaking before Thursday's US data was released.

"We feel that [a third round of quantitative easing] is still unlikely at present," counters Marc Ground, commodities strategist at Standard Bank, in a note this morning.

"The best prospect for Fed monetary accommodation coming from an extension or "Operation Twist" and perhaps pushing out their expectations of when rates would be hiked."

Earlier on Thursday, gold prices traded within a $5 range around $1620 an ounce throughout London's morning session, while stocks and commodities traded lower during following more negative ratings action in the Eurozone.

Ratings agency Moody's last night cut its sovereign ratings for Spain and Cyprus. Spain was cut three notches to Baa3 – one notch above junk – while Cyprus fell further into junk territory when its rating was cut to Ba3.

"Moody’s believes that the debts of Euro area sovereigns that are fully dependent upon official sources to fund their borrowing requirements represent speculative-grade risk," said a statement from the ratings agency.

The Eurogroup of single currency finance ministers confirmed on Saturday that Spain will borrow up to €100 billion from Eurozone rescue funds to finance its banking sector restructuring.

Spanish 10-Year bond yields this morning came within touching distance of the 7% mark, hitting a fresh Euro-era high at 6.998%.

Italy meantime successfully auctioned €4.5 billion in government bonds of varying maturities.
Borrowing costs however were higher than last month. The gross yield on three year bonds for example rose to 5.3%, up from 3.91% in May.

Yields on German government debt meantime continued their recent rise Thursday, breaching 1.5% – up from an all-time low of less than 1.13% at the start of the month.

"All eyes are on Germany," Chancellor Angela Merkel told the German parliament this morning, adding that the Eurozone crisis is likely to dominate this weekend's G20 summit.

"[But] Germany’s power is not infinite...We must all resist the temptation to finance growth again through new debt."

"German bund yields [are this morning] behaving more like periphery bonds rather than a safe haven," says a note from UBS, pointing out that German bond yields have been rising faster than those on UK government debt.

"Of course, it is too early to make any conclusions about German bonds losing their safe-haven value...but such a scenario, wherein bunds lose some of their safety appeal, would mean investors would be on the lookout for new 'secure' places to park their money, and given the much-reduced list of alternatives, gold would be one of the top options."

Based on London Fix prices, the gold price in Euros rose to within 5% of its all-time high on Wednesday, dipping slightly to €1289 per ounce at this morning's fixing.

On the currency markets, the Euro traded sideways Thursday morning around $1.256.

"The Euro has been relatively stable as we head into [this Sunday's] Greek election and that will dictate market direction next week," reckons Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi.

"The situation in Europe," Federal Reserve chairman Ben Bernanke told Congress last week, "poses significant risks to the US financial system and economy and must be monitored closely."

"As always, the Federal Reserve remains prepared to take action as needed to protect the US financial system and economy in the event that financial stresses escalate."

Bernanke is due to give a press conference next week following the FOMC meeting on Wednesday.

Switzerland's central bank meantime repeated that it will buy "unlimited quantities" of foreign exchange in order to prevent the Swiss Franc rising above its peg to the Euro at SFr 1.20.

The Swiss National Bank today announced it is keeping its interest rate on hold at 0.0%.

"In the foreseeable future, there is no risk of inflation in Switzerland," said a statement from the SNB.

Over in India, traditionally the world's biggest source of private demand to buy gold, newspapers report gold prices in Delhi hit a new all-time high of Rs 30,550 per 10 grams Thursday, with some dealers citing buying by gold jewelers ahead of the upcoming marriage season.

Dealers elsewhere in Asia however reported "sluggish" demand, according to newswire Reuters.

"June is a quiet month for jewelers' demand," says Dick Poon, precious metals manager at bullion refiner Heraeus in Hong Kong, adding that investors are only buying gold "on dips".

By Ben Traynor
BullionVault.com

Gold price chart, no delay   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.(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