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
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

Pressure Mounting on Gold, But Central banks Still Adding to Reserves

Commodities / Gold and Silver 2012 Jun 27, 2012 - 06:13 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleU.S. DOLLAR gold prices dropped as low as $1565 an ounce during Wednesday morning's London trade – 1.4% down on this week's high – before recovering some ground by lunchtime, while stock markets posted slight gains ahead of tomorrow's European Union summit.

Silver prices traded below $27 an ounce for most of this morning, while other industrial commodities were broadly flat on the day by lunchtime.


On the currency markets meantime, the Euro was broadly flat against the Dollar, trading just below $1.25 for most of the morning.

"We're in a bit of a period over the summer when we are going to see very little meaningful action by policymakers in three key regions – Europe, the US and China," reckons Daniel Brebner, head of metals research at Deutsche Bank.

"Pressures in the gold market will continue to mount...I don't think there's any kind of catalyst near term for a significant rebound in gold prices."

Brebner adds however that he expects "very steady buying by central banks" to continue, which "should help gold prices from weakening too much".

At tomorrow's EU summit, Italian prime minister Mario Monti is expected to propose using money from Eurozone bailout funds to ease sovereign borrowing costs by buying debt on the open market, the Financial Times reports, despite the policy drawing criticism from Bundesbank president Jens Weidmann after it was put forward last week.

Weidmann described the idea as "state financing via the central bank printing press", prompting Monti to respond that the Bundesbank chief has "badly misunderstood" the proposal.

Italy sold €9 billion of six-month bills Wednesday, at an average yield of 2.96% – up from 2.10% last month.

"Today's bill sale points to the sovereign getting this supply away but at yield levels sufficiently elevated to leave a niggling doubt at least as to the medium-term sustainability of the country's public finances," says Rabobank strategist Richard McGuire.

Italy's rise in borrowing costs follows an auction the previous day that saw 2-Year yields rise to 4.71%, their highest level since December.

Italy is due to auction €5.5 billion of 5-Year and 10-Year bonds tomorrow. On the bond markets, 10-Year bonds traded at yields as high as 6.2% Wednesday morning, up from 5.9% at the start of June.

Elsewhere in Europe, German chancellor Angela Merkel told the German parliament Wednesday
there is no "magic formula" that will solve the Eurozone crisis.

"It is imperative that we don't promise things that we cannot deliver and that we implement what we have agreed," said Merkel, adding that joint liability for sovereign debts "can only happen when sufficient controls are in place."

"I don't see total debt liability as long as I live," German chancellor Angela Merkel reportedly told her Free Democrat coalition partners Tuesday.

Over in Madrid, the Spanish government has scrapped a tax rebate for homeowners brought in six months ago by prime minister Mariano Rajoy to meet election promises, citing its growing budget deficit.

"The deficit has started on a downward path and we expect that to intensify," said deputy budget minister Marta Fernandez Curras Tuesday.

Here in London, Bank of England governor Mervyn King cited "worsening...in the [economic] position in Asia and other emerging markets" as a reason he voted for an additional £50 billion of quantitative easing earlier this month.

"We are in the middle of a deep crisis," King told the Treasury Committee on Tuesday, "with enormous challenges to put our own banking system right and challenges for the rest of the world that they are struggling with."

Proposed additional QE was defeated by five votes to four at the June Monetary Policy Committee meeting. The MPC makes its next policy announcement Thursday next week.

The central banks of Kazakhstan, Russia, Turkey and Ukraine were among those who added to their gold bullion holdings last month, according to figures published Tuesday by the International Monetary Fund.

India's central bank meantime is considering banning the sale of gold coins by the country's banks, according to India press reports on Wednesday.

Indian trade with Dubai meantime totaled $10 billion in the first quarter of this year – making India Dubai's biggest trading partner ahead of China – data published by Dubai Customs show. gold bullion represented both the biggest import and biggest export for Dubai.

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