Best of the Week
Most Popular
1. Five Charts That Show We Are on the Brink of an Unthinkable Financial Crisis- John_Mauldin
2.Bitcoin Parabolic Mania - Zeal_LLC
3.Bitcoin Doesn’t Exist – 2 - Raul_I_Meijer
4.Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - Nadeem_Walayat
5.Labour Sheffield City Council Election Panic Could Prompt Suspension of Tree Felling's Private Security - N_Walayat
6.War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat Part2 - Stewart_Dougherty
7.How High Will Gold Go? - Harry_Dent
8.Bitcoin Doesn’t Exist – Forks and Mad Max - Raul_I_Meijer
9.UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - GoldCore
10.New EU Rules For Cross-Border Cash, Gold Bullion Movements - GoldCore
Last 7 days
Pension Crisis And Deficit of £2.6 Billion At Carillion To Impact UK - 22nd Jan 18
Two Factors for Gold That You Don’t Want to Miss - 22nd Jan 18
Why You Must Own Silver in 2018 - 22nd Jan 18
This Could Be The Hottest Mining Stock Of 2018 - 22nd Jan 18
Stock Index Trend Trade Setups for the SP500 & NASDAQ - 22nd Jan 18
Stock Market Deceleration / Distribution - 22nd Jan 18
US Markets vs Govt Shutdown: Stock Markets at all time highs - 22nd Jan 18
Land Rover Discovery Sport - 1 Month Driving Test Review - 22nd Jan 18
Why should you use high-quality YouTube to mp3 converter? - 22nd Jan 18
Silver As Strategic Metal: Why Its Price Will Soar - 21st Jan 18
Stocks, Gold and Interest Rates Three Amigos Ride On - 21st Jan 18
Why Sometimes, "Beating the S&P 500" Isn't Good Enough - 21st Jan 18
Bunnies and Geckos of Sheffield Street Tree Fellings Protests Explained - 21st Jan 18
Jim Rickards: Next Financial Panic Will Be the Biggest of All, with Only One Place to Turn… - 20th Jan 18
Macro Trend Changes for Gold in 2018 and Beyond - Empire Club of Canada - 20th Jan 18
Top 5 Trader Information Sources for Timely, Successful Investing - 20th Jan 18
Bond Market Bear Creating Gold Bull Market - 19th Jan 18
Gold Stocks GDX $25 Breakout on Earnings - 19th Jan 18
SPX is Higher But No Breakout - 19th Jan 18
Game Changer for Bitcoin - 19th Jan 18
Upside Risk for Gold in 2018 - 19th Jan 18
Money Minute - A 60-second snapshot of the UK Economy - 19th Jan 18
Discovery Sport Real MPG Fuel Economy Vs Land Rover 53.3 MPG Sales Pitch - 19th Jan 18
For Americans Buying Gold and Silver: Still a Big U.S. Pricing Advantage - 19th Jan 18
5 Maps And Charts That Predict Geopolitical Trends In 2018 - 19th Jan 18
North Korean Quagmire: Part 2. Bombing, Nuclear Threats, and Resolution - 19th Jan 18
Complete Guide On Forex Trading Market - 19th Jan 18
Bitcoin Crash Sees Flight To Physical Gold Coins and Bars - 18th Jan 18
The Interest Rates Are What Matter In This Market - 18th Jan 18
Crude Oil Sweat, Blood and Tears - 18th Jan 18
Land Rover Discovery Sport - Week 3 HSE Black Test Review - 18th Jan 18
The North Korea Quagmire: Part 1, A Contest of Colonialism and Communism - 18th Jan 18
Understand Currency Trade and Make Plenty of Money - 18th Jan 18
Bitcoin Price Crash Below $10,000. What's Next? We have answers… - 18th Jan 18
How to Trade Gold During Second Half of January, Daily Cycle Prediction - 18th Jan 18
More U.S. States Are Knocking Down Gold & Silver Barriers - 18th Jan 18
5 Economic Predictions for 2018 - 18th Jan 18
Land Rover Discovery Sport - What You Need to Know Before Buying - Owning Week 2 - 17th Jan 18
Bitcoin and Stock Prices, Both Symptoms of Speculative Extremes! - 17th Jan 18
So That’s What Stock Market Volatility Looks Like - 17th Jan 18
Tips On Choosing the Right Forex Dealer - 17th Jan 18
Crude Oil is Starting 2018 Strong but there's Undeniable Risk to the Downside - 16th Jan 18
SPX, NDX, INDU and RUT Stock Indices all at Resistance Levels - 16th Jan 18
Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver” - 16th Jan 18
Carillion Bankruptcy and the PFI Sector Spiraling Costs Crisis, Amey, G4S, Balfour Beatty, Serco.... - 16th Jan 18
Artificial Intelligence - Extermination of Humanity - 16th Jan 18
Carillion Goes Bust, as Government Refuses to Bailout PFI Contractors Debt and Pensions Liabilities - 15th Jan 18
What Really Happens in Iran?  - 15th Jan 18
Stock Market Near an Intermediate Top? - 15th Jan 18
The Key Economic Indicator You Should Watch in 2018 - 15th Jan 18
London Property Market Crash Looms As Prices Drop To 2 1/2 Year Low - 15th Jan 18
Some Fascinating Stock Market Fibonacci Relationships... - 15th Jan 18

Market Oracle FREE Newsletter

6 Critical Money Making Rules

Gold and Silver Jump to 3-Week Highs as ECB Chief Draghi Promises to Print Euro's

Commodities / Crude Oil Jul 26, 2012 - 08:27 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleThe WHOLESALE-MARKET gold price leapt more than 1% inside an hour in London trade Thursday morning, setting 3-week highs above $1620 per ounce after European Central Bank chief Mario Draghi said "The ECB is ready to do whatever it takes to preserve" the single Euro currency.

"And believe me, it will be enough."


Speaking in London one day after the gold price jumped following fresh rumors of more quantitative easing by the US Federal Reserve, Draghi did not specify plans, but did point to the high bond yields now being paid by Eurozone members such as Italy and Spain.

"To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate," said the ECB president.

"We have to cope with the financial fragmentation, address these issues."

Spanish bond yields retreated as debt prices rose today, while Eurozone stock markets jumped more than 1%.

The Euro currency leapt 1.5¢ within minutes of Draghi's comments, knocking the gold price in Euros back below €42,500 per kilo – the 5-month high broken earlier on Thursday.

Gold still held just 4%, however, off September 2011's all-time Euro high.

"It's not obvious central banks have been effective, but they're going to keep trying," says John Stopford at the $98 billion UK asset manager, Investec, speaking to Bloomberg.

"Gold has shown itself sensitive to monetary policy announcements this year and any indication of further easing would buoy gold prices," says HSBC precious metals analyst James Steel, looking ahead to Friday's release of second-quarter US economic growth data.

"Gold has been the ultimate wealth preserver for millennia while currencies have tended to have shorter lives," write J.P.Morgan analysts John Bridges and Shwetabh Shrivastava in a new report on the mining sector.

However, "In the short term declining inflation rates are not consistent with the case that previous monetary stimulus will drive gold prices higher," they add.

"While we wait, investor confidence [in gold mining equities] is under pressure."

After failing to follow gold's sharp rise on Wednesday, silver prices also jumped today, hitting a 3-week high at $27.90 per ounce as industrial commodities including platinum also rose.

"We remain gloomy on the Euro crisis," says a new report from Citigroup's chief economist – and former Bank of England policymaker – Willem Buiter today, forecasting a 90% chance of Greece quitting the 17-nation Eurozone by end-2013.

Those odds have been raised from Citi's previous forecast of a 50-75% shot.

Picking up German magazine Speigel's weekend claim that the International Monetary Fund won't provide further aid to Greece once the Eurozone's own permanent funding is in place, Citi's report also follows a move by the Moody's rating agency to put German, Dutch and Luxembourg debt on "negative outlook" by forecasting downgrades to all European sovereign states, including the UK.

The gold price in Sterling whipped violently as the Euro currency jumped and the Dollar fell, eventually trading unchanged by lunchtime in London at £1035 per ounce – back where it stood when the Bank of England announced another £50 billion injection of quantitative easing three weeks ago.

"We might see a bit more selling if the gold price stays above $1605 an ounce," warned a Singapore-based dealer to Reuters overnight, with other Asian traders reporting a rise in scrap supply after Wednesday's 1.5% jump.

But "physical buying has been supportive over the past week," says a report from Standard Bank, and "Indian buying has also begun to show signs of improving.

"Seasonally, Indian demand for physical gold usually picks up in August ahead of the wedding season. Gold futures market participants in India are already anticipated this, as seen in their positioning."

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.


© 2005-2018 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