Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Markets Failing to Give Another AI Mega-trend Buying Opportunity - 6th Jun 20
Is the Stock Bulls' Cup Half-Full or Half-Empty? - 6th Jun 20
Is America Headed for a Post-Apocalyptic Currency Collapse? - 6th Jun 20
Potential Highs and Lows For Gold In 2020 - 5th Jun 20
Tying Gold Miners and USD Signals for What Comes Next - 5th Jun 20
Rigged Markets - Central Bank Hypnosis - 5th Jun 20
Gold’s role in the Greater Depression of 2020 - 5th Jun 20
UK Coronavirus Catastrophe Trend Analysis Video - 5th Jun 20
Why Land Rover Discovery Sport SAT NAV is Crap, Use Google Maps Instead - 5th Jun 20
Stock Market Election Year Cycles – What to Expect? - 4th Jun 20
Why Solar Stocks Are Rallying Against All Odds - 4th Jun 20
East Asia Will Be a Post-Pandemic Success - 4th Jun 20
Comparing Bitcoin to Other Market Sectors – Risk vs. Value - 4th Jun 20
Covid, Debt and Precious Metals - 3rd Jun 20
Gold-Silver Ratio And Correlation - 3rd Jun 20
The Corona Riots Begin, US Covid-19 Catastrophe Trend Analysis - 3rd Jun 20 -
Stock Market Short-term Top? - 3rd Jun 20
Deflation: Why the "Japanification" of the U.S. Looms Large - 3rd Jun 20
US Stock Market Sets Up Technical Patterns – Pay Attention - 3rd Jun 20
UK Corona Catastrophe Trend Analysis - 2nd Jun 20
US Real Estate Stats Show Big Wave Of Refinancing Is Coming - 2nd Jun 20
Let’s Make Sure This Crisis Doesn’t Go to Waste - 2nd Jun 20
Silver and Gold: Balancing More Than 100 Years Of Debt Abuse - 2nd Jun 20
The importance of effective website design in a business marketing strategy - 2nd Jun 20
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like TRADE.com are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Gold Struggles at $1600 Post-Fed

Commodities / Gold and Silver 2012 Aug 02, 2012 - 04:49 AM GMT

By: Adrian_Ash

Commodities

Best Financial Markets Analysis ArticleWHOLESALE PRICES for gold investment bars struggled just above $1600 per ounce in London on Thursday, after dipping below that level for the first time in a week as the US Federal Reserve left monetary policy unchanged yesterday.

"Immediate QE is off the table," Reuters quotes Frank McGhee, chief precious metals trader at Chicago's Integrated Brokerage Services.


"I will probably not be surprised to see them not do anything in September."

The Bank of England today followed the US Fed in leaving UK policy unchanged in its midday announcement. The European Central Bank was also expected to make no change to its record-low rates of 0.75% per year.

Stock markets meantime ticked higher, while crude oil held onto a sharp rally but major-government bond prices also rose.

Silver prices ticked around $27.50 per ounce after hitting their own 1-week low versus the Dollar.

"Increased or decreased prospects of [central-bank] intervention seem to be the rationale for any move in precious metals at the moment," says a London analyst in a note.

Ahead of Wednesday's Fed decision, "Gold's $50 gain since Mario Draghi's pledge to 'do whatever it takes' last week suggested high expectations were priced in," he adds.

Italy's prime minister Mario Monti yesterday told reporters that a banking license for the European Stability Mechanism "will in due course occur" – meaning that the €500 billion ($615bn) bail-out fund could buy government debt using money borrowed from the European Central Bank.

But "a banking license for the ESM rescue fund is absolutely not our way," said German spokesman Georg Streiter after a cabinet meeting in Berlin.

German Bundesbank chief Jens Weidmann – a member of the ECB meeting together with the 16 other national Eurozone central bank heads today – is also against such a move.

"If the ECB doesn't do something today, there will be disappointment," reckons Japanese conglomerate Mitsubishi's precious metals analyst Matthew Turner, speaking to CNBC.

"But they will have to do something at some point. The situation...will force them," says Turner, pointing to support for gold investment prices at the June and July lows around $1550 per ounce.

Back in Washington, and where the Federal Reserve's June statement said "The Committee is prepared to take further action as appropriate," this week's press release said it will "will provide additional accommodation as needed."

The Dollar rose fast on the "no change" decision against the European single currency, but gave back most of its gains by Thursday lunchtime in London to trade at $1.228 per Euro.

"Gold prices have dropped in the aftermath of every [Fed] meeting this year with the exception of January," said a note from bullion-bank and London market-maker HSBC's precious metals team last night.

Just as on Wednesday this week, "The bulk of losses then were pared or reversed in late session trading the same day."

Over in Asia, the Bank of Korea said today its gold investment increased by 16 tonnes in July, the third such rise in a year. That took gold holdings at the world's 7th largest central bank to 70.4 tonnes, equal to 0.9% of its total reserves – up from 0.1% only five years ago.

Central banks globally hold an average 1.4% of their reserves in gold investment bars, according to data from market-development organization the World Gold Council.

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.


Post Comment

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

6 Critical Money Making Rules