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
Silver Springboards Higher – What’s Next? - 26th May 20
Stock Market Key Resistance Breakout Is Where the Rubber Meets the Road - 26th May 20
5 Ways To Amp Up Your CFD Trading Today - 26th May 20
The Anatomy of a Gold Stock Bull Market - 26th May 20
Stock Market Critical Price Level Could Soon Prompt A Big Move - 25th May 20
Will Powell Decouple Gold from the Stock Market? - 25th May 20
How Muslims Celebrated EID in Lockdown Britain 2020 - UK - 25th May 20
Stock Market Topping Behavior - 24th May 20
Fed Action Accelerates Boom-Bust Cycle; Not A Virus Crisis - 23rd May 20
Gold Silver Miners and Stocks (after a quick drop) Ready to Explode - 23rd May 20
3 Ways to Prepare Financially for Retirement - 23rd May 20
4 Essential Car Trade-In Tips To Get The Best Value - 23rd May 20
Budgie Heaven at Bird Land - 23rd May 20
China’s ‘Two Sessions’ herald Rebound of Economy - 22nd May 20
Signs Of Long Term Devaluation US Real Estate - 22nd May 20
Reading the Tea Leaves of Gold’s Upcoming Move - 22nd May 20
Gold, Silver, Mining Stocks Teeter On The Brink Of A Breakout - 21st May 20
Another Bank Bailout Under Cover of a Virus - 21st May 20
Do No Credit Check Loans Online Instant Approval Options Actually Exist? - 21st May 20
An Eye-Opening Perspective: Emerging Markets and Epidemics - 21st May 20
US Housing Market Covid-19 Crisis - 21st May 20
The Coronavirus Just Hit the “Fast-Forward” Button on These Three Industries - 21st May 20
AMD Zen 3 Ryzen 9 4950x Intel Destroying 24 core 48 thread Processor? - 21st May 20
Dow Stock Market Trend Analysis and Forecast - 20th May 20
The Credit Markets Gave Their Nod to the S&P 500 Upswing - 20th May 20
Where to get proper HGH treatment in USA - 20th May 20
Silver Is Ensured A Prosperous 2020 Thanks To The Fed - 20th May 20
It’s Not Only Palladium That You Better Listen To - 20th May 20
DJIA Stock Market Technical Trend Analysis - 19th May 20
US Real Estate Showing Signs Of Covid19 Collateral Damage - 19th May 20
Gold Stocks Fundamental Indicators - 19th May 20
Why This Wave is Usually a Market Downturn's Most Wicked - 19th May 20
Gold Mining Stocks Flip from Losses to 5x Leveraged Gains! - 19th May 20
Silver Price Begins To Accelerate Higher Faster Than Gold - 19th May 20
Gold Will Soar Soon; World Now Faces 'Monetary Armageddon' - 19th May 20
Gold Mining Stocks Fundamentals - 18th May 20
Why the Largest Cyberattack in History Will Happen Within Six Months - 18th May 20
New AMD Ryzen 4900x and 4950x Zen3 4th Gen Processors Clock Speed and Cores Specs - 18th May 20
Learn How to Play the Violin, Kids Activities and Learning During Lockdown - 18th May 20
The Great Economy Reopening Gamble - 17th May 20
Powell Sends a Message With Love for Gold - 17th May 20
An Economic Renaissance Emerges – Stock Market Look Out Below - 17th May 20
Learn more about the UK Casino Self-exclusion - 17th May 20
Will Stocks Lead the Way Lower for Gold Miners? - 15th May 20
Are Small-Cap Stocks (Russell 2k) Headed For A Double Dip? - 15th May 20
Coronavirus Will Wipe Out These Three Industries for Good - 15th May 20
Gold and Silver: As We Go from Deflation to Hyperinflation - 15th May 20

Market Oracle FREE Newsletter


Gold and Silver Post Gains on High Likelihood of Central Bank Stimulus

Commodities / Gold and Silver 2012 Aug 06, 2012 - 10:58 AM GMT

By: Ben_Traynor


Best Financial Markets Analysis ArticleBOTH THE spot gold and spot silver price posted gains in Monday morning's London trading, with the gold price hitting $1610 an ounce– a few Dollars up on where it ended last week – as stocks and the Euro also rallied, with analysts speculating on whether central banks will conduct further stimulus measures.

"There is still room for [Federal Reserve] easing if it is required," says David Jollie, analyst at Mitsui Precious Metals in London.

"There is still a perception that it may be required...the question of when that is, with the US elections approaching, makes it difficult to be super bullish on gold."

"We think the likelihood of further central bank moves remains high, particularly in Europe" agree analysts at Barclays.

The silver price meantime climbed as high as $27.93 an ounce this morning – a few cents above Friday's close – while other commodities were broadly flat.

Precious metals prices held on to most of their gains from Friday's rally, which coincided with a stock market rally following better-than expected US nonfarm jobs data, as well as news that Spain may seek a bailout.

Spain's prime minister Mariano Rajoy told reporters Friday he would do whatever is "in the best interest of the Spanish people" – remarks widely reported as a hint that Spain could at some point seek a bailout on top of the €100 billion of aid agreed in June.

A day earlier on Thursday, European Central Bank president Mario Draghi said that the use of bailout funds was a "necessary condition" ahead of any "non-standard" measures by the ECB.

"What I want to know is what these measures are," Rajoy told a press conference Friday, "what they mean and whether they are appropriate and, in light of the circumstances, we will make a decision, but I have still not taken any decision [on whether to ask for a bailout]."

Draghi spoke last week of "severe malfunctioning" in the market for government bonds, leading to speculation that the ECN might be considering intervening in an effort to keep borrowing costs down.

"The tensions that have accompanied the Eurozone in the past years are already showing signs of a psychological dissolution of Europe," Italian prime minister Mario Monti said in an interview with German newspaper Der Spiegel published over the weekend.

"Italy has, to all intents and purposes, been hung out to dry" by Draghi's insistence that governments seek bailout assistance before the ECB will act, according to Nicholas Spiro at consultancy Spiro Sovereign Strategy, which specializes in sovereign credit risk.

"As far as Rome is concerned any external assistance would be the kiss of death. This puts Mr Monti in an untenable situation."

"We're a lot less optimistic that policy makers will be able to get their act together quickly," adds John Shin, foreign exchange strategist at Bank of America in New York, suggesting that any rallies for the Euro would be an "opportunity to sell".

"The ultimate goal of monetary and fiscal policy in [Europe] is to re-engage the private sector," writes Bill Gross, head of world's largest bond fund Pimco, in the Financial Times.

"They want your money...but private investors are balking – and for what it seems are good reasons – because policy makers’ efforts have been, until now, a day late and a Euro short, or more accurately, years late and a trillion Euros short."

Over in New York meantime, the difference between bullish and bearish contracts held by Comex gold futures and options traders – the so-called speculative net long – rose by 25% in the week to last Tuesday, figures published by the Commodity Futures Trading Commission show.

The CFTC meantime is set to drop a four-year investigation into allegations of silver price manipulation, the FT reports.

By Ben Traynor

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 - 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