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 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
The AI Mega-trend Stocks Investing - When to Sell? - 28th May 20
Trump vs. Biden: What’s at Stake for Precious Metals Investors? - 28th May 20
Stocks: What to Make of the Day-Trading Frenzy - 28th May 20
Why You’ll Never Get Another Stimulus Check - 28th May 20
Implications for Gold – 2007-9 Great Recession vs. 2020 Coronavirus Crisis - 28th May 20
Ray Dalio Suggests USA Is Entering A Period Of Economic Decline And New World Order - 28th May 20
Europe’s Coronavirus Pandemic Dilemma - 28th May 20
I Can't Pay My Payday Loans What Will Happen - 28th May 20
Predictive Modeling Suggests US Stock Markets 12% Over Valued - 27th May 20
Why Stocks Bear Market Rallies Are So Tricky - 27th May 20
Precious Metals Hit Resistance - 27th May 20
Crude Oil Cuts Get Another Saudi Boost as Oil Demand Begins to Show Signs of Life - 27th May 20
Where the Markets are heading after COVID-19? - 27th May 20

Market Oracle FREE Newsletter

Coronavirus-stocks-bear-market-2020-analysis

Gold Headed for Third Straight Monthly Gain, Bernanke Speech "Unlikely to Give Clear Policy Signal"

Commodities / Gold and Silver 2012 Aug 31, 2012 - 06:54 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleWHOLESALE prices to buy gold bullion hovered close to $1660 an ounce Friday morning in London, around ten Dollars below where they started the week, while stock markets gained and US Treasuries sold off, ahead of today's much-anticipated speech by Federal Reserve chairman Ben Bernanke and Monday's Labor Day holiday in the US.


Silver bullion rose to $30.67 per ounce, slightly below last week's close, while other commodities were also broadly flat.

Based on London gold fix prices, Dollar gold bullion prices looked set for a third straight monthly gain by Friday lunchtime in London, trading around 2.3% higher than the final July fix price.

The gold price in Sterling looked set for a 1% monthly gain. Gold in Euros by contrast was trading slightly below where it ended last month, dropping to €42,358 per kilo (€1317 per ounce) during Friday morning's trading.

"For now, we have a bit of a cautious approach to the gold market," says Credit Suisse analyst Tobias Merath.

"Expectations for more [Fed] monetary easing would have to be fulfilled to break higher here."

Bernanke is due to speak later today at the annual Jackson Hole conference of central bankers.

"We believe that Bernanke will avoid sending a clear signal about Fed intentions for the September meeting," says a note from Barclays, referring to next month's Federal Open Market Committee meeting.

"The market's disappointment could have a modest negative effect on risk appetite in coming days."

"This is a speech, not an FOMC meeting," adds Michael Feroli, chief US economist at JPMorgan.

"We do not think Bernanke is inclined to front-run the Committee less than two weeks ahead of the next meeting."

Indian gold bullion importers were waiting for further falls in the gold price Friday, according to a report from newswire Reuters.

"There's not much sale of gold scraps," adds one dealer in Hong Kong.

Here in Europe, the European Commission has proposed that the European Central Bank be given supervisory authority over all Eurozone banks, removing such powers from many national bodies, the Financial Times reports.

Also writing in the FT, German finance minister Wolfgang Schaeuble counters that a supervisory body should only focus on those larger banks that "pose a systemic risk at a European level".

"This is not just in line with the tested principle of subsidiarity," writes Schaeuble.

"It is also common sense; we cannot expect a European watchdog to supervise directly all of the region's lenders – 6000 in the Eurozone alone – effectively."

Schaeuble adds that Europe "must eschew yesterday's light-touch approach for good and endow this supervisor with real and clearly defined responsibilities, coercive powers and adequate resources."

Germany has said the creation of a single Eurozone banking supervisor is a pre-requisite before Eurozone bailout funds can be loaned directly to banks. Currently, any government borrowing money to support its nation's banking sector must take that borrowing onto its own books, raising its national debt-to-GDP ratio.

In June, Spain agreed a €100 billion credit line to fund the restructuring of its banking sector. Despite this, Madrid is considering using its own money to support the country's biggest lender Bankia rather than use European Union money, in order to avoid forcing bondholders to take losses, news agency Bloomberg reports.

Eurozone inflation rose to 2.6% this month – up from 2.4% in July – according to data published Friday, while unemployment in the single currency area remained at 11.3%.

German Bundesbank chief Jens Weidmann has on several occasions considered resigning over ECB plans to intervene in sovereign bond markets as it went against the central bank's policy of not financing governments, according to a report in Friday's edition of tabloid Bild. Weidmann has however agreed to stay on the urging of the German government, the report says.

"Opposition [to ECB bond buying] from Weidmann and reservations from some other [ECB Governing] Council members will mean that ECB bond purchases would be highly conditional," says Holger Schmieding, economist at Berenberg Bank.

"[It would] be focused on the short end and would not aim to bring yields down quite as much as Italy and Spain might like to see."

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