Best of the Week
Most Popular
1.Gold Price Crash Through Key Support, Crude Oil in Freefall - Clive_Maund
2.Marc Faber Warns Japan's Bond-Buying Program is a Ponzi Scheme - Bloomberg
3.Silver Price and Powerful Forces - DeviantInvestor
4.Stocks Bear Market Catastrophe as Stocks Flash Crash to New All Time Highs - Nadeem_Walayat
5.Marc Faber Warns Not to Hold Any Gold in the U.S. - GoldCore
6.U.S. Housing Market San Francisco at Critical Mass - Harry_Dent
7.Global Scramble For Silver - Coins “Hard To Get,” “Premiums Likely To Jump” - GoldCore
8.Major World Stock Market Indices Analysis: SPY, QQQ, DAX, FTSE, CAC, HSI - Michael_Noonan
9.Japan's kaput?! - Axel_Merk
10.Tesco Empire Strikes Back, £5 off £40 Discount Voucher Spend Explained, Exclusions Warning! - Nadeem_Walayat
Last 5 days
Gold Price 2015 - 22nd Nov 14
Stock Market Medium Term Top? - 22nd Nov 14
Is the Gold And Silver Golden Rule Broken? - 22nd Nov 14
Malaysia's Subsidy and Budget Deficit Conundrum - 22nd Nov 14
Investors Hated Gold at Precisely the Wrong Time: What About Now? - 22nd Nov 14
Gold and GLD ETF Selloff - 22nd Nov 14
Currency Wars, the Ruble and Keynes - 21st Nov 14
Stock Market Investor Sentiment in The Balance - 21st Nov 14
Two Biotech Stocks Set to Double on One Powerful Catalyst - 21st Nov 14
Swiss Gold Poll Likely Tighter Than Polls Suggest - 21st Nov 14
Gold's Volatility and Other Things to Watch - 21st Nov 14
Australia Stock Market and AUD Dollar Analysis (ASX200 and AUDUSD) - 21st Nov 14
New Algae Research May Have Uncovered an “Energy Forest” Under the Sea - 21st Nov 14
The Cultural and Political Consequences of Fiat Money - 20th Nov 14
United States Social Crisis - No One Told You When to Run, You Missed the Starting Gun! - 20th Nov 14
Euro-Zone Tooth Fairy Economics, Spain Needs to leave the Euro - 20th Nov 14
Ebola Threat Remains a Risk - New Deaths in Nebraska and New York - 20th Nov 14
Stock Market and the Jaws of Life or Death? - 20th Nov 14
Putin’s World: Why Russia’s Showdown with the West Will Worsen - 20th Nov 14
Making Money While The World Burns - 20th Nov 14
Why This "Quiet Zone" Is Now Tech Stocks Biggest Profit Sector - 20th Nov 14
My Favorite Stock McDonalds Just Got Kicked Off My “Buy” List - 19th Nov 14
European Economies in Perpetual State of Shock, What's Scarier Than Deflation? - 19th Nov 14
Breakfast with a Lord of War and Nuclear Weapons - 19th Nov 14
The U.S. Economy’s Ebb and Flow - 19th Nov 14
What You Need to Know Before Investing in Alibaba - 19th Nov 14
Forget About Crude Oil Price Testing 2009 Low - 19th Nov 14
What Blows Up First? Part 5: Shale Oil Junk Bonds - 19th Nov 14
Bitcoin Price Did We Just See an Important Slump? - 18th Nov 14
How to Profit From Oversold Crude Oil Price - 18th Nov 14
Stock Valuations Outrunning Profits Growth - And the Band Played On - 18th Nov 14
ECB Buy Gold Bullion? Japan's Monetary Policy Dubbed "Ponzi Scheme" - 18th Nov 14
Gold, Silver, Crude and S&P Ending Wedge Patterns - 18th Nov 14
How High Could USD/JPY Go? - 18th Nov 14
On Obama and the Nature of Failed Presidencies - 18th Nov 14
Globalism Free Trade Immigration Connection - 18th Nov 14
An Epiphany From Hell - Buy Gold and Silver - 18th Nov 14
Too Difficult to Get a U.S. Home Loan - 18th Nov 14
Has the Gold Bear Trap Been Set - 18th Nov 14
Gold Price and Miners Soar on Huge Volume - 17th Nov 14
Cameron Says Second Global Economic Crash is Loomin, Japan in Recession - 17th Nov 14
How to Play the Stock Market 2014 Year-End Rally - 17th Nov 14
What The Fed Has Wrought, Who Needs Wage Earners Anyway? - 17th Nov 14
Stock Market Indexes Fluctuate Along Record Levels - Will Uptrend Continue? - 17th Nov 14
Stock Market Trend Deceleration Tends To Precede Corrections - 17th Nov 14
Stocks Bull Market Set to Continue After Consolidation - 17th Nov 14
The World Is Run By Fools, And We Let Them - 17th Nov 14
Gold Price Golden Bottom? - 17th Nov 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Gold Report 2015

Central Bank Action "Good for Gold", ECB Bazooka Needed as Pressure on Spain Intensifies

Commodities / Gold and Silver 2012 Sep 03, 2012 - 06:50 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleSPOT MARKET gold prices hovered close to $1690 an ounce during Monday morning's London trading, close to five month highs hit after Friday's speech by US Federal Reserve chairman Ben Bernanke, in which he noted the US economic situation is "far from satisfactory".

"Central banks are still hurtling towards more cash-printing," one Hong Kong dealer told newswire Reuters Monday.


"They are under pressure to be doing something actively, which is good for gold."

"Gold has broken through the topside of a large triangle pattern which had resistance at $1655," adds the latest technical analysis from bullion bank Scotia Mocatta.

"The next resistance is the $1790 high from March."

On the gold futures and options market, the so-called speculative net long – defined as the difference between bullish and bearish contracts held by non-bullion industry traders – rose to its highest level since early March last Tuesday, according to weekly figures published each Friday by the Commodity Futures Trading Commission.

Monday morning's AM gold fix in London – which acts as a reference and clearing price for the professional bullion market – put the Euro price of gold at €1341.72 per ounce, the highest Euro fix price since 12 September 2011.

Euro gold prices breached €1340 per ounce on four trading days in September last year, which also saw record-high prices for US Dollar and UK Sterling investors.

Silver meantime hit $31.94 per ounce this morning – its highest level since April – while stock markets edged higher, with the exception of Spain's Ibex.

European Central Bank chief Mario Draghi is due to appear before the European Parliament's Committee on Economic and Monetary Affairs Monday to discuss the creation of a so-called banking union among Eurozone members.

The European Commission last week said it will recommend giving the ECB supervisory powers over all Eurozone banks, of which there are approximately 6000. German finance minister Wolfgang Schaeuble has argued that only the largest banks should be subject to a supranational regulator.

"If the German position prevails," writes Wolfgang Munchau in the Financial Times, "the project of a banking union will have irrevocably failed...the Eurozone will remain a monetary union with nationally supervised and crisis-prone banks for the foreseeable future."

The ECB should give a "credible signal" to markets that it will do what is necessary to contain sovereign borrowing costs when it makes its latest policy announcement this Thursday, the head of the Organisation for Economic Cooperation and Development Angel Gurria said Sunday.

"The ECB is the bazooka, the firepower, the muscle, the one that has the capacity to impress upon the markets and say: yes we will," said Gurria.

The ECB has faced opposition to the idea of bond market intervention from some German policymakers, while it was reported last week that Bundesbank chief Jens Weidmann has considered resigning.

Draghi responded last week by insisting that "exceptional measures" may be required to fulfill the ECB's mandate.

"Draghi's announcement of intervention shows the robust will of the ECB to solve the problem," said Spanish prime minister Mariano Rajoy in a press interview published over the weekend.

Benchmark yields on Spanish 10-Year bonds fell as low as 6.2% last month, having hit a Euro-era high of 7.7% in July, although they have crept higher since, hitting 6.9% this morning.

"The market is expecting a lot from the ECB," says Bank of America Merrill Lynch economist Gustavo Reis.

"However, we [expect] little clarification on the bond-buying program. The likely market disappointment should intensify the pressure on Spain."

Spain's manufacturing sector, continued to contract last month, though at a slower rate than in July, according to purchasing managers index data published Monday.

PMI data for German manufacturing also suggest the sector shrank at a slower rate last month. The opposite was true for the Eurozone as a whole however, with manufacturing activity falling at a faster rate in August than a month earlier, according to PMI data.

Over in China, one of the world's top two gold buying nations, official August PMI data published Saturday indicate reduced manufacturing activity for the first time since last November. HSBC's alternative PMI measure, which focuses on smaller firms, also suggested manufacturing contracted last month.

Sales of gold coins by the US Mint meantime recorded their worst August since 2007, US Mint data show.

In South Africa, around 12,000 miners have been on strike since Wednesday at the KDC Gold Mine, operated by South African-listed Gold Fields.

"It appears that the strike is the result of an internal dispute between the local branch leadership of the National Union of Mineworkers and certain employee groupings within the NUM membership, who are demanding the resignation and replacement of local NUM branch office bearers," says a statement from Gold Fields.

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.


© 2005-2014 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

Free Report - Financial Markets 2014