Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
New Profit Points in the Shifting Balance of Power, Welcome to Saudi America - 24th Oct 14
QE Failure & Folly Of Paper Mache, Treasury Bond Integrated Lifeline Patches - 24th Oct 14
U.S. Economy Faltering Momentum, Debt and Asset Bubbles - 23rd Oct 14
Annuities - Afraid Your Money Will Vanish before You Do? - 23rd Oct 14
What Debt Deleveraging? - 23rd Oct 14
How to Profit from Massive Spin-Offs with Just One Play - 23rd Oct 14
Evaluating Ebola as a Biological Weapon - 23rd Oct 14
Euro, USD, Gold and Stocks According to Chartology - 23rd Oct 14
Why You Should Always Be Invested in the Stock Market (Even Now) - 23rd Oct 14
Five U.S. Housing Market Warning Signs Point to Real Estate Market Downturn - 23rd Oct 14
The Better Short: Gold or Silver? - 23rd Oct 14
Focus on Graphite Companies with Green Energy and Technology Strategies - 22nd Oct 14
Crude Oil Price Hitting Bottom - 22nd Oct 14
Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - 22nd Oct 14
Gold Or Crushing Paper Debt Stocks Crash? - 22nd Oct 14
India Gold Demand Surges 450% and Bank of Russia Demand At 15 Year High - 22nd Oct 14
Bitcoin Stock Exchange Could Be "More Valuable than Alibaba" - 22nd Oct 14
Currency War - How to Profit from a Stronger U.S. Dollar - 22nd Oct 14
Banks Hold Treasuries and Make Loans- 22nd Oct 14
Gold and Silver Timing is Everything - 22nd Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VII) - 22nd Oct 14
Follow the Baby Boom to Biotech Stock Profits - 22nd Oct 14
Copper, Nickel and Zinc Won't Be Cheap for Long - 22nd Oct 14
How Will We Know That the Gold & Silver Price Bottom Is In? - 21st Oct 14
Is Gold as Dead as Florida Hurricanes? - 21st Oct 14
First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45% - 21st Oct 14
The Similarities Between Germany and China - 21st Oct 14
The REAL Reason Why the Stock Market Turned Down - 21st Oct 14
Petrobras is a 'Scheme, Not a Stock' - 21st Oct 14
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

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