Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

US Monetary Policy "Unlikely to Change" Whoever Wins Election, Fiscal Cliff "Could Propel Gold Higher"

Commodities / Gold and Silver 2012 Nov 06, 2012 - 07:10 AM GMT

By: Ben_Traynor


Best Financial Markets Analysis ArticleWHOLESALE MARKET gold prices extended their gains from a day earlier Tuesday, rising above $1690 an ounce in London this morning – 1% up on yesterday's two-month low – while stocks and commodities also ticked higher and US Treasury bonds fell, as voters head to the polls for the US presidential election.

Silver prices climbed to $31.43 an ounce – 2.4% up yesterday's low.

"A Romney victory in the presidential race could push interest rates up," says a note from HSBC, "[while] an Obama re-election could lower them. Lower interest rates historically have helped gold prices and higher rates have been gold-negative."

"Even if Romney wins," adds a note from UBS, "monetary policy in the short-to-medium-term is unlikely to change...[quantitative easing] will remain in place at least for the next fourteen months should subdued growth expectations play out, and gold participants need to bear this in mind."

"Immediately after the election," says HSBC, "the lame-duck Congress and the president will face the question of what to do about the so-called fiscal cliff, the USD530bn in tax increases and USD160bn in spending cuts scheduled to take effect in January 2013...if this issue spills over into January [it] could have important ramifications for gold prices, as uncertainty could propel them higher."

"America is facing an urgent crisis, barely discussed during the fall's election campaign," a group of asset managers and pension funds, led by BlackRock, that was placed in US newspaper advertising Monday.

"Every day we go without a resolution to the fiscal cliff will erode confidence," said BlackRock chief executive Larry Fink.

Workers in Greece meantime have begun a 48 hour strike today, ahead of tomorrow evening's vote on a fresh austerity package that prime minister Antonis Samaras has promised will be "the final one".

Elsewhere in Europe, the services sector in Germany and France continued to contract last month, and at an accelerated rate, according to purchasing managers index data published this morning.

The same was true for the Eurozone as whole. Italy and Spain saw slight improvements in their services PMIs, although both remain below 50 thus indicating ongoing sector contraction.

German factory orders meantime fell by a seasonally adjusted 3.3% in September compared to a month earlier, the biggest month-on-month drop in a year, data published Tuesday by the Bundesbank show.

"Germany's economy is performing better than most of the others in the Euro area, but it won't generate strong growth in the current quarter," says Nick Matthews, senior European economist at Nomura in London.

The volume of gold bullion imported by China from Hong Kong rose 30% in September compared to a month earlier, with gross gold imports hitting 69.71 tonnes, Hong Kong customs data published Monday show. Net imports rose by 54% month-on-month to 41.56 tonnes.

"August was a very weak month, however, which puts the latest increase somewhat into perspective," says today's commodities note from Commerzbank.

If China were to import similar quantities of gold from Hong Kong in the current quarter, this would doubtless lend support to the gold price."

Here in the West, private individuals took advantage of the fall in gold prices to add to their positions during October, the latest Gold Investor Index data published today by online gold and silver exchange BullionVault show.

The Gold Investor Index, which tracks the number of net buyers and sellers of gold on BullionVault over the month, rose to 56.0 last month – up from 52.5 in September, and the highest reading since May. A reading above 50 indicates more net buyers than net sellers. The total amount of gold owned by BullionVault users passed one million ounces last month.

In the US meantime, the volume of gold held to back the world's biggest gold ETF, SPDR Gold Shares (GLD), fell back Monday to 1332.4 tonnes, although it remains within 1% of the all-time high volume hit last month.

In South Africa, gold mining firm Gold Fields has announced the strike at its KDC East Mine has ended, after it reinstated most of the 8100 workers it dismissed last month as part of a deal with the National Union of Mineworkers.

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