Best of the Week
Most Popular
1.Scottish Independence YES Vote Panic - Scotland Committing Suicide and Terminating the UK? - Nadeem_Walayat
2.Independent Scotland Will Disintegrate as Unionist Regions Demand Referendum's to Rejoin UK - Nadeem_Walayat
3.Bank of England Panic! Scottish Independence Bank Run Already Underway! - Nadeem_Walayat
4.Gold and Silver Price Ready To Go BOOM - Austin_Galt
5.Gold and Silver Potential Price Meltdown Scenario - Rambus_Chartology
6.Scottish Independence UK Catastrophe - The Balkanisation of Britain - Video - Nadeem_Walayat
7.The Price Of Gold And The Art Of War Part I - Darryl_R_Schoon
8.Main Reason Why Scotland Will Vote NO to Independence, 70% Probability - Nadeem_Walayat
9.Heavy Gold and Silver Shorting is Bullish - Zeal_LLC
10.10 Year U.S. Treasury Short Best Place to be Remainder of 2014 - EconMatters
Last 5 days
Gold Report - U.S. National Debt Surges $1 Trillion In Just 12 Months - 17th Sept 14
How to Find Trading Opportunities in ANY Market Using Fibonacci Analysis - 17th Sept 14
Why Money Is Worse Than Debt - 17th Sept 14
Can Gold Price Finally Recover? - 17th Sept 14
Scotland Independence - Europe Holds Its Breath - 17th Sept 14
The Energy Prices at Risk with Scottish Independence - 17th Sept 14
Scottish Independence SNP Lies on NHS, Economy, Debt, Oil and Currency - 17th Sept 14
The Truth Behind the Dangerous "Helicopter Money" Delusion - 16th Sept 14
Central Bank Balance Bullying: Investor Implications - 16th Sept 14
U.S. Dollar and Gold Elliott Wave Projection - 16th Sept 14
The Origins and Implications of the Scottish Referendum - 16th Sept 14
The Collapse Of U.S. Silver Stocks As Public Debt Skyrockets - 16th Sept 14
Emerging Markets Are Set Up for a Crisis, What’s on Your Radar Screen? - 16th Sept 14
Scottish Independence Bank Run Already Underway - Video - 16th Sept 14
The Emergence of the US Petro-Dollar - 16th Sept 14
Economic GDP Drives Stock Prices Inestment Myth - 16th Sept 14
Don't Miss This Gold Buying Opportunity - 16th Sept 14
Why ECB QE Is Bearish For Gold Prices - 15th Sept 14
Property Rights and Property Taxes—and Countries That Don’t Have Them - 15th Sept 14
Junior Miners Breaking Out Higher Forecasting Gold and Silver Price Bottom? - 15th Sept 14
Stock Market Patiently Waiting for Mean Reversion - 15th Sept 14
A Closer Look at the US Dollar - 15th Sept 14
The Silver Price Sentiment Cycle - 15th Sept 14
Stock Market Correction Underway - 15th Sept 14
Marc Faber - “I Want To Be Diversified, I Want To Own Some Gold” - 15th Sept 14
The Myth of Nuclear Weapons - 15th Sept 14
US Dollar Forecast to Go Much Higher - 15th Sept 14
Analysis And Price Projection Of The Uranium Market - 15th Sept 14
Bank of England Panic! Scottish Independence Bank Run Already Underway! - 15th Sept 14
The Ethics of Entrepreneurship and Profit - 14th Sept 14
The Big Investor Opportunity in the Orbital Space Junkyard - 14th Sept 14
Kohl's and The Rest of The Retailers are in Deep Doo Doo - 14th Sept 14
Independent Scotland Will Disintegrate as Unionist Regions Demand Referendum's to Rejoin UK - 14th Sept 14
Stock Market Pullback Continues - 13th Sept 14
SNP Fanatics Warn of Day of Reckoning for Scottish Independence No Campaigners - 13th Sept 14
Scottish Independence Would Shake Up the Global System - 13th Sept 14
The World Order Becomes Disorder - 13th Sept 14
Is Geothermal Power About to Become The Next Great Battleground Over Fracking? - 12th Sept 14
Heavy Gold and Silver Shorting is Bullish - 12th Sept 14
Strong U.S. Dollar Undermines Gold and Silver - 12th Sept 14
Debt And The Decline Of Money - 12th Sept 14
Panic On The Streets Of London ... Can Scotland Ever Be The Same Again? - 12th Sept 14
Will The Real Silver Commercials Stand Up? - 12th Sept 14
If You Own Only One Investment, Make Sure This Is It - 12th Sept 14
Main Reason Why Scotland Will Vote NO to Independence, 70% Probability - 12th Sept 14
Better Days Ahead For U.S. Stock And Housing Market - 12th Sept 14
U.S. Meddling Dims Prospects for Ukraine Peace - 12th Sept 14
Is the Fed Preparing to Asset-Strip Local Governments? - 12th Sept 14
China Holds “Gold Congress” - Positioning Itself As Global Gold Hub - 11th Sept 14
Fire Ice Could be Energy's Magic Bullet or a Planet-killing Catastrophe - 11th Sept 14
The Mass Psychosis Of 9 /11 Will Never Be Healed - 11th Sept 14
Radical Islam's Crisis of Competing Caliphates - 11th Sept 14
Ukraine Crisis And Self-Determination - 11th Sept 14
Cameron and Miliband Desperately Attempt to Prevent Scotland Committing Suicide - 11th Sept 14
A Supply Crunch Points to Higher Uranium Prices - 11th Sept 14
The Myanmar Shadow - 11th Sept 14
Europe Takes the QE Baton - 11th Sept 14
Full Frontal Inflation - 11th Sept 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Huge Stocks Bear Market

Eurozone Enters Recession, Worldwide Gold Demand Down in Q3

Commodities / Gold and Silver 2012 Nov 15, 2012 - 09:38 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleTHE DOLLAR gold price drifted lower to $1720 an ounce during Thursday morning's London session, around ten Dollars down on the week, as stocks and the Euro also drifted lower following the release of weak economic growth data from the Eurozone.

The silver price dropped below $32.60 an ounce, more-or-less exactly where it started the week, while other industrial commodities edged higher.


"We like the price action of silver and think there is a good chance of another leg up," says the latest technical analysis from bullion bank Scotiabank.

Prices for longer dated US Treasury bonds meantime ticked lower this morning, as did prices for German bunds, while longer-dated UK gilts saw gains.

The Eurozone fell into recession in Q3, according to official gross domestic product data published Thursday.

Eurozone GDP shrank 0.1% from Q2, a 0.6% year-on-year drop. Germany and France both grew 0.2% quarter-on-quarter, while Italy's economy shrank by 0.2%. Spain's economy also contracted, shrinking 0.3% in the three months to end September, while in the Netherland GDP fell by 1.1% during Q3.

Eurozone inflation meantime fell to 2.5% in October, down from 2.6% a month earlier, consumer price index figures published by Eurostat show.

The European Central Bank's Outright Monetary Transactions program, under which the ECB proposes to buy sovereign debt in the secondary market, "will not lead to inflation", ECB president Mario Draghi told an audience at the Università Bocconi in Milan this morning.

"For every Euro we inject, we will withdraw a Euro," said Draghi.

"In our assessment, the greater risk to price stability currently is associated with the possibility of falling prices in some Euro area countries."

Federal Reserve policymakers meantime discussed the use of using quantitative economic thresholds to communicate their outlook on policy when they met last month, minutes from the Federal Open Market Committee published Wednesday show.

The Fed has said it will buy $40 billion of mortgage backed securities a month until there is a "substantial improvement" in the US labor market, although it has not defined what that means. The Fed is also due to continue with its maturity program known as Operation Twist, which attempts to 'flatten' the yield curve for US Treasury bonds, until it expires at the end of this year.

"Looking ahead," the FOMC minutes say, "a number of participants indicated that additional asset purchases would likely be appropriate next year after the conclusion of the maturity extension program in order to achieve a substantial improvement in the labor market."

Global gold demand fell 11% in the third quarter compared to the same period last year – an all-time record quarter –although it was up 10% from Q2 this year, according to the latest Gold Demand Trends published by the World Gold Council Thursday.

Demand from India, traditionally the world's largest market, was up 9% compared to Q3 2011.
"The strong year-on-year performance was partly reflective of price expectations among Indian consumers," the report says, noting that the Rupee gold price rose to hit new records towards the end of the quarter.

"This fed expectations of further price rises," the report adds, "which – in a slight departure from historical precedent...encouraged consumers to buy into the rising trend."

The value of the Rupee measured against the Dollar was on average 20% lower in Q3 2012 than over the corresponding period last year.

In contrast with India, Q3 gold bullion demand from world number two China was down 8% year-on-year, with investment demand for gold bars and coins down 12%.

"The preference among Chinese to buy into a clear rising price largely explains the drop in investment demand, as range bound price action during July and much of August curbed demand," the Gold Demand Trends report says, adding that slower economic growth also "had a negative impact on consumer sentiment".

"Since the Chinese economy has stabilized following its poor third-quarter growth," a note from Commerzbank says, "Chinese gold demand can also be expected to gather pace again."

Central banks meantime bought 97.6 tonnes of gold bullion during the third quarter, according to the report, which adds that in six of the last seven quarters central bank demand has been around 100 tonnes.

"Gold is beginning to re-establish itself as part of the fabric of the financial system," says Marcus Grubb, managing director, investment at the World Gold Council.

"Against a backdrop of continued global economic uncertainty and elections in China and the US, it is clear from five year rising demand trends that gold's fundamental property as a vehicle for capital preservation continues to endure, as evidenced by this quarter’s increase in global ETF investment, up 56% and continued purchasing by central banks, the ultimate long term investors."

On the supply side, gold mining production was down 1% year-on-year in Q3, according to Gold Demand Trends. The chief executive of world's largest gold producer Barrick said this week that new gold deposits are being found at a declining rate, despite record exploration spending.

Overall supply down 2% following a reduction in the amount of gold being recycled in industrialized nations. US gold recycling firm Cash4Gold filed for bankruptcy in July.

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