Best of the Week
Most Popular
1.The Gallery of Crowd Behavior: Goodbye Stock Market All Time Highs - Doug_Wakefieldth
2.Tesco Meltdown Debt Default Risk Could Trigger a Financial Crisis in Early 2015 - Nadeem_Walayat
3.The Trend Every Nation on Earth Is Pouring Money Into - Keith Fitz-Gerald
4.Do Tumbling Buybacks Signal Another Stock Market Crash? - 26Mike_Whitney
5.Could Tesco Go Bust? How to Save Tesco from Debt Bankruptcy Risk - Nadeem_Walayat
6.Gold And Silver Price - Respect The Trend But Prepare For A Reversal - Michael_Noonan
7.U.S. Economy Faltering Momentum, Debt and Asset Bubbles - Lacy Hunt
8.Bullish Silver Stealth Buying - Zeal_LLC
9.Euro, USD, Gold and Stocks According to Chartology - Rambus_Chartology
10.Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - EWI
Last 5 days
Pretium - Canadian Golden Elephant - 31st Oct 14
What USA Today Got Wrong About the Stock Market Fear Gauge - 31st Oct 14
Election Result - Labour Wins South Yorkshire Police and Crime Commissioner - 31st Oct 14
Gold Price Falls, Stocks Record Highs as Japan Goes ‘Weimar’ - 31st Oct 14
EUR/USD - Double Bottom Or New Lows? - 31st Oct 14
More Downside Ahead for Gold and Silver - 31st Oct 14
QE Is Dead, Now You Tell Me What You Know - 31st Oct 14
Welcome to the World of Volatility - 31st Oct 14
Stocks Bear Market Crash Towards New All Time Highs as QE3 End Awaits QE4 Start - 31st Oct 14
US Mortgages, Risky Bisiness "Easy Money" - 30th Oct 14
Gold, Silver and Currency Wars - 30th Oct 14
How to Recognize a Stock Market “Bear Raid” on Wall Street - 30th Oct 14
U.S. Midterm Elections: Would a Republican Win Be Bullish for the Stock Market? - 30th Oct 14
Stock Market S&P Index MAP Wave Analysis Forecast - 30th Oct 14
Gold Price Declines Once Again As Expected - 30th Oct 14
Depression and the Economy of a Country - 30th Oct 14
Fed Ends QE? Greenspan Says Gold “Measurably” “Higher” In 5 Years - 30th Oct 14
Apocalypse Now Or Nirvana Next Week? - 30th Oct 14
Understanding Gold's Massive Impact on Fed Maneuvering - 30th Oct 14
Europe: Building a Banking Union - 30th Oct 14
The Colder War: How the Global Energy Trade Slipped From America's Grasp - 30th Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VIII) - 29th Oct 14
Flock of Black Swans Points to Imminent Stock Market Crash - 29th Oct 14
Bank of America's Mortgage Headaches - 29th Oct 14
Risk Management - Why I Run “Ultimate Trailing Stops” on All My Investments - 29th Oct 14
As the Eurozone Economy Stalls, China Cuts the Red Tape - 29th Oct 14
Stock Market Bubble Goes Pop - 29th Oct 14
Gold's Obituary - 29th Oct 14
A Medical Breakthrough Creating Stock Profits - 29th Oct 14
Greenspan: Gold Price Will Rise - 29th Oct 14
The Most Important Stock Market Chart on the Planet - 29th Oct 14
Mysterious Death od CEO Who Went Against the Petrodollar - 29th Oct 14
Hillary Clinton Could Be One of the Best U.S. Presidents Ever - 29th Oct 14
The Worst Advice Wall Street Ever Gave - 29th Oct 14
Bitcoin Price Narrow Range, Might Not Be for Long - 29th Oct 14
UKIP South Yorkshire PCC Election Win is Just Not Going to Happen - 29th Oct 14
Evidence of New U.S. Housing Market Real Estate Bust Starting to Appear - 28th Oct 14
Principle, Rigor and Execution Matter in U.S. Foreign Policy - 28th Oct 14
This Little Piggy Bent The Market - 28th Oct 14
Global Housing Markets - Don’t Buy A Home, You’ll Get Burned! - 28th Oct 14
U.S. Economic Snapshot - Strong Dollar Eating into corporate Profits - 28th Oct 14
Oliver Gross Says Peak Gold Is Here to Stay - 28th Oct 14
The Hedge Fund Rich List Infographic - 28th Oct 14
Does Gold Price Always Respond to Real Interest Rates? - 28th Oct 14
When Will Central Bank Morons Ever Learn? asks Albert Edwards at Societe General - 28th Oct 14
Functional Economics - Getting Your House in Order - 28th Oct 14
Humanity Accelerating to What Exactly? - 27th Oct 14
A Scary Story for Emerging Markets - 27th Oct 14
Could Tesco Go Bust? How to Save Tesco from Debt Bankruptcy Risk - 27th Oct 14
Europe Redefines Bank Stress Tests - 27th Oct 14
Stock Market Intermediate Correction Underway - 27th Oct 14
Why Do Banks Want Our Deposits? Hint: It’s Not to Make Loans - 26th Oct 14
Obamacare Is Not a Revolution, It Is Mere Evolution - 26th Oct 14
Do Tumbling Buybacks Signal Another Stock Market Crash? - 26th Oct 14
Has the FTSE Stock Market Index Put in a Major Top? - 26th Oct 14
Christmas In October – Desperate Measures - 26th Oct 14
Stock Market Primary IV Continues - 26th Oct 14
Gold And Silver Price - Respect The Trend But Prepare For A Reversal - 25th Oct 14
Ebola Has Nothing To Do With The Stock Market - 25th Oct 14
The Gallery of Crowd Behavior: Goodbye Stock Market All Time Highs - 25th Oct 14
Japanese Style Deflation Coming? Where? Fed Falling Behind the Curve? Which Way? - 25th Oct 14
Gold Price Rebounds but Gold Miners Struggle - 25th Oct 14
Stock Market Buy the Dip or Sell the Rally - 25th Oct 14
Get Ready for “Stupid Cheap” Stock Prices - 25th Oct 14
The Trend Every Nation on Earth Is Pouring Money Into - 25th Oct 14 - Keith Fitz-Gerald
Bitcoin Price Decline Stopped, Possibly Temporarily - 25th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

Gold Being Liquidated for Cash as Stock Markets Fall Ahead of Fiscal Cliff Negotiations

Commodities / Gold and Silver 2012 Nov 16, 2012 - 07:23 AM GMT

By: Ben_Traynor

Commodities

Best Financial Markets Analysis ArticleWHOLESALE gold bullion prices fell below $1710 an ounce Friday morning in London, dropping below that level for the second day in a row, as stocks, commodities and the Euro all fell and US Treasuries gained ahead of negotiations among US lawmakers about the so-called fiscal cliff.


"Gold is being seen increasingly as a source of cash," says Simon Weeks, head of precious metals at bullion bank Scotia Mocatta.

"Liquidation of gold can cover losses elsewhere."

Silver bullion meantime fell to $32.19 an ounce.

On the currency markets, the US Dollar Index, which measures the Dollar's strength against other major currencies, touched a 10-week high as the Euro's recent rally stalled.

Heading into the weekend, gold bullion looked set for a 1.2% weekly loss by Friday lunchtime in London, while silver was down 1.3%.

President Obama is due to meet congressional leaders later today for negotiations on the so-called fiscal cliff due at the start of next year. Tax cuts made by former president George W Bush are due to expire on December 31, while spending cuts for the military and social programs are currently scheduled for January as a result of a deficit deal agreed last year.

Lawmakers are negotiating on how to reduce the federal deficit over the next deficit; failure to agree a deal would see the tax cut expiries and spending cuts occur as scheduled.

"[Obama] will not sign, under any circumstances, an extension of tax cuts for the top 2% of American earners," White House spokesman Jay Carney said Thursday, a day after President Obama suggested taxes should be raised for the wealthy to reduce the deficit.

"What we won't do is raise tax rates," countered Republican Senate leader Mitch McConnell, who will be at today's talks.

Ratings agency Standard & Poor's stripped the US of its AAA credit rating in August 2011, after weeks of negotiations on raising the so-called 'debt ceiling' for federal debt.

"The [US credit] rating is in the hands of policymakers," says John Chambers, chairman of S&P's sovereign rating committee.

"If no budget deal is reached in the early part of next year and the debt trajectory just continues to rise," adds Bart Oosterveld at fellow ratings agency Moody's, "then we'd be looking at a downgrade of a notch to Aa1."

Aa1 is the second-highest Moody's rating after Aaa.

"If we don't see an agreement and there is a gridlock, it will burden the Dollar and benefit gold," reckons Dominic Schnider at UBS Wealth Management.

The UK government is unlikely to end its ownership of Royal Bank of Scotland and Lloyds "any time soon", according to a report published by parliament's Public Accounts Committee.

"The £66 billion cash spent purchasing shares in RBS and Lloyds may never be recovered," the report on the sale of Northern Rock says.

"The low level of competition [to buy Northern Rock assets] does not give us confidence that the taxpayer will make a profit on the sale of RBS or Lloyds... it seems inevitable that their 'temporary public ownership' will last for some time, if getting value for our investment remains the most important objective for government. "

By contrast, the US Treasury Department said earlier this year that it expects to make a $2 billion profit on the stakes it bought in US banks during the 2008 crisis.

The volume of gold bullion held to back shares in the SPDR Gold Trust (GLD), the world's largest gold ETF, rose to within 0.07% of its all-time high yesterday, rising to 1339.6 tonnes during Thursday's US trading.

Soros Fund Management increased its investment in the GLD by 49% to 1.32 million shares during the third quarter, according to the fund's 13F filing with Securities and Exchange Commission. Hedge fund Paulson & Co., the GLD's biggest investor, maintained its stake at 21.8 million shares.

In its quarterly Gold Demand Trends published yesterday, the World Gold Council notes that notes that gold investment through exchange traded funds was strong in Q3, in contrast with demand in many markets for gold coins and bars.

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