Best of the Week
Most Popular
1.Oil Wars 2016 - US vs Russia vs Saudi Arabia vs Iran - Nadeem_Walayat
2.Crude Oil Price Crash Triggering Global Instability, Trend Forecast 2016 - Nadeem_Walayat
3.Stock Market Crash - Last Week was The 2nd and Final Warning... - Clive_Maund
4.Stock Market Crash Apocalypse or Bull Market Severe Correction? - Nadeem_Walayat
5.TShipping Said to Have Ceased… Is the Worldwide Economy Grinding to a Halt? - Jeff_Berwick
6.Crude Oil Price Crash Catastrophe, Independant Scotland Literally Begging to Rejoin the UK - Nadeem_Walayat
7.Summers: Global Economy Can't Withstand Four 2016 Fed Hikes - Bloomberg
8.Gold And Silver: New World Order: Public Be Damned, Preferably Dead - Michael_Noonan
9.Rigged U.S. Ttreasury Bond Market Double Barreled Hidden Q.E. To Infinity - Jim_Willie_CB
10.Major Stocks Bear Market Awakening - Zeal_LLC
Last 5 days
It's Stock Market Panic Time! - 9th Feb 16
Gold Stocks Picks for Patient Pickers - 9th Feb 16
Oil Price Collapse U.S. Recession Odds 2016 - 9th Feb 16
Preparing for Crisis - It's About Risk Mitigation and Capital Preservation - 9th Feb 16
Top Silver Mining CEO: Don't Laugh, We Could See Silver $100+ - 8th Feb 16
Gold, Investment Leadership Changes Permanent? - 8th Feb 16
Stock Market Panic Decline Begins... - 8th Feb 16
How to Save Money By Growing Your Own Homegrown Tomatoes Indoors From Seeds - 8th Feb 16
US Economy Slides One Step Further Towards A Recession - 8th Feb 16
Gold Bear Market Bottom : Mr. Bear has left the PM Sector for Greener Pastures - 8th Feb 16
Stock Market At Important Support - 8th Feb 16
David Cameron Humiliated in Poland Over Refusal to Stop Taking UK Benefits, BrExit or Super State? - 8th Feb 16
Why Crude Oil Prices Could Continue FALLING From Here - 7th Feb 16
Stock Market S&P, NAS Best, Most Reliable Answers Come From The Market And You - 7th Feb 16
Stocks Bear Market Continues - 7th Feb 16
Silver COT Paving Way for Sustained Upside Breakout Sharp Rally - 7th Feb 16
US Dollar Double Top, Gold Prospects Brightening Rapidly - 7th Feb 16
Gold And Silver - Is A Bottom In? Nothing Confirmed - 7th Feb 16
Gold Stocks Something has Changed - 6th Feb 16
UK Interest Rates, Economy GDP Forecasts 2016 and 2017 - 6th Feb 16
Gold Price, Mining Stocks Rocket Higher - 5th Feb 16
Crude Oil Price Bottoms and Blues - 5th Feb 16
Gold and Silver: Ripe for a Recovery! China May well Change the Game - 5th Feb 16
How Pension Plans are Responding to Financial Repression - 5th Feb 16
Senior Gold Producer Goldcorp Takes Large Stake in Nevada's Gold Standard Ventures - 5th Feb 16
Tips for Smart Oil and Natural Gas Investing 2016 - 5th Feb 16
Another Corporate Giant Is Leaving the U.S. – What This Means for You - 4th Feb 16
TPP is Economic Warfare, Trade Can Make Everyone Worse Off / Governments are Stupid - 4th Feb 16
Gold and Stock Markets Inflection Points Galore - 4th Feb 16
Putin Cries Dyadya (Uncle), Is Saudi Arabia Listening? - 4th Feb 16
Gold Price Golden Bottom? Video - 4th Feb 16
Look North for Value-Priced Growth in Healthcare Biotech Stocks - 4th Feb 16 - TLSReport
BrExit EU Referendum - Britain's FINAL Chance for Freedom From Emerging European Superstate - 4th Feb 16
HUI Now Confirming Gold Price Move Higher - 4th Feb 16
Crude Oil Price Forecast 2016 As Good As It Gets - 4th Feb 16
Gold and Silver More 'Flight To Safety' Active February - 3rd Feb 16
Raytheon Company: A Defensive Stock for a Defensive Market - 3rd Feb 16
Is Silver Really a Weak Link - 3rd Feb 16
Gold to Beat Stocks 2016? - 3rd Feb 16
David Chamberlain Cameron, Britain's Last Chance for Freedom From Emerging European Super State - 3rd Feb 16
EU UK Draft or Daft Agreement By Donald Tusk to Members of the European Council in Full - 2nd Feb 16
Europe: Why It's Going to Get a Lot Worse Before It Gets Better - 2nd Feb 16
The Next Generational Bust Is Coming, Stock Market 70% Collapse - 2nd Feb 16
The Coming Stock Market Decline May be a Monster - 2nd Feb 16
S&P 500 Has Likely Entered a New Bear Phase - 2nd Feb 16
How and Why To Move Your Assets Offshore Before the Financial Collapse - 2nd Feb 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Global Financial Crisis 2016

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.


© 2005-2016 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

Biggest Debt Bomb in History