Best of the Week
Most Popular
1.UK Interest Rates, Economy GDP Forecasts 2016 and 2017 - Nadeem_Walayat
2.How Far Can Gold Price Go? - Bob_Kirtley
3.If You Miss Buying Gold – You Will Regret, it Later - Chris_Vermeulen
4.US Dollar Double Top, Gold Prospects Brightening Rapidly - Clive_Maund
5.Gold Price, Mining Stocks Rocket Higher - Zeal_LLC
6.US Economy Slides One Step Further Towards A Recession - Dr_David_J_Harris
7.Stock Market S&P, NAS Best, Most Reliable Answers Come From The Market And You - Michael_Noonan
8.UK Interest Rates, Economy Forecasts 2016 and 2017 - Video - Nadeem_Walayat
9.David Cameron Humiliated in Poland Over Refusal to Stop Taking UK Benefits, BrExit or Super State? - Nadeem_Walayat
10.2016 - Gold & Silver Rising: A Gold And Silver Bottom May Be In - Darryl_R_Schoon
Last 5 days
France CAC40 Stock Market Technical Outlook - 13th Feb 16
Potential Stocks Bear Market Uptrend Underway - 13th Feb 16
HUI Gold Stocks …Meet Me at The Bottomz Inn ? - 13th Feb 16
Is This the Debt Bubbles Last Rattle? - 12th Feb 16
Gold Stocks Upside Targets - 12th Feb 16
Stock Market Observations - 12th Feb 16
Will Capital Controls Return? - 12th Feb 16
Gold, Gold Stocks, and the End Game - 12th Feb 16
Canadian Dollar Now Even Less of a Haven from US Dollar Collapse Than Before - 12th Feb 16
The Stock Market Dow Elevator; 18, 17, 16.... - 12th Feb 16
Will Harry Dent Eat Crow on His $700 Gold Price Prediction? - 12th Feb 16
Where to Hide Your Money From Reckless Governments - 12th Feb 16
The War on Cash is About to Go into Hyperdrive - 11th Feb 16
More Bankruptcy For Your Retirement Portfolio - 11th Feb 16
2016 - Gold & Silver Rising: A Gold And Silver Bottom May Be In - 11th Feb 16
Gain Trading Confidence by Improving Your Elliott Wave Analysis Skills - Video - 11th Feb 16
With A Gloomy Start To 2016, A Bust Seems Just Around The Corner - 11th Feb 16
UK Interest Rates, Economy Forecasts 2016 and 2017 - Video - 10th Feb 16
World Markets Are in Sync - 10th Feb 16
If You Miss Buying Gold – You Will Regret, it Later - 10th Feb 16
The Fed Doesn't have a Clue! - 10th Feb 16
How Far Can Gold Price Go? - 10th Feb 16
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

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Global Financial Crisis 2016

Gold Weak Despite Japan to Print and Spend to Infinity

Commodities / Gold and Silver 2012 Dec 17, 2012 - 07:39 AM GMT

By: Ben_Traynor

Commodities

THE WHOLESALE gold bullion price rose to $1693 per ounce during Monday morning's London trading, but remained slightly below where it ended last week following falls in Asia, where the Yen opened sharply lower against the Dollar before recovering some ground following the result of Japan's general election.

"Gold is continuing to trade below the psychologically important threshold of $1700," says a note from Commerzbank.


"There are signs that the current price weakness is not sustainable, however, and we envisage prices climbing significantly again in the medium term."

Silver meantime hovered around $32.20 an ounce this morning, a few cents off Friday's close, while stocks and commodities were little changed on the day.

"Participation is really low right now," one Hong Kong trader told newswire Reuters this morning.

"It hasn't been a very exciting year for most people and I don't think they want to stick around for the last week and a half. People want to put away everything before starting on a totally clean slate in 2013."

"For 2013 we expect principally similar supporting factors [for gold] as in 2012," says a note from refiner Heraeus.

"Low interest rates, monetary policy measures by central banks, fear of inflation, purchases by central banks, recovered demand from India as well as increasing demand from China."

Over in Japan, the Liberal Democratic Party won Sunday's general election, gaining a so-called supermajority of two-thirds of the lower house of parliament, which will allow it to block decisions made by the upper house.

"The LDP's landslide election victory gives it a virtually free hand in policy," says Robert Feldman, head of Japan economic research at Morgan Stanley MUFG Securities.

"The macro[economic] stance will shift to 'print and spend.'"

During the election campaign LDP leader Shinzo Abe, who will now become Japan's prime minister for the second time, called on the central bank to adopt an "unlimited" Yen policy to fight deflation.

"It is very unusual for monetary policy to be a focus of attention in an election," Abe said Monday following his victory.

"But there was strong public support for our calls to beat deflation...I hope the Bank of Japan takes that into account."

BoJ policymakers meet on Wednesday and Thursday this week to discuss the latest monetary policy decision. Abe said that after he has formed his cabinet next week, his government will issue a joint statement with the BoJ which will include a 2% inflation target for the central bank – double the current target.

In Washington meantime, Republican House of Representatives speaker John Boehner has said he will consider raising tax rates for people earning more than $1 million a year. President Obama has said he wants the income threshold for higher taxes to be lower, at $250,000 a year.

Boehner has also offered to remove the subject of the debt ceiling from the debate for a year, according to US press reports Sunday.

The US government is expected to hit the current $16.4 trillion debt limit in early February next year. In August last year, ratings agency Standard & Poor's stripped the US of its AAA credit rating after negotiations to raise the previous limit continued without agreement until the limit was hit.

The ongoing lack of agreement on the fiscal cliff "will likely leave investors somewhat at a loss as to what they can expect heading into the year-end," says Edward Meir, precious metals analyst at brokerage INTL FCStone.

"At this stage of the game, we would welcome a broad multi-market retrenchment over the course of this week, as it may finally nudge the politicians towards a badly-needed compromise. However, should we get a sell-off, we suspect gold will be caught up in the resulting downdraft."

The difference between bullish and bearish contracts held by Comex gold futures and options traders – known as the speculative net long – gained slightly in the week ended last Tuesday, weekly data from the Commodity Futures Trading Commission show.

The data do not however cover gold's price drop that began Wednesday last week.

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.

Ben Traynor Archive

© 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