Best of the Week
Most Popular
1.BrExit Looks Set to Win EU Referendum, Final Opinion Polls Give LEAVE Lead Over REMAIN - Nadeem_Walayat
2.BrExit Morning - New Dawn for Britain, Independence Day! - Nadeem_Walayat
3.LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - Nadeem_Walayat
4.BrExit to Save Europe from Climate Change Refugee Migration Apocalypse - Nadeem_Walayat
5.Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - Nadeem_Walayat
6.EU Referendum Latest Opinion Polls Show LEAVE Halting REMAINs Surge - Nadeem_Walayat
7.Gold And Silver – Insanity Is World “Norm.” Keep Stacking! - Michael_Noonan
8.Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - Nadeem_Walayat
9.Gold And Silver: Security, And BREXIT - Michael_Noonan
10.BrExit Vote - "The Trend is Set" -- And What You Should Pay Attention to Next - EWI
Free Silver
Last 7 days
Stock Market Rally Runs Out of Steam - 29th June 16
Rapid Growth:The Financial Trends Of Online Gaming - 29th June 16
FTSE and Sterling Brexit Trading, Deconstruction of the EU Referendum Result - 29th June 16
Stock Market Bounce May be Over - 28th June 16
Stock Market Meltdown Likely to Drive Gold Towards $1,500 - 28th June 16
Brexit Victory over the EU Globalists - 28th June 16
Brexit Psyop: Greenspan Falsely Blames the Brits for the Crash and Chaos to Follow - 28th June 16
Greenspan Calls Brexit a ‘Terrible Outcome’ as Euro Area Tested - 27th June 16
Stock Market SPX Below Mid-Cycle Support - 27th June 16
Best Holidays for Summer 2016 - 27th June 16
Another Stocks Bear Market? - 27th June 16
BBC EU Referendum Result Highlights - YouGov, Markets, Bookmakers, Pollsters ALL WRONG! - 26th June 16
Investors Map Post-Brexit Strategies Amid Global Market Upheaval - 26th June 16
Gold Price Weekly COT Update - 26th June 16
First the UK, then Scotland ... then Texas? - 26th June 16
Stocks Bear Market Resumes or Just More Noise - 26th June 16
Gold And Silver: Security, And BREXIT - 25th June 16
Dow, Euro & Brexit Recap - 25th June 16
Resistance Holding Gold Stocks after Brexit - 25th June 16
Venezuela vs. Ecuador (Chavismo vs. Chavismo Dollarized) - 25th June 16
Gold, Silver And PM Stocks Summer Doldrums Risk - 24th June 16
Here’s Why China “Economic Hard-Landing” Worries Are Overblown - 24th June 16
Jubilee Jolt: Markets Crash, Gold Skyrockets as Britain Takes Brexit - 24th June 16
BrExit Morning - New Dawn for Britain, Independence Day! - 24th June 16
LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - 24th June 16
Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - 24th June 16
EU Referendum Shock Results Putting BrExit LEAVE in the Lead Hitting Sterling Hard - 24th June 16
Final Opinion Poll Gives REMAIN 52% Lead, Bookmakers, Markets and Pollsters ALL Back REMAIN Win - 23rd June 16
Does BREXIT Matter? Outlook for Sterling - 23rd June 16
Keep Calm and Vote BrExit - Last Chance to Break Free of EU Superstate - 23rd June 16
Here’s the Foreign Policy Trump and Clinton Really Want - 23rd June 16
Details Behind Semiconductor Stocks Leadership - 23rd June 16
Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - 23rd June 16
BrExit Looks Set to Win EU Referendum, Final Opinion Polls Give LEAVE Lead Over REMAIN - 22nd June 16
Proof that the Gold Bears are Wrong - 22nd June 16
Here’s a Trillion-Dollar Investment Opportunity for Those Few with No Debt - 22nd June 16
BrExit to Save Europe from Climate Change Refugee Migration Apocalypse - 22nd June 16
Increase In U.S. Rig Count Will Not Cap Oil Prices - 22nd June 16
Are Copper and China Stocks Set to Rally? - 22nd June 16
SPX May Break Its Trendline - 22nd June 16
Believe it or Not: More Kids Live At Home Now than Since The Great Depression - 21st June 16
EU Referendum Latest Opinion Polls Show LEAVE Halting REMAINs Surge - 21st June 16
British Pound Outlook - BREXIT, Europe and You - Does your vote matter? - 21st June 16
Fascist Victory Behind the European Union - 21st June 16
EU Referendum Opinion Polls Analysis Shows Strong Momentum in REMAINs Favour - 21st June 16
Is It Time to Dump Gold and Buy Platinum? - 21st June 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Market Volaility

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

Catching a Falling Financial Knife