Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
The Greatest Investing Lesson Learned from the 1987 Stock Market Crash - 20th Oct 17
Stock Market Time to Go All-in. Short, That Is - 19th Oct 17
How Gold Bullion Protects From Conflict And War - 19th Oct 17
Stock Market Super Cycle Wave C May Have Started - 19th Oct 17
Negative Expectations, Will the Stock Market Correct? - 19th Oct 17
Knowing the Factors Affect your Car Insurance Premium - 19th Oct 17
Getting Your Feet Wet In Crypto Currencies - 19th Oct 17
10 Years Ago Today a Stocks Bear Market Started - 19th Oct 17
1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - 19th Oct 17
Virgin Media Broadband Down, Catastrophic UK Wide Failure! - 19th Oct 17
The Passive Investing Bubble May Trigger A Massive Exodus from Stocks - 18th Oct 17
Gold Is In A Dangerous Spot - 18th Oct 17
History Says Global Debt Levels Will Lead to Another Crisis - 18th Oct 17
Deflation Basics Series: The Quantity Theory of Money - 18th Oct 17
Attractive European Countries for Foreign Investors - 18th Oct 17
Financial Transcription Services – What investors should know about them - 18th Oct 17
Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures - 18th Oct 17
Surge in UK Race Hate Crimes, Micro-Racism, Sheffield, Millhouses Park, Black on Asian - 18th Oct 17
Comfortably Numb: Surviving the Assault on Silver - 17th Oct 17
Are Amey Street Tree Felling's Devaluing Sheffield House Prices? - 17th Oct 17
12 Real-Life Techniques That Will Make You a Better Trader Now - 17th Oct 17
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17
Q4 Pivot View for Stocks and Gold - 14th Oct 17
Gold Mining Stocks Q3’17 Preview - 14th Oct 17
U.S. Mint Gold Coin Sales and VIX Point To Increased Market Volatility and Higher Gold - 14th Oct 17
Yuan and Gold - 14th Oct 17
Tips for Avoiding a Debt Meltdown - 14th Oct 17
Bitcoin Hits New All-Time High Above $5,000 As Lagarde Concedes Defeat and Jamie Demon Shuts Up - 13th Oct 17
Golden Age for GOLD, Dark Age for the Stock Market - 13th Oct 17
The Struggle for Bolivia Is About to Begin - 13th Oct 17
3 Reasons to Take Your Invoicing Process Mobile - 13th Oct 17
What Happens When Amey Fells All of a Streets Trees (Sheffield Tree Fellings) - Video - 13th Oct 17
Stock Market Charts Show Smart Money And Dumb Money Are Moving In Opposite Directions—Here’s Why - 12th Oct 17
Your Pension Is a Lie: There’s $210 Trillion of Liabilities Our Government Can’t Fulfill - 12th Oct 17
Two Highly Recommended Books from Bob Prechter - 12th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Gold Dips Back Below $1700 Following Signs of Progress on Fiscal Cliff

Commodities / Gold and Silver 2012 Dec 18, 2012 - 12:21 PM GMT

By: Ben_Traynor

Commodities

U.S. DOLLAR gold prices fell back below $1700 an ounce Tuesday morning, having briefly risen above that level following news of possible progress in the ongoing fiscal cliff negotiations in Washington.

"Investors [are] seemingly wary of taking positions in a time of thin liquidity and still waiting to see whether legislators will avert the automatic spending cuts and tax hikes in the US," says a note from Swiss precious metals group MKS.


Silver also eased lower after trading above $32.50 an ounce, while European stock markets were up slightly on the day by lunchtime.

On the commodities markets, oil prices edged higher while copper fell slightly. The Euro meantime held near seven-month highs against the Dollar above $1.31.

US president Barack Obama has said he is willing to extend tax cuts currently due to expire at the end of this month for those earning $400,000 or less a year, raising his previous threshold of $250,000. Obama is now looking to raise an additional $1.2 trillion in tax revenues over the next decade, press reports say, down from the $1.4 trillion he was previously seeking.

Over the weekend, Republican House of Representatives speaker John Boehner dropped his outright opposition to tax increases, saying he would consider allowing tax cuts to expire for those earning more than $1 million annually.

Obama has also said he will settle for a two-year increase in the US federal debt ceiling, rather than ask for the power to raise it to be transferred from Congress to the Oval Office, the Financial Times reports. The US is expected to hit its $16.4 trillion borrowing limit in February.

"[The White House is] talking about how close Obama's position is to what Boehner is willing to accept," points out Brad DeLong, professor of economics at Berkeley.

"They are not talking about how close Obama's position is to what [House majority leader Eric] Cantor and the right wing of the House Republican caucus are willing to accept...If Obama makes a deal with Boehner, the next stage is for Boehner to say that while the deal is fine with him, he cannot control his members, and that Obama needs to make additional concessions."

"It is all very tight and it is still possible that [the fiscal cliff issue] runs into next year," says Steve Barrow, head of G10 research at Standard Bank.

"But what does seem clear is that some sort of deal will be done and that's clearly helping to support markets, although the optimism is quite guarded."

"We expect subdued gold-trading action until the market is clear on the fiscal cliff negotiations," says VTB Capital analyst Andrey Kryuchenkov.

"We see US lawmakers striking an uneasy late deal over spending reductions and tax hikes."

UK inflation meantime held steady at 2.7% last month, according to consumer price index data published Tuesday.

"Although unchanged overall...there were significant upward and downward pressures on CPI annual inflation between October and November," the Office for National Statistics says, adding that prices for food, nonalcoholic beverages and domestic energy rose while the cost of items such as motor fuel and furniture fell.

The Bank of England's Quarterly Bulletin published this morning says that "early signs have been encouraging" that its Funding for Lending Scheme is boosting the amount of credit provided to the economy, although it adds that "given the usual lags from credit being offered to loans being made, the FLS is unlikely to materially affect lending volumes until 2013".

"Easier access to bank credit should boost consumption and investment by households and businesses," the bulletin says.

"In turn, increased economic activity should raise incomes."

The FLS was launched back in July with the aim of providing funds to banks and building societies for the specific purpose of being used to provide credit to households and non-financial businesses.

Over in China, the world's second-biggest gold buying nation in the third quarter, a growing number of China's bankers expect to see looser monetary policy, according to a quarterly survey published by China's central bank Tuesday.

Although 75% of respondents said they believe the current policy stance is the right one, 19.8% said they expect to see some form of easing in the first quarter of 2013. By contrast, only 5.9% of respondents to the Q3 2012 survey said they expected to see monetary easing in Q4.

India's central bank meantime left its main policy interest rate on hold at 8% today.

"The inflation picture is still not comforting enough for the central bank to let down its inflation guard," says HSBC chief India and Southeast Asia economist Leif Eskesen in Singapore.

Indian inflation as measured by its wholesale price index fell to 7.24% last month, down from 7.45% in October. India's central bank has said it wants to see inflation fall to 5%.

India is traditionally the world's biggest gold buying nation.

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

© 2005-2017 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