Best of the Week
Most Popular
1.UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - Nadeem_Walayat
2.Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - James_Quinn
3.UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - Nadeem_Walayat
4.Billionaire Investors Backing A Marijuana Boom In 2017 - OilPrice_Com
5.Emerging Markets & Basic Materials Stocks Breaking Out Together - Rambus_Chartology
6.Global Currency Reserve At Risk - Jim_Willie_CB
7.Gold and Silver: Your Stomach Is Probably Wrenching Right Now - The_Gold_Report
8.Warning: The Fed Is Preparing to Crash the Financial System Again - Graham_Summers
9.Basic Materials and Commodities Analysis and Trend Forecasts - Rambus_Chartology
10.Discover Why A Major American Revolution Is Brewing - Harry_Dent
Last 7 days
You Are Being Lied To About “Low” Gold Demand - 19th Aug 17
This is Why Cocoa's Crash Was a Perfect Setup - 19th Aug 17
Gold, Silver Consolidate On Last Weeks Gains, Palladium Surges 36% YTD To 16 Year High - 19th Aug 17
North Korea Is Far From Being Irrational… It Has A Plan - 18th Aug 17
US Civil War - FUNCTIONAL ILLITERATES TRYING TO ERASE HISTORY - 18th Aug 17
Bitcoin Hits New All-Time High Over $4,400 As It Catches Paypal In Total Market Cap - 17th Aug 17
3 Psychological Ingredients behind Great Web Content - 17th Aug 17
The War on Cash - Rogoff, Orwell and Kafka - 17th Aug 17
The Stock Market Guns of August, Trade Set-Up & Removing your Rose Tinted Glasses - 16th Aug 17
Stocks, Bonds, Interest Rates, and Serbia, Camp Kotok 2017 - 16th Aug 17
U.S. Stock Market: Sunrise ... Sunset - 16th Aug 17
The Next Tech Crash Could Delay Your Retirement by a Decade - 15th Aug 17
Gold and Silver Precious Metals Nearing Breakout - 15th Aug 17
North Korea Showdown: Pivotal Market Turning Point - 15th Aug 17
Tech Stocks DOT COM Bubble Do-Over? - 14th Aug 17
Deep State Conspiracy or Chaos - 14th Aug 17
From the Trans-Atlantic Axis and the Trans-Asian Axis - 14th Aug 17
Stock Market Intermediate Correction Underway - 14th Aug 17
The Islamic State Jihadi Pivot to Asia - 13th Aug 17
Potential Pivots Upcoming for Stocks and Gold - 13th Aug 17
North Korean Chinese Proxy vs US Military Empire Trending Towards Nuclear War! - 12th Aug 17
Gold Stocks Coiled Spring - 12th Aug 17
Neil Howe: The Amazon-Walmart Rivalry Will Determine the Future of Retail - 12th Aug 17
How to Alton Towers Half Price Discount Entry 2017 and 2018, Any Time, No Pre-Booking! - 12th Aug 17
Top 3 Technical Trading Tools Part 2: Relative Strength Index (RSI) - 11th Aug 17
What Makes Women Better Investors - 11th Aug 17
Crude Oil Price Precious Metals Link in August - 11th Aug 17
Influencer Marketing Predictions All Businesses Should Take Into Account - 11th Aug 17
Really Bad Ideas - Government Debt Isn’t Actually Debt - 10th Aug 17
Gold Sees Safe Haven Gains On Trump “Fire and Fury” Threat - 9th Aug 17
Why Is The Stock Market Not Trading On Fundamentals Lately? - 9th Aug 17
USD/CAD - Can We Trust This Breakout? - 9th Aug 17
New Monthly Rebate to Help Reduce Your Trading Costs - 9th Aug 17
Stock Market Divergences Are Now Appearing! - 9th Aug 17

Market Oracle FREE Newsletter

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

Gold and Silver Under Pressure Ahead of Year-End

Commodities / Gold and Silver 2012 Dec 27, 2012 - 11:21 AM GMT

By: Ben_Traynor

Commodities

U.S. DOLLAR gold prices traded above $1650 an ounce Thursday morning, in line with where they started the week, as the London market reopened following Christmas.

Silver meantime hovered either side of $30 an ounce, while stock markets edged higher and the Dollar fell, following news that the US Treasury is to take extraordinary measures to avoid hitting the federal debt ceiling next Monday.


"I am still friendly with the [precious metals] market, but it looks like until the new year starts, it's under pressure," says Yuichi Ikemizu at Standard Bank in Tokyo.

US president Barack Obama has flown back early from Hawaii to resume talks on the so-called fiscal cliff, the $600 million of spending cuts and tax cut expiries due to come into effect from Monday. The House of Representatives remains on vacation.

"The Senate must act first" said a statement issued Wednesday by House speaker John Boehner and senior Republican colleagues.

"The House will then consider whether to accept the bills...or to send them back to the Senate with additional amendments."

Boehner's so-called 'Plan B' for dealing with the federal deficit, which included maintaining tax cuts for anyone earning less than $1 million, failed to reach a House vote last week due to lack of support from members of Boehner's own party.

The US Treasury meantime is to take extraordinary measures to avoid hitting the statutory federal debt limit next Monday, a letter from Treasury secretary Timothy Geinther published yesterday says.

The measures include a halt to issuing debt for the purposes of assisting state and local governments, and suspending reinvestment of maturing securities into funds for government workers and the Exchange Stabilization Fund, an emergency fund set up for the purpose of exchange rate intervention.

"These extraordinary measures...can create approximately $200 billion in headroom under the debt limit," Geithner's letter says.

"Under normal circumstances, that amount of headroom would last approximately two months.

However, given the significant uncertainty that now exists for unresolved tax and spending policies for 2013, it is not possible to predict the effective duration of these measures."

The measures will "postpone the date that the United States would otherwise default on its legal obligations," the letter adds.

The US Treasury has taken similar measures on a number of occasions over the last two decades, including a series of measures starting in May 2011 that ended when the debt ceiling was last extended.

The 2011 debt ceiling negotiations lasted until August 2 of that year, the date the Treasury had said the US would hit the ceiling. Ratings agency Standard & Poor's stripped the US of its triple-A credit rating a few days later.

"Progress on the fiscal cliff will continue to affect market sentiment," Feng Liang, analyst at GF Futures, part of China's third-biggest listed brokerage, told news agency Bloomberg yesterday.

"Gold's one of the few investments with positive returns this year and it's normal to get some [year-end selling]."

The gold price at Thursday morning's London Fix was $1655.25 an ounce, 5.1% up on the final fixing of 2011.

Over in India, gold demand stayed strong Thursday, newswire Reuters reports.

"Retail demand is still weak, but jewelers are restocking for Pongal festival," says Daman Prakash Rathod, director at Chennai wholesaler MNC Bullion, referring to next month's harvest festival in the state of Tamil Nadu.

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